: Company No H. : 30 July 2013 / Malaysia. : Not Applicable. : Resident controlled company.

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1 Principal Terms and Conditions of the Sukuk TNB WE Background Information 1. Issuer a) Name : TNB Western Energy Berhad ( TNB Western Energy, TNB WE or the Issuer ), a 100% owned subsidiary of the Project Company. b) Address : Pejabat Setiausaha Syarikat Tingkat 2, Ibu Pejabat Tenaga Nasional Berhad No. 129, Jalan Bangsar Kuala Lumpur c) Business Registration Number d) Date and Place of incorporation e) Date of listing, where applicable f) Status on residence, i.e. whether it is a resident controlled company or non-resident controlled company : Company No H. : 30 July 2013 / Malaysia. : Not Applicable. : Resident controlled company. g) Principal Activities : The principal activities of the Issuer are to provide engineering services concerning electricity and promote cooperation with any institutions or utilities inside or outside Malaysia in connection with the generation, transmission, distribution, supply accumulation and employment of electricity and to serve as a contractor for power related projects. The Issuer was also set up to act as a funding vehicle by issuing sukuk in connection with the design, engineering, procurement, construction, installation, testing, commissioning of a 1x 1000MW ultra supercritical coal fired power plant in Manjung, Perak ( the Plant ) under the Fast Track Project 3A ( the Project ) to be undertaken by the Obligor pursuant to a power purchase agreement ( PPA ) entered into between the Obligor and the Offtaker (as defined in paragraph 3(a)(xxiii) herein). h) Board of Directors as at 30 September 2013 : The members of the board of directors of TNB WE are as follows: (a) Mustaffa bin Ja afar (NRIC No ) (b) Norazni Binti Mohd Isa (NRIC No ) (c) Sabri Bin Jaafar (NRIC No ) 1 P a g e

2 (d) Shamsul Bin Ahmad (NRIC No ) (e) Noraini binti Alip (NRIC No ) i) Structure of Shareholdings and names of shareholders or, in the case of public company, names of all substantial shareholders as at 30 September 2013 j) Authorised, issued and paid-up capital as at 30 September 2013 k) Disclosure of the following if the Issuer or its board of members have been convicted or charged with any offence under the securities laws, corporation laws or other laws involving fraud or dishonesty in a court of law, for the past five years prior to the date of application; and if the Issuer has been subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the date of application : Name of Shareholder TNB Manjung Five Sdn Bhd No. of ordinary shares of RM1.00 each held Shareholding (%) : Authorised Share Capital as at 30 September 2013 Ordinary shares of up to RM10.0 million comprising of 10 million of RM1.00 par value each. Redeemable preference share of up to RM15.0 million comprising of 15 million of RM1.00 par value and premium of RM99.00 each. Issued and Fully Paid-up Share Capital as at 30 September 2013 RM2.00 divided into 2 ordinary shares of RM1.00 each. None. Not applicable as the Issuer is not a listed company. 2 P a g e

3 2. Obligor a) Name : TNB Manjung Five Sdn Bhd, a 100% owned subsidiary of Tenaga Nasional Berhad (or Project Company ). b) Address : Pejabat Setiausaha Syarikat Tingkat 2, Ibu Pejabat Tenaga Nasional Berhad No. 129, Jalan Bangsar Kuala Lumpur c) Business Registration Number d) Date and Place of incorporation e) Date of listing, where applicable f) Status on residence, i.e. whether it is a resident controlled company or non-resident controlled company : Company No H. : 26 July 2013 / Malaysia. : Not Applicable. : Resident controlled company. g) Principal Activities : The principal activities of the Obligor are to (i) carry in Peninsular Malaysia and/or elsewhere the business of generation of electricity and services which includes, but not limited to generation of electricity, operation and maintenance services, inspection and testing services, sales, the sale and purchase of energy and capacity, (ii) purchase, construct, reconstruct, operate and maintain supply lines, generating stations, transformer stations and all other appropriate stations, and (iii) carry on the business of any matter relating to electricity and its production. h) Board of Directors as at 30 September 2013 : The members of the board of directors of the Project Company are as follows: (a) Datuk Seri Ir. Azman Bin Mohd (NRIC No ) (b) Norazni Binti Mohd Isa (NRIC No ) (c) Dato Ir. Mohd Nazri bin Shahruddin (NRIC No ) (d) Suhaimi Bin Ali Hanafiah (NRIC No ) (e) Fazlur-Rahman Bin Zainuddin (NRIC No ) 3 P a g e

4 i) Structure of Shareholdings and names of shareholders or, in the case of public company, names of all substantial shareholders as at 30 September 2013 : Name of Shareholder Tenaga Nasional Berhad No. of ordinary shares of RM1.00 each held Shareholding (%) j) Authorised, issued and paid-up capital as at 30 September 2013 k) Disclosure of the following if the Obligor or its board of members have been convicted or charged with any offence under the securities laws, corporation laws or other laws involving fraud or dishonesty in a court of law, for the past five years prior to the date of application; and if the Obligor has been subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the date of application : Authorised Share Capital as at 30 September 2013 Ordinary shares of up to RM10.0 million comprising of 10 million of RM1.00 par value each. Redeemable preference share of up to RM15.0 million comprising of 15 million of RM1.00 par value and premium of RM99.00 each. Issued and Fully Paid-up Share Capital as at 30 September 2013 RM2.00 divided into 2 ordinary shares of RM1.00 each. None. Not applicable as the Obligor is not a listed company. 4 P a g e

