: W. : 21 July 2011/Malaysia. : Resident-controlled company.

Transcription

1 PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL 1. Background information on the Issuer (i) Name : Axis REIT Sukuk Berhad ( Issuer ). (ii) Address : Suite 11.1A, Level 11 Menara Weld 76, Jalan Raja Chulan Kuala Lumpur. (iii) (iv) Business Registration No. Date and Place of Incorporation : W. : 21 July 2011/Malaysia. (v) Date of Listing : Not applicable. (vi) Status Resident/Nonresident Controlled Company : Resident-controlled company. (vii) Principal Activities : The Issuer s principal activity is to undertake Islamic financing including to issue the Sukuk (as defined hereunder) for which the proceeds from such financing shall be utilised only by OSK Trustees Berhad ( REIT Trustee ) for Axis Real Estate Investment Trust ( Axis-REIT ) s purposes and such transactions as may be necessary, incidental or conducive pursuant to the said Islamic financing and in accordance with the deed dated 3 April 2009 and the supplemental deed dated 15 December 2011 constituting Axis-REIT entered into between the REIT Trustee and the REIT Manager (as defined hereunder) and the Guidelines for Islamic Real Estate Investment Trusts issued by the Securities Commission Malaysia ( SC ) dated 21 November 2005 and the Guidelines for Real Estate Investment Trusts issued by the SC dated 21 August (viii) Board of Directors as at 30 April 2012 : The directors of the Issuer as at 30 April 2012 were as follows: Name George Stewart LaBrooy Tew Peng Teoh Peng Hwee Resident Status Malaysian Malaysian

2 K. Sothinathan a/l Kanagasingam Malaysian (ix) (x) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders as at 30 April 2012 Authorised and Paidup Capital as at 30 April 2012 : The shareholder of the Issuer as at 30 April 2012 was as follows: Shareholder Shareholding (%) REIT Trustee 100.0% : Authorised Capital as at 30 April 2012 RM100, divided into 100,000 ordinary shares of RM1.00 each. Issued and Paid-up Capital as at 30 April 2012 RM2.00 divided into 2 ordinary shares of RM1.00 each.

3 2. Principal terms and conditions (a) Names of parties involved in the proposed transaction (where applicable) (i) Principal Adviser : CIMB Investment Bank Berhad ( CIMB ). (ii) Lead Arranger : CIMB. (iii) Co-Arranger : Not applicable. (iv) Solicitor : Adnan Sundra & Low. (v) Financial Adviser : Not applicable. (vi) Technical Adviser : Not applicable. (vii) Trustee : Deutsche Trustees Malaysia Berhad ( Deutsche Trustees ). (viii) Guarantor : Not applicable. (ix) Valuer : Not applicable. (x) Facility Agent : CIMB. (xi) (xii) Primary Subscriber (under a bought deal arrangement) and Amount Subscribed Underwriter and Amount Underwritten : In the event the Sukuk (as defined hereunder) are issued on a bought deal basis, the primary subscribers and the amount subscribed will be identified prior to such issuance. : Not applicable. (xiii) Shariah Adviser : CIMB Islamic Bank Berhad. (xiv) Central Depository : Bank Negara Malaysia ( BNM ). (xv) Paying Agent : BNM. (xvi) Reporting Accountant : Messrs. Ernst & Young. (xvii) Calculation Agent : Not applicable. (xviii) Others (please specify) Lead Manager/ Bookrunner : CIMB and/or such other financial institutions to be appointed (if any).

4 Security Agent : CIMB. REIT Manager : Axis REIT Managers Berhad. REIT Trustee : OSK Trustees Berhad*. *Unless otherwise stated herein, all references to the REIT Trustee are references to such person acting in its capacity as the trustee for and on behalf of the unitholders of Axis-REIT. For the avoidance of doubt, such references will not include OSK Trustees Berhad acting either as a principal or in its capacity as a trustee for any other person or person(s). Tender Panel Members ( TPM ) 3. Facility Description (including the description of Islamic principle) : Persons to whom an issue of, or an offer or invitation to subscribe the Sukuk (as defined hereunder) is made, would fall within Schedule 6 or Section 229(1)(b) of the Capital Markets and Services Act, 2007 ( CMSA ) and Schedule 7 or Section 230(1)(b) of the CMSA, read together with Schedule 9 or Section 257(3) of the CMSA. : An Islamic medium term notes ( Sukuk ) issuance programme of up to RM300.0 million in nominal value ( Sukuk Programme ) based on the Islamic principle of Murabahah. The transaction documents will provide that no approval from the holders of any Sukuk ( Sukukholders ) will be required, for issuances of Sukuk throughout the tenure of the Sukuk Programme: (a) (b) (c) for the Issuer to issue Sukuk based on Islamic principles other than Murabahah; or to amend the structure described in this Principal Terms and Conditions so as to comply with any future requirements of the structure under Murabahah principle; or to amend the structure of any Islamic principles (other than Murabahah) which may be adopted by the Issuer, so as to comply with