5 3. Principal Terms and Conditions a) Names of parties involved in the proposed transaction (where applicable) i. Joint Principal Advisers : BNP Paribas Malaysia Berhad ( BNP Paribas ) and CIMB Investment Bank Berhad ( CIMB ). ii. Joint Lead Arrangers : BNP Paribas and CIMB (jointly known as the JLAs ). iii. Co- Arranger : Not applicable. iv. Solicitor : Messrs Zaid Ibrahim & Co., acting for the Issuer. Messrs Adnan Sundra & Low, acting for the JLAs. v. Financial Adviser : BNP Paribas. vi. Technical Adviser : Pöyry Energy Sdn Bhd as the Independent Technical Adviser ( ITA ). vii. Sukuk Trustee : Malaysian Trustees Berhad. viii. Joint Shariah Advisers : BNP Paribas and CIMB Islamic Bank Berhad. ix. Guarantor : Tenaga Nasional Berhad (Company No W) ( Sponsor ). x. Valuer : Not applicable. xi. Facility Agent : CIMB. xii. xiii. Primary Subscriber (under a bought deal arrangement) and amount subscribed. Underwriter and amount underwritten : The primary subscribers under a bought deal arrangement for any issuance will be determined prior to that issuance, if any. : To be determined, if applicable. xiv. Central Depository xv. Paying Agent : BNM. xvi. xvii. Reporting Accountant Calculation Agent; and : Bank Negara Malaysia ( BNM ). : Deloitte & Touche ( Deloitte ). : Not applicable. 5 P a g e

6 xviii. Others xix. Security Agent : CIMB. xx. Joint Lead Managers / Bookrunners : BNP Paribas and CIMB. xxi. Account Bank(s) : CIMB Islamic Bank Berhad. xxii. Hedging Bank(s) : To be determined. xxiii. Offtaker : Tenaga Nasional Berhad ( TNB ). xxiv. Independent Advisers : 1. Pöyry Energy Sdn Bhd as the Independent Environmental Consultant ( IEC ). 2. Jardine Lloyd Thompson Sdn Bhd as the Independent Insurance Adviser(s) ( IIA ). b) Islamic Principle Used : Ijarah and Wakalah. c) Facility Description : The issuance of sukuk under the Islamic principles of Ijarah and Wakalah of up to Ringgit Malaysia 4.0 billion in aggregate nominal value ( Sukuk TNB WE ). Pursuant to the respective Site Lease Agreement (the SLA ) of the respective parcels of the Project Lands (as defined in paragraph 3(d) below) entered into by TNB Janamanjung Sdn Bhd as the land lessor ( Land Lessor ) with the Project Company, the Project Lands are leased to the Project Company for a duration of 28 years. Declaration of Trust The Issuer and the Sukuk Trustee shall enter into a trust deed ( Trust Deed ), pursuant to which the Issuer shall inter alia, declare a trust over the Asset (as defined in this paragraph 3(c) below) including the rights, title, interest and benefit, present and future, under the Grant of Right Agreement (as defined in this paragraph 3(c) below), the Ijarah Agreement (as defined in this paragraph 3(c) below) and the Servicing Agency Agreement (as defined in this paragraph 3(c) below) (collectively the Trust Asset ) in favour of the Sukuk Trustee (acting on behalf of the Sukukholders which term shall include any holders of the Sukuk TNB WE from time to time ( Sukukholders )) for the benefit of the Sukukholders. Pursuant to a declaration of trust ( Declaration of Trust ), the Issuer shall act as the trustee for the benefit of the Sukuk Trustee (acting on behalf of the Sukukholders) to exercise the rights, powers, authorities and discretions specifically given to the Issuer under or in connection with the Grant of Right Agreement, the Ijarah 6 P a g e

7 Agreement and the Servicing Agency Agreement together with any other incidental rights, powers, authorities and discretions, as the case may be. Grant of Right Agreement The Project Company (in its capacity as grantor ( Grantor )) shall enter into a grant of right agreement ( Grant of Right Agreement ) with the Issuer (in its capacity as Grantee ) acting on behalf of the Sukukholders, in accordance with the Trust Deed and the Grant of Right Agreement, to grant the right over the use of the Project Lands and to derive the benefits and usufruct rights over the use of the Project Lands for a period of 28 years or such period as corresponding to the lease term in the SLA with an option to be extendable for another 28 years (the Asset ) subject to the PPA term being extended as set out in the SLAs ( Grant of Right ). The Grantee will make a single upfront rental payment ( One-off Rental ) to the Grantor, which amount shall be equivalent to the aggregate proceeds to be raised from the issuance of the Sukuk TNB WE. Ijarah Agreement Upon obtaining the Asset, the Issuer (in its capacity as a lessor ( Lessor )) acting on behalf of the Sukukholders), shall enter into a lease agreement ( Ijarah Agreement ) with the Project Company (in its capacity as a lessee ( Lessee )) to lease the Asset to the Lessee, for a tenor corresponding to the maturity of the tranche with the longest tenor of the Sukuk TNB WE i.e more than 1 year and not exceeding 27 years ( Lease Period ) in consideration for pre-determined Ijarah rental payments (the Lease Rentals ). For the avoidance of doubt, the Lease Period shall not exceed the tenor of the Grant of Right Agreement. Issuance of Sukuk TNB WE The Issuer shall issue Sukuk TNB WE to the Sukukholders which represent the Sukukholders undivided proportionate beneficial interest, rights and entitlements under the Trust Asset. The proceeds from Sukuk TNB WE shall be utilised to pay the Grantor the One-off Rental under the Grant of Right Agreement. Total Lease Rentals, First Lease Rental and Periodic Distribution Amounts The Total Lease Rentals under the Ijarah Agreement shall be the aggregate of (i) the nominal value of each outstanding tranche of the Sukuk TNB WE and (ii) the aggregate Periodic Distribution Amount (as defined in 7 P a g e

8 paragraph 3(j) below) of the Sukuk TNB WE. The Periodic Distribution Amounts are the rental payments due and payable under the Sukuk TNB WE to the Sukukholders at the relevant Periodic Distribution Dates (as defined in paragraph 3(j) below). The first Lease Rental shall be the aggregate of (i) the nominal value of each outstanding tranche of the Sukuk TNB WE and (ii) the first Periodic Distribution Amounts of each outstanding tranche of the Sukuk TNB WE ( First Lease Rental ). However, only the first Periodic Distribution Amounts of each outstanding tranche of the Sukuk TNB WE would be due and payable on the first periodic distribution date while the nominal value of each outstanding tranche of the Sukuk TNB WE would be due on the first periodic distribution date but payable on the date of the declaration of Dissolution Event (the Dissolution Date ), the Early Redemption Date (as defined in paragraph 3(x)(ii) below), the Mandatory Redemption Date (as defined in this paragraph 3(c)) or the respective scheduled maturity date being, the date on which the relevant outstanding tranche of the Sukuk TNB WE in question is due to be redeemed (the Maturity Date ) (whichever is the earliest) of the relevant outstanding tranches of the Sukuk TNB WE. For the avoidance of doubt, (A) On the Dissolution Date, the Lease Rentals under the Ijarah Agreement shall be immediately due and payable by the Lessee to the Lessor which amount shall be the aggregate of (i) the nominal value of each outstanding tranche of the Sukuk TNB WE and (ii) all accrued but unpaid Periodic Distribution Amounts of each outstanding tranche of the Sukuk TNB WE accrued to the Dissolution Date ( Redemption Amount ). (B) On the relevant Maturity Date of the Sukuk TNB WE, the Lease Rentals due and payable by the Lessee to the Lessor for each tranche of the Sukuk TNB WE shall be the aggregate of (i) the last Periodic Distribution Amount and (ii) the nominal value of the relevant maturing Sukuk TNB WE ( Settlement Amount ). (C) On the relevant Early Redemption Date (where applicable), the Lease Rentals due and payable by the Lessee to the Lessor shall be the Early Redemption Amount (as defined in paragraph 3(y)(xiii) below). (D) On the date of occurrence of a Total Loss Event, the Lease Rentals due and payable by the Lessee to the Lessor shall be the Mandatory Redemption Amount (as defined in paragraph 3(y)(xii) below). 8 P a g e

9 On the Dissolution Date or the date of occurrence of a Total Loss Event ( Mandatory Redemption Date ), the Ijarah Agreement and the Grant of Rights Agreement will be terminated and the entire Asset (being the proportionate undivided rights over the use of the Project Lands for the remaining period of the Grant of Right from the Sukukholders of all tranches of the Sukuk TNB WE) will automatically be reverted to the Grantor for the payment of the Redemption Amount or the Mandatory Redemption Amount, as the case may be. On the relevant Maturity Date or Early Redemption Date of the Sukuk TNB WE, the Ijarah Agreement and the Grant of Rights Agreement will not be terminated but the relevant Asset (being the proportionate undivided rights over the use of the Project Lands for the remaining period of the Grant of Right from the Sukukholders of the relevant tranche of the Sukuk TNB WE) will automatically be reverted to the Grantor for the payment of the Settlement Amount or the Early Redemption Amount (as the case may be) respectively. For the avoidance of doubt, any double counting in respect of the Redemption Amount, Mandatory Redemption Amount, Settlement Amount or Early Redemption Amount shall be disregarded. Upon receipt by the Lessor from the Lessee of the Lease Rentals on the relevant rental payment dates which would coincide with the relevant periodic distribution dates, the Dissolution Date, Maturity Date, Early Redemption Date and Mandatory Redemption Date of the relevant Sukuk TNB WE as the case may be, the Issuer will use such amounts received to make payments under the relevant Sukuk TNB WE to the Sukukholders. Servicing Agency Agreement Under the Ijarah Agreement, the Lessor shall be responsible to procure Takaful/insurance in connection with the Asset and the Lessee has acknowledged that the Lessor may procure the services of a servicing agent ( Servicing Agent ) or its representatives, in accordance with the terms and conditions set out in a servicing agency agreement (the Servicing Agency Agreement ), including but not limited to perform the payment of Takaful/ insurance under a Total Loss Event. To the extent that the Servicing Agent incurs any costs/ expenses in relation to procuring the Takaful/ insurance ( Service Charge Amount ), the Lease Rentals under 9 P a g e

10 the Ijarah Agreement will provide for supplementary rental (forming part of the Lease Rentals) which will be an amount equal to Service Charge Amount incurred ( Supplementary Lease Rentals ). The obligation of the Issuer to pay the Service Charge Amount shall be set off against the Supplementary Lease Rentals due from the Lessee. Upon the occurrence of a Total Loss Event, the Ijarah Agreement will be terminated. The Sukuk TNB WE will be redeemed in accordance with the provisions on Mandatory Redemption. For the avoidance of doubt, in the event of a partial loss which is repairable, the Ijarah Agreement will not be terminated, the provisions on Mandatory Redemption will not be applicable and the proceeds from the Takaful/insurance proceeds would be used to make good such damage. The Asset will not be substituted upon the occurrence of a Total Loss Event or a partial loss. Pursuant to the Servicing Agency Agreement, the Issuer (in its capacity as the Lessor), acting on behalf of the Sukukholders shall appoint the Lessee as the Servicing Agent for a servicing agent fee of RM throughout the Lease Period to carry out certain obligations. The Servicing Agent shall be responsible to procure Takaful/ insurance in connection with the Asset that provides sufficient proceeds for the redemption of the Sukuk TNB WE under a Total Loss Event. If the Takaful/ insurance proceeds are insufficient to cover the redemption amount due under the Sukuk TNB WE, the Servicing Agent shall be liable to make good the difference. Any excess from Takaful/insurance proceeds over the Mandatory Redemption Amount, shall be paid to the Servicing Agent as an incentive fee. Wakalah Agreement Pursuant to a Wakalah Agreement, the Project Company shall appoint the Issuer as its agent ( Wakeel ) to provide certain services for a wakalah fee of RM100.00, for a period corresponding to the period of the construction and delivery of the Plant to the Project Company under the Turnkey Contract (as defined in this paragraph 3(c) below). The Wakeel shall be responsible to: (i) manage the One-off Rental paid to the Project Company as Grantor in a Shariah compliant manner; (ii) subject to the instructions of the Project Company, to make payments including; 10 P a g e