5 any future requirements of the structure under those Islamic principles. The Sukuk may be structured based on such other Islamic principles to be determined, provided the prior approvals of the SC and the Shariah Adviser are obtained. For the avoidance of doubt, any changes to the structure of the Islamic principle(s) of any Sukuk which are outstanding shall require the prior approval of the Sukukholders of such outstanding Sukuk. Murabahah From time to time, the REIT Trustee and the Issuer acting on behalf of the Sukukholders will execute an asset purchase agreement ( Asset Purchase Agreement ) under which the REIT Trustee will sell certain Identified Assets (as defined hereunder) to the Issuer. The asset purchase price ( Asset Purchase Price ) will be the amount to be disbursed and will be in compliance with the SC s Shariah Advisory Council s ( SAC ) asset pricing requirements as set out in the SC s Islamic Securities Guidelines ( Sukuk Guidelines ) (revised on 12 July 2011 and effective on 12 August 2011). Pursuant to a Murabahah arrangement ( Murabahah Arrangement ), the Issuer will then sell the Identified Assets to the REIT Trustee via an asset sale agreement ( Asset Sale Agreement ). The Asset Sale Price ( Asset Sale Price ) shall be paid by the REIT Trustee on a deferred basis and shall be evidenced by the Sukuk. The Issuer shall then issue Sukuk to evidence the Asset Sale Price and the rights of the Sukukholders under the Asset Sale Agreement. The proceeds received from the Sukukholders shall be used by the Issuer to pay the Asset Purchase Price.

6 (I) Sukuk with periodic profit payments In respect of Sukuk with periodic profit payments, the Asset Sale Price shall be paid periodically in the form of periodic profit payments ( Periodic Profit Payments ) to the Issuer (who in turn will pay the Sukukholders). The Periodic Profit Payment amount ( Periodic Profit Payment Amount ) shall be made semiannually (each such date for distribution, a Periodic Profit Payment Date ), or such other frequency to be mutually agreed between the Issuer and the Lead Manager. The Asset Sale Price will represent the Asset Purchase Price and the aggregate Periodic Profit Payment Amount which is based on the Ceiling Rate (as defined hereunder) and which shall be determined prior to each issuance of Sukuk with periodic profit payments. The Ceiling Rate comprises the relevant Profit Rate and the relevant Step-up Profit Rate (if applicable) (as defined hereunder). Prior to the Expected Maturity Date (as defined hereunder), the Periodic Profit Payments will be based on the relevant Profit Rate. In the event the Issuer does not fully redeem any Sukuk with periodic profit payments on the Expected Maturity Date, such Sukuk will have Periodic Profit Payments based on the relevant Profit Rate plus the relevant Step-up Profit Rate, for the remaining tenure of such Sukuk. (II) Sukuk without periodic profit payments In respect of Sukuk without periodic profit payments, the Asset Sale Price shall be paid on a one-off basis ( One-off Profit Payment ) to the Issuer (who in turn will pay the Sukukholders) upon the occurrence of the following events:

7 (a) (b) the Expected Maturity Date (as defined hereunder); or following a Trigger Event (as defined hereunder); and/or (c) the Legal Maturity Date (as defined hereunder) or upon the declaration of an Event of Default/Dissolution Event, whichever is the earlier. In the event the Issuer does not fully redeem any Sukuk without periodic profit payments on the Expected Maturity Date, such Sukuk will have Periodic Profit Payments based on the Step-up Profit Rate, for the remaining tenure of such Sukuk. In such circumstances, the Periodic Profit Payment Amount shall be made semi-annually, or such other frequency to be mutually agreed between the Issuer and the Lead Manager. The Asset Sale Price will represent the Asset Purchase Price and the Discounted Amount (as defined hereunder) and the aggregate Periodic Profit Payment Amount which is based on the Step-up Profit Rate of the relevant Sukuk (if applicable). Discounted Amount means the difference between the nominal value of the Sukuk or the accreted value of the relevant Sukuk (whichever is applicable) and the Asset Purchase Price. Expected Maturity Redemption Undertaking and Redemption Undertaking Pursuant to the Expected Maturity Redemption Undertaking (as defined hereunder), the Issuer shall have the right to require the Sukuk to be redeemed in full on the relevant Expected Maturity Date (as defined hereunder), if the Issuer has provided a notice in this respect at least thirty (30) days prior to the relevant Expected Maturity Date. The REIT Trustee (as part of its obligation to pay the Asset Sale Price) will pay all amounts