11 (a) payment on behalf of the Project Company (as Lessee) of the Lease Rentals to the Lessor; (b) any other payments or cost in relation to the Project corresponding to Item 3(m) below. The Wakalah Agreement shall cease upon the completed Plant being delivered to the Project Company under the Turnkey Contract. Thereafter, the Project Company as Lessee will pay the Lease Rentals directly to the Lessor, who in turn will channel to Sukukholders. Turnkey Contract means the contract between the Project Company and the Issuer, whereby the Issuer will procure the execution of the Project on a turnkey basis and administer and manage the development of the Project on behalf of the Project Company. A diagrammatical illustration for Sukuk TNB WE is set out in Appendix 1. d) Identified assets : The Project Lands, which are part of pieces of lands held under titles H.S.(D) Lot 43195, H.S.(D) Lot and H.S.(D) Lot 43197, all in Mukim Sitiawan, District Manjung, Perak measuring approximately 92, square meters, 13,800 square meters and 264,695 square meters respectively, where the Plant will be situated. e) Purchase and Selling Price/Rental (where applicable) f) Issue/Sukuk Programme Size g) Tenor of the Issue/Sukuk Programme h) Availability Period of Sukuk Programme i) Profit/Coupon/Rental Rate (%) j) Profit/Coupon/rental Payment Frequency : Rental To be determined prior to the issuance of Sukuk TNB WE. : Sukuk of up to RM4.0 billion in nominal value, one-time issuance based on the Shariah principles of Ijarah and Wakalah. : The tenor of each tranche of the Sukuk TNB WE shall be more than one (1) year and up to twenty seven (27) years from the issue date. For the avoidance of doubt, there will only be a one-time issuance of the Sukuk TNB WE, accordingly, all the tranches of Sukuk TNB WE will have the same issue date. : Not applicable. : To be determined prior to the issuance of Sukuk TNB WE ( Periodic Distribution Rate ). : The frequency of payment of the periodic distribution amounts ( Periodic Distribution Amounts ) for the Sukuk TNB WE shall be on a semi-annual basis or such other period to be determined by the Issuer prior to the issuance of the Sukuk TNB WE. The periodic distribution dates ( Periodic Distribution Dates ) shall be the date for payment of each of the Periodic Distribution Amount, each being a date falling at the end of each consecutive 11 P a g e

12 six (6) month periods commencing from the Issuance Date or such other period to be determined by the Issuer prior to the issuance of the Sukuk TNB WE. k) Profit/Coupon/rental Payment Basis l) Security/Collateral, where applicable : Actual/365 days. : The obligations of each of the Issuer and/or the Obligor under all Transaction Documents to which it is a party shall be secured by the following security: a. A first ranking assignment of all of the Issuer and the Project Company s rights, interests, titles and benefits under the Project Documents (as defined in paragraph 3(y)(xv) below) and the proceeds therefrom, but excluding the generation license, the Offset Agreement and the Offset Management Services Agreement; b. A first ranking charge and assignment of all Designated Accounts (as defined in paragraph 3(n) below), other than the Distribution Account (as defined in paragraph 3(n) below), and the credit balances therein; c. A debenture incorporating a first ranking fixed and floating charge on the assets of the Issuer and Project Company in relation solely to the Project, both present and future, excluding, for avoidance of doubt, the Distribution Account and all credit balances therein and any rights, interests, titles and benefits under the Offset Agreement and the Offset Management Services Agreement; d. A first ranking assignment of all relevant material Takaful contracts/insurance policies in respect of the Project; e. A first ranking assignment of the Issuer s and the Project Company s rights, interests, titles and benefits in all performance and/or maintenance bonds in relation to the Project, save for any rights, interests, titles and benefits under the Offset Agreement and the Offset Management Services Agreement; f. Security to be granted pursuant to sub-paragraphs 3(t) - Conditions Subsequent item (b) below; and g. Such other security as may be required by the rating agency to achieve the requisite rating for the Sukuk TNB WE and agreed to by the Issuer. 12 P a g e

13 Sponsor s Completion Support Sponsor s Rolling Guarantee For the avoidance of doubt, an equity bridge financing ( Equity Bridge Financing ) (if applicable) shall only have recourse to the Sponsor. : The Sponsor shall provide an unconditional and irrevocable guarantee for the period ( Guarantee Period ) commencing from (and including) the issue date of the Sukuk TNB WE and expiring on the date falling 12 months from the Scheduled COD (as defined in paragraph 3(y)(ix) below) or the date of declaration of a Dissolution Event (whichever is earlier) to: a. inject the Sponsor s Equity Contribution into the Project in accordance with the base case cashflow projections as set out in the Information Memorandum (as defined in paragraph 3(u)(h) below) ( Base Case Cashflow Projections ); b. fund any cost overruns incurred relating to the Project for up to a cap of 10% of the Project cost as reflected in the Base Case Cashflow Projections; and c. fund any Finance Service (as defined in paragraph 3(w)(iii) below) for up to 12 months post the Scheduled COD. The Sponsor shall have the right, but not the obligation, to increase the guaranteed amount and/or extend the period of the guarantee at its sole discretion. For the avoidance of doubt, the Sponsor s Completion Support shall not include any accelerated payments upon a declaration of a Dissolution Event or a Total Loss Event. The Sponsor s Completion Support shall cease and have no further effect on the earlier of the expiry of the Guarantee Period and the date on which the following having been fulfilled to the reasonable satisfaction of the Security Agent: a. certification has been received from the Technical Advisor the date specified in the Taking Over Certificate issued by the Issuer s engineer under the EPC Agreement as the date on which the Works (as defined in the EPC Agreement) are completed in accordance with the EPC Agreement; b. all construction costs in relation to the Project payable under the EPC Agreement have been paid (including any cost overruns); and. c. Conditions Subsequent (a), (c), (d) and (e) have been satisfied. : Upon cessation of the Sponsor s Completion Support and until the final Maturity Date of the Sukuk TNB WE or the date upon the declaration of a Dissolution Event 13 P a g e

14 (whichever is earlier), the Sponsor shall provide a rolling, unconditional and irrevocable guarantee in an amount equivalent to the next 6-month Finance Service. The Sponsor s Rolling Guarantee shall automatically be renewed at every Periodic Distribution Date or when drawn. For the avoidance of doubt, the Sponsor s Rolling Guarantee shall not include any accelerated payments upon a declaration of a Dissolution Event or a Total Loss Event. 28 calendar days prior to each Periodic Distribution Date, in the event that the cash balance in the Issuer s Finance Service Account (as defined in paragraph 3(n) herein) is less than the upcoming scheduled Finance Service ( Upcoming Finance Service ), the Sponsor s Rolling Guarantee will be drawn to fund the Issuer s Finance Service Account, up to an amount equivalent to the Upcoming Finance Service. m) Details on Utilisation of Proceeds : The Issuer and Project Company shall undertake to use the proceeds of the Sukuk TNB WE (or convert a portion of the same into foreign currencies to pay certain items below which may be denominated in foreign currencies) only for the following Shariah-compliant purposes in connection with the Project: a. pay and/or reimburse to the Project Company and/or TNB all costs associated with the Project including but not limited to site acquisition, development, design, construction, compensation payments, startup, initial operations of the Project pursuant to the Project Documents; b. pay and/or reimburse to the Project Company and/or TNB all Lease Rentals, fees, expenses, commissions and all other amounts payable in connection with the relevant Sukuk TNB WE (including fees and costs incurred for the establishment of the Sukuk TNB WE facility and issuances thereunder, if any) and the Equity Bridge Financing prior to the Scheduled COD of the Project; c. pay and/or reimburse to the Project Company and/or TNB any other Project related costs, including but not limited to consultant fees, Takaful/insurance contribution and contingencies; and d. repay intercompany advances/financing granted to the Issuer from the Project Company and/or TNB for payments of any costs associated with the Project. For the avoidance of doubt, the use of the proceeds by the Issuer and the Project Company as set out above shall not be subject to the Revenue Account Priority of 14 P a g e

15 n) Sinking Fund and Designated Accounts, where applicable Cashflow as provided below and in particular, any reimbursement of costs and expenses advanced to the Issuer or Project Company prior to issuance of the Sukuk TNB WE will not be subject to the Restricted Payments set out in Negative Covenants. : Sinking Fund Account None. Designated Accounts The Issuer and Project Company shall open and maintain the following Shariah Compliant Designated Accounts with the Account Bank and/or any financial institution(s) which is acceptable to the Sukuk Trustee. Issuer s Designated Accounts a. Sukuk Escrow Account b. Disbursement Account c. Finance Service Account Project Company s Designated Accounts a. Revenue Account b. Operating Account(s) c. Maintenance Reserve Account d. Distribution Account The Issuer and Project Company shall not have any bank accounts in relation to the Project other than the Designated Accounts as mentioned above or in relation to any Permitted Investments, so long as any of the Sukuk TNB WE is outstanding, unless otherwise agreed by the Sukuk Trustee (acting reasonably). Upon enforcement of security, the Security Agent shall be the sole signatory of all Designated Accounts. Issuer s Designated Accounts Sukuk Escrow Account ( Escrow Account ) The Issuer shall open a Shariah compliant MYR Escrow Account for the purpose of depositing and/or remitting the issuance proceeds of the Sukuk TNB WE. The Issuer shall use the credit balances in the Escrow Account for the payments into the Issuer s Disbursement Account ( Disbursement Account ), subject to the Conditions Precedent to each Utilisation having been satisfied. Any credit balance remaining in the Escrow Account after the COD of the Project shall be deposited into the 15 P a g e

16 Project Company s Revenue Account and the Escrow Account will thereafter be closed. The Escrow Account shall be jointly operated by the Security Agent and the Issuer. There may be additional Escrow Accounts in foreign currency in addition to MYR. Disbursement Account ( Disbursement Account ) The Issuer shall open a Shariah compliant MYR Disbursement Account for the purpose of depositing MYR proceeds from the Sponsor s Equity Contribution, intercompany advances, transfer from the Escrow Account, any proceeds in relation to paragraph (b) of the Sponsor s Completion Support and relevant Takaful/insurance proceeds received. The Issuer shall use the credit balances in the Disbursement Account for the purposes of making relevant MYR payments set out under the heading Details on Utilisation of Proceeds above. Any credit balance remaining in the Disbursement Account after the COD of the Project shall be deposited into the Project Company s Revenue Account and the Disbursement Account will thereafter be closed. The Disbursement Account shall be jointly operated by the Security Agent and the Issuer. There may be additional Disbursement Accounts in foreign currency in addition to MYR. Finance Service Account ( FSA ) The Issuer shall open a Shariah compliant MYR FSA for the purpose of depositing scheduled Periodic Distribution Amount and scheduled nominal value (if applicable) payable under the Sukuk TNB WE from the Project Company s Revenue Account, the proceeds in relation to paragraph (c) of the Sponsor s Completion Support or the Sponsor s Rolling Guarantee, 28 calendar days prior to each Periodic Distribution Date. The credit balances in the FSA will be used to meet the scheduled Periodic Distribution Amount and scheduled nominal value (if applicable) on the Periodic Distribution Date. 16 P a g e