8 then outstanding on the Asset Sale Price due up to the Legal Maturity Date of the relevant Sukuk as final settlement of the same (subject to the Redemption Rebate (as defined hereunder)) upon which, the relevant Sukuk will be cancelled. Pursuant to the Redemption Undertaking (as defined hereunder): (a) (b) the REIT Trustee shall grant to the Issuer the right to require the REIT Trustee to accelerate the payment of the amounts outstanding on the Asset Sale Price (in full or in part) (subject to the Redemption Rebate (as defined hereunder) following a Trigger Event (as defined hereunder). The Issuer will subsequently use the payment received from the REIT Trustee to redeem the relevant outstanding Sukuk upon which, the relevant Sukuk will be cancelled. the REIT Trustee shall grant to the Issuer the right to require the REIT Trustee to accelerate the payment of all amounts then outstanding on the Asset Sale Price of the relevant Sukuk as final settlement of the same (subject to the Redemption Rebate (as defined hereunder), if applicable) on the Legal Maturity Date (as defined hereunder) of the Sukuk or the date of declaration of Event of Default/Dissolution Event. The Issuer will subsequently redeem the Sukuk in full upon which, the relevant Sukuk will be cancelled. Redemption Rebate and Discounted Amount Rebate A Redemption Rebate (as defined hereunder) will be granted if the relevant Sukuk are redeemed before their Legal Maturity Date (as defined hereunder). The Asset Sale Price payable by the REIT Trustee under such circumstances shall be determined by the Facility Agent and

9 shall be calculated in accordance with the formula below: Asset Sale Price payable for the relevant Sukuk = Asset Sale Price calculated up to the Legal Maturity Date of the relevant Sukuk (a) less the aggregate Periodic Profit Payments paid (if any), (b) less the Redemption Rebate, and (c) less the Discounted Amount Rebate (if applicable). Redemption Rebate means the difference between (a) the Asset Sale Price calculated up to the Legal Maturity Date of the relevant Sukuk and (b) the Asset Sale Price calculated up to the date of a declaration of an Event of Default/Dissolution Event or a Trigger Event of the relevant Sukuk or the Expected Maturity Date of the relevant Sukuk. For the avoidance of doubt: (i) the Redemption Rebate for redemption prior to the Expected Maturity Date for Sukuk without period profit payments shall be the difference between (a) the Asset Sale Price calculated up to the Legal Maturity Date of the relevant Sukuk and (b) the Asset Sale Price calculated up to the Expected Maturity Date. (ii) the Redemption Rebate for redemption on or after the Expected Maturity Date for Sukuk without periodic profit payments shall be the difference between (a) the Asset Sale Price calculated up to the Legal Maturity Date of the relevant Sukuk and (b) the Asset Sale Price calculated up to the date of the redemption of the relevant Sukuk. Discounted Amount Rebate means the difference between (a) Discounted Amount calculated up to the Expected Maturity Date and (b) Discounted Amount

10 calculated up to the date of a declaration of an Event of Default/Dissolution Event, and only applies in the case of redemption of Sukuk without periodic profit payments prior to the Expected Maturity Date. A diagrammatical illustration of the transaction is set out in Annexure Issue/Programme Size (RM) : The aggregate outstanding nominal value of Sukuk issued under the Sukuk Programme at any point in time shall not exceed RM300.0 million. For the first Sukuk issue under the Sukuk Programme ( First Sukuk Issue ), the issue size shall be divided into the following tranches: Tranche Class Nominal Value (RM million) 1 A 95 2 B 5 3 C 5 4 D 5 5 E 8 6 F 6 7 G 6 Total 130 *The details of the tranches (including the aggregate issue size) are subject to change and the final details will be determined prior to the First Sukuk Issue. 5. Tenure of Issue/Sukuk Programme (or facility) : Tenure of the Sukuk Programme Fifteen (15) years from the date of the first issue under the Sukuk Programme. Tenure of the First Sukuk Issue The First Sukuk Issue shall have the following Expected Maturity Date and Legal Maturity Date: Tranche Expected Maturity Date (no. of years from issuance date) Legal Maturity Date (no. of years from issuance date) 1 10 years 12 years