17 The FSA shall be operated solely by the Security Agent. Project Company s Designated Accounts Revenue Account ( Revenue Account ) The Project Company shall open a Shariah compliant MYR Revenue Account for the purpose of depositing the following: a. all revenues, income and receivables received from the Project and all Project Documents (including the PPA); b. proceeds of Takaful/insurance claims in respect of Takaful/ insurance taken and/or maintained in connection with the Project; c. any claims received in respect of third party performance bonds/guarantees or any other compensation received by the Project Company in connection with the Project; d. any remaining credit balances in the Issuer s Escrow and/or Disbursement Account after the COD; and e. any intercompany advances and/or shareholder s distribution from Issuer. The credit balances in the Revenue Account shall be applied in accordance with the "Revenue Account Priority of Cashflow" clause below. The Revenue Account shall be jointly operated by the Security Agent and the Project Company. Operating Account ( Operating Account ) The Project Company shall open a Shariah compliant MYR Operating Account for the purpose of depositing the amount transferred from the Revenue Account, for the payment of MYR operating and maintenance, taxes, duties, capital expenditures (recurring or otherwise) and any other Project Company s payment obligations under the Project Documents or in relation to the Project. The Operating Account shall be operated by the Project Company solely. Maintenance Reserve Account ( Maintenance Reserve Account ) The Project Company shall open a Shariah compliant MYR Maintenance Reserve Account for the purpose of fulfilling its obligations under the PPA. The Maintenance Reserve Account shall be either pre-funded on COD, or 17 P a g e

18 built up to a sum of RM24 million over a three (3) year period, commencing on COD at the rate of RM 8 million per annum. The Project Company is allowed to draw from the Maintenance Reserve Account to pay for maintenance expenses of the Project, including any repair or replacement, however the balance must be reinstated to the minimum balance over the 3 months following the withdrawal (or such other date as may be agreed between TNB and the Project Company) in accordance with the Revenue Account Priority of Cashflow. The Maintenance Reserve Account shall be operated by the Project Company solely. Distribution Account ( Distribution Account ) The Project Company shall open a Shariah compliant MYR Distribution Account for the purpose depositing amount transferred from the Revenue Account. For avoidance of doubt, distributions from the Distribution Account are at the sole discretion of the Project Company and shall not be subject to the Restricted Payments set out in Negative Covenants. The Distribution Account shall be operated by the Project Company solely. o) Rating (i) Credit rating(s) assigned (Please specify if this is an indicative rating) (ii) Name of rating agency : The Sukuk TNB WE has been accorded an indicative rating of AAA IS by the Rating Agency. : Malaysian Rating Corporation Berhad (Co. No V). p) Mode of Issue : The Sukuk TNB WE shall be issued in accordance with (1) the Participation and Operation Rules for Payment and Securities Services ( MyClear Rules ) issued by Malaysian Electronic Clearing Corporation Sdn Bhd ( MyClear ), and (2) Operational Procedures for Securities Services issued by MyClear ( MyClear Procedures ) or as amended or substituted from time to time (collectively the MyClear Rules and Procedures ) applicable from time to time. The Sukuk TNB WE may be issued via bought deal or via book-building on a best effort basis or via direct placement on a best effort basis. 18 P a g e

19 q) Selling Restriction, including tradability, i.e. whether tradable or non-tradable : Selling Restrictions at Issuance The Sukuk TNB WE may only be offered, sold, transferred or otherwise disposed directly or indirectly to a person to whom an offer or invitation to subscribe the Sukuk TNB WE may be made and to whom the Sukuk TNB WE are issued would fall within Schedule 6 or Section 229(1)(b) of the Capital Markets and Services Act 2007 as amended from time to time ( CMSA ) and Schedule 7 or Section 230(1)(b) of the CMSA, read together with Schedule 9 or Section 257(3) of the CMSA. Selling Restrictions Thereafter The Sukuk TNB WE may only be offered, sold, transferred or otherwise disposed directly or indirectly to a person to whom an offer or invitation to purchase the Sukuk TNB WE would fall within Schedule 6 or Section 229(1)(b) of the CMSA, read together with Schedule 9 or Section 257(3) of the CMSA. r) Listing Status and types of listing, where applicable; s) Other Regulatory Approvals Required in relation to the issue, offer or invitation to subscribe or purchase sukuk, and whether or not obtained t) Conditions Precedent for Issuance : The Sukuk TNB WE will not be listed on Bursa Malaysia Securities Berhad or any other stock exchanges. : None. : To include but not limited to the following:- A. Main Documentation a. The Transaction Documents (other than those which are required to be executed or perfected under Conditions Subsequent) have been signed and where applicable stamped or endorsed as being exempted from stamp duty and presented for registration with the relevant registries (where applicable); b. All relevant notices, acknowledgements and consent in relation to the Transaction Documents and from the relevant counterparties to the Project Documents (where applicable), other than those which are required to be executed or perfected under Conditions Subsequent shall have been made or received as the case may be; and 19 P a g e

20 c. Receipt from the Issuer and Project Company, as the case may be, certified true copies of all the executed and where applicable, stamped Project Documents (save for the JTUA which shall be provided by the Issuer and the Project Company in accordance with Condition Subsequent (d) below) and any other supplemental documentation in relation thereto. B. The Issuer, Project Company and Guarantor (collectively Relevant Parties and Relevant Party means anyone of them). a. Certified true copies of the Certificate of Incorporation and the latest Memorandum and Articles of Association of the Relevant Parties; b. Certified true copies of the latest Forms 24 and 49 of the Relevant Parties; c. A certified true copy of a board resolution of the Relevant Parties authorising, among others, the execution of the relevant Transaction Documents; d. A list of the Relevant Party s authorised signatories and their respective specimen signatures; e. A report of the relevant company search of the Relevant Parties; and f. A report of the relevant winding up search or the relevant statutory declaration of the Relevant Parties. C. General a. The authorisation/approval from the Securities Commission ( SC ) for the proposed issuance of the Sukuk TNB WE; b. The Sukuk TNB WE shall have received a rating of AAA IS from the Rating Agency; c. Evidence that all the Designated Accounts have been opened and in accordance with the provisions of this principal terms and conditions ( PTC ); 20 P a g e

21 d. Evidence that the Forms 34 (as prescribed under the Companies Act), where applicable, in respect of the charges created pursuant to the relevant Transaction Documents as part of the conditions precedent above (for the purpose of registration of such charges with the Companies Commission of Malaysia in accordance with Section 108 of the Companies Act 1965) have been duly lodged with the Companies Commission of Malaysia and that immediately prior to the lodgement of such Forms 34, a search conducted on such company in respect of which the Form 34 is filed, revealed that there are no other charges that have been registered by it with the Companies Commission of Malaysia; e. The JLAs have received a satisfactory legal opinion from the Project Company s solicitors addressed to them advising with respect to, among others, the legality, validity and enforceability of the Project Documents (excluding the generation license) against the Issuer/Project Company and the relevant counterparties (relevant counterparties comprising wholly owned entities of the TNB Group) and confirming to the JLAs that all the conditions precedents in relation to the Project Documents (if applicable) have been fulfilled; f. The JLAs have received a satisfactory legal opinion from their legal counsel addressed to them and the Sukuk Trustee advising with respect to, among others, the legality, validity and enforceability of the Transaction Documents and a confirmation from the legal counsel addressed to the JLAs confirming that all the conditions precedent in relation to the Transaction Documents have been fulfilled or otherwise waived by the JLAs; g. A written report from the ITA in form and substance satisfactory to the Joint Lead Arrangers; h. A written report from the IIA in form and substance satisfactory to the Joint Lead Arrangers; i. A written report from the IEC in form and substance satisfactory to the Joint Lead Arrangers; 21 P a g e

22 j. Receipt of a certified true copy of the environmental impact assessment report ("EIA") approved by the Department of Environment ("DOE") in respect of the Project; k. Evidence of the confirmation from the Joint Shariah Advisers that the structure and mechanism together with the Transaction Documents of the Sukuk TNB WE are in compliance with Shariah principles; l. Delivery of a financial model, reviewed by the Reporting Accountant, showing a minimum projected base case FSCR of at least 1.25x and a Finance to Equity Ratio not exceeding 80:20, satisfactory to the JLAs; m. All transaction fees, costs and expenses have been fully paid or documentary evidence that it will be paid from the issue proceeds; and Conditions Precedent to Each Disbursement n. Such other conditions precedent as may be advised by the legal counsel of the Joint Lead Arrangers and to be mutually agreed between the Joint Lead Arrangers and the Issuer. : Conditions precedent to each disbursement from the Sukuk Escrow Account to include but not limited to the following: a. All representations and warranties are true and correct in all material respects by reference to the facts and circumstances subsisting at such time; b. No Events of Default/ Dissolution Events have occurred and are continuing; c. Such drawdown would not cause the FE Ratio to exceed the FE Ratio as defined below in paragraph 3(w)(iii); d. Receipt of a drawdown certificate, including certification by the ITA, if applicable, in accordance with the Transaction Documents; and e. Such other conditions precedent as may be advised by the legal counsel of the JLAs and to be mutually agreed between the JLAs and the Issuer. 22 P a g e

23 Conditions Subsequent : To include the following: a. Receipt of a confirmation from the IIA that the agreed operational phase Takaful/insurance cover has been duly executed prior to the Scheduled COD; b. No later than 9 months after issuance of the Sukuk TNB WE, presentation for registration of a charge over the lease of the Project Lands in favour of Security Agent and the Project Company shall have provided the Security Agent with: (i) the receipt of such presentation from the relevant land authority; (ii) evidence that the Form 34 (as prescribed under the Companies Act) in respect of such charge has been lodged with the CCM; and (iii) a legal opinion satisfactory to the JLAs (from Adnan Sundra & Low), and addressed to the Security Agent, JLAs and Sukuk Trustee advising with respect to, among others, the legality, validity and enforceability of such charge; c. Receipt of a certified true copy of the environmental management plan ( EMP ) in respect of the Project within 3 months from the issue date of the Sukuk TNB WE; d. Delivery of executed and stamped JTUA within 6 months from the issue date of the Sukuk TNB WE and the JLAs and the Security Agent have received a satisfactory legal opinion from the Project Company s solicitors addressed to them advising with respect to, among others, the legality, validity and enforceability of the JTUA against the Project Company and confirming to the JLAs that all the conditions precedents in relation to the JTUA (if applicable) have been fulfilled; e. Receipt of a certified true copy of the generation licence from the Energy Commission prior to the Initial Operation Date (as defined in the PPA); f. Receipt of a certified true copy of each of the Takaful contracts/insurance policies which are assigned under the Transaction Documents within 3 months from the issue date of the Sukuk TNB WE; g. No later than 6 months after issuance of the Notice to Proceed (as defined in the EPC Agreement), the Issuer has obtained the Construction Industry Development Board licence ( CIDB Licence ) and have provided a certified true copy of the same to the Security Agent/the Trustee; and 23 P a g e