11 2 10 years 12 years 3 10 years 12 years 4 10 years 12 years 5 10 years 12 years 6 10 years 12 years 7 10 years 12 years *The details of the tranches are subject to change and the final details will be determined prior to the First Sukuk Issue. The Expected Maturity Date is the date earmarked for the Issuer to fully redeem the relevant Sukuk before the Legal Maturity Date. In the event the Issuer does not fully redeem the relevant Sukuk on the Expected Maturity Date, this will be a Trigger Event (as defined under clause 23(a)). The Legal Maturity Date is the final maturity of the Sukuk by which time the Sukuk must be fully redeemed, failing which, this will be an Event of Default/Dissolution Event. The Legal Maturity Date shall not be a date after the expiry of the Sukuk Programme. 6. Availability Period of Sukuk Programme (or facility) : The period commencing from the date of completion of documentation and, unless waived by the Lead Arranger, compliance of all conditions precedent and other applicable conditions to the satisfaction of the Lead Arranger provided that the Legal Maturity Date of the Sukuk shall mature prior to the expiry of the Sukuk Programme. 7. Profit/Coupon/Rental Rate : The Profit Rate (if applicable) will be determined prior to each issuance of Sukuk under the Sukuk Programme. In the event the Issuer does not fully redeem the relevant Sukuk on the Expected Maturity Date, the Sukukholders will be entitled to a step-up profit rate ( Step-up Profit Rate ) on the remaining outstanding Sukuk from (and including) the Expected Maturity Date and up to (and excluding) the earlier of the date of full redemption of the Sukuk or the Legal Maturity Date of the Sukuk.

12 The Step-up Profit Rate for each Sukuk will be determined prior to each issuance under the Sukuk Programme. 8. Profit/Coupon/Rental Payment Frequency 9. Profit/Coupon/Rental Payment Basis : Semi-annual in arrears or such other frequency to be mutually agreed between the Issuer and the Lead Manager (if applicable). : Actual/365 days. 10. Security/Collateral (if any) : Security/Collateral for the Sukuk Programme 1. Assignment and charge of all the shares in the capital of the Issuer. 2. Debenture over all present and future assets of the Issuer. 3. Such other security as may be advised by the legal counsel of the Lead Arranger. Security/Collateral for the First Sukuk Issue 1. A first ranking third party legal charge over the land and buildings as described in Annexure 2 ( Properties ). 2. An irrevocable and unconditional power of attorney ( Power of Attorney ) to be granted by the REIT Trustee in favour of the Security Agent to dispose of and/or manage the Properties upon the occurrence of a Trigger Event or an Event of Default/Dissolution Event. 3. Assignment of the lease agreements between the present and future tenants/lessees of the Properties and the REIT Trustee. 4. Assignment of the rights and benefits under the takaful/insurance policies for the Properties.

13 5. First ranking charge and assignment over the Designated Accounts (as defined hereunder) and monies standing in the accounts and Permitted Investments (as defined hereunder). 6. A letter of undertaking ( Letter of Undertaking ) from the REIT Manager/REIT Trustee, whereby the REIT Manager/REIT Trustee undertake, amongst others: (a) To deposit all rental cash flows generated from the Properties into the Collection Account (as defined hereunder); (b) To deposit all rental cash flows generated from the Properties into the FSRA (as defined hereunder) upon the occurrence of an Event of Default/Dissolution Event or Trigger Event; (c) To deposit all proceeds from the disposal of the Properties by the Security Agent following the execution of the Power of Attorney into the FSRA (as defined hereunder); (d) That it will not declare any distributions to Axis-REIT s unitholders if an Event of Default/Dissolution Event or Trigger Event (as defined hereunder) has occurred under the transaction documents, is continuing and has not been waived; (e) That it will operate the Collection Account in the manner as prescribed under the transaction documents; and (f) That it will not file a petition for or institute, join any other

14 persons in instituting proceedings for the liquidation or winding-up of the Issuer or other similar proceedings under any applicable laws. 7. Such other security as may be advised by the legal counsel of the Lead Arranger and to be mutually agreed between the REIT Trustee, the Issuer and the Lead Manager. Security/Collateral for subsequent issuance(s) of Sukuk under the Sukuk Programme ( Subsequent Issuances ) To be determined prior to each issuance. 11. Details on Utilisation of Proceeds : For the First Sukuk Issue Issuer The proceeds from the Sukuk will be used by the Issuer to finance the acquisition of the Identified Assets by way of transfer of beneficial ownership, from the REIT Trustee. REIT Trustee The REIT Trustee will utilise the monies received from the Issuer for the following purposes, which shall at all times be Shariah-compliant: No. Utilisation 1. To deposit monies into the FSRA (as defined hereunder) up to the Minimum Required Balance (as defined hereunder) 2. To pay for the upfront incidental costs and expenses relating to the establishment of the Sukuk Programme 3. To refinance Axis-REIT s existing credit facilities For Subsequent Issuances under the Sukuk Programme The REIT Trustee will utilise the monies

15 received from the Issuer for its Shariahcompliant general corporate purposes. 12. Sinking Fund and Designated Accounts (if any) : Sinking Fund Not applicable. Designated accounts for the First Sukuk Issue ( Designated Accounts ) Including the following: 1. Disbursement Account ( DA ) The Issuer shall open a Shariah-compliant DA with a financial institution