24 h. Such other conditions subsequent as relevant and advised by the legal counsel of the JLAs and to be mutually agreed between the JLAs and the Issuer. u) Representations and Warranties After the generation licence under (e) has been obtained, it will form part of the definition of Project Documents (pursuant to clause (j) of that definition). : Each of the Issuer and Project Company hereby represents and warrants as follows: a. it is a company with limited liability duly incorporated and validly existing under the laws of Malaysia, has full power to carry on its business and to own its property and assets; b. subject to the perfection requirements referred to in the legal opinion delivered under paragraph 3(t)(C)(Conditions Precedent) and paragraph 3(t)(Conditions Subsequent) and upon taking of all necessary actions and obtaining the consents and approvals referred to 3(t)(C) (Conditions Precedent) and paragraph 3(t)(Conditions Subsequent), its memorandum and articles of association incorporate provisions which authorise, and all necessary corporate and other relevant actions have been taken to authorise, and all relevant consents and approvals of any administrative, governmental or other authority or body in Malaysia have been duly obtained and are in full force and effect which are required to authorise it to execute and deliver and perform the transactions contemplated in the Transaction Documents in accordance with their terms; c. subject to any general principles of law limiting its obligations referred to in the legal opinion delivered under paragraph 3(t)(C) (Conditions Precedent) and paragraph 3(t)(Conditions Subsequent) and upon taking all necessary actions and obtaining the consents and approvals referred to under paragraph 3(t)(C) (Conditions Precedent) and paragraph 3(t)(Conditions Subsequent), the Sukuk TNB WE and each of the other Transaction Documents, is or will be when executed and/or issued, as the case may be, in full force and effect and constitutes, or will when executed or issued, as the case may be, constitute, its valid and legally binding obligations enforceable in accordance with the terms of the Sukuk TNB WE and each of such Transaction Document; 24 P a g e

25 d. subject to the perfection requirements referred to in the legal opinion delivered under paragraph 3(t)(C)(Conditions Precedent) and paragraph 3(t) (Conditions Subsequent) and upon taking all necessary actions and obtaining the consents and approvals referred to under paragraph 3(t)(C) (Conditions Precedent) and paragraph 3(t) (Conditions Subsequent), neither the execution and delivery of any of the Transaction Documents by the Issuer and/or the Project Company, nor the performance of any of the transactions contemplated by the Transaction Documents by the Issuer and/or the Project Company, did or does as at the date the representation and warranty is made or repeated (i) contravene or constitute a default under any provision contained in any financing agreement, instrument, law, ordinance, decree, judgment, order, rule, regulation, licence, permit or consent by which it or any of its assets are bound or which is applicable to it or any of its assets, (ii) cause the powers of its directors, whether imposed by or contained in its memorandum and articles of association or in any agreement, instrument, law, ordinance, decree, order, rule, regulation, judgment or otherwise, to be exceeded, or (iii) cause the creation or imposition of any security interest or restriction of any nature on any of its assets (other than the securities as contemplated under this PTC); which will have a Material Adverse Effect or a material adverse effect on the validity or enforceability of the Transaction Documents or the right or remedies of a party (other than the Issuer and the Project Company) under the Transaction Documents; e. save for the perfection requirements referred to in the legal opinion delivered under paragraph 3(t)(C) (Conditions Precedent) for Issuance and paragraph 3(t)(Conditions Subsequent) and upon taking all necessary actions and obtaining the consents and approvals referred to under paragraph 3(t)(C) (Conditions Precedent) and paragraph 3(t) (Conditions Subsequent), no authorisation, approval, consent, licence, exemption, registration, recording, filing or notarisation and no payment of any duty or tax and no other action whatsoever is necessary to ensure the legality, validity, enforceability of its liabilities and obligations or the rights of the Sukukholders under the Transaction Documents or the Sukuk TNB WE; 25 P a g e

26 f. all consents, licences, approvals or authorisations of governmental authorities in Malaysia which are required for it to own its assets and carry on its business as it is being conducted have been duly obtained and complied with and are in full force and effect where failure to do so would have a Material Adverse Effect; g. except as disclosed to the Sukuk Trustee in writing, no litigation, arbitration or administrative proceeding or claim is current, presently in progress or pending against it or any of its assets which would have a Material Adverse Effect; h. the information memorandum issued in connection with the Sukuk TNB WE ( Information Memorandum which term shall include the Information Memorandum as amended or supplemented from time to time) does not contain any statements or information which are false or misleading, in any material respects or from which there is a material omission which makes the statements therein, in the light of the circumstances under which they were made, misleading in any material respect as at the date of the Information Memorandum or such other date specified therein and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful inquiry by the Issuer and the Project Company based on facts existing as at the date of the Information Memorandum or such other dates specified therein; i. there has been no material adverse change in the financial condition of the Issuer and the Project Company since the date of its incorporation (where no audited financial statements have been prepared) or since its last audited financial statements, which would have a Material Adverse Effect; j. no Dissolution Event has occurred and continuing; k. unless otherwise disclosed, its latest audited financial statements (including the cashflow statements, income statements and balance sheet) have been prepared in accordance with approved accounting standards in Malaysia and give a true and fair view of its financial position for that year and the state of its affairs at that date, as the case may be; 26 P a g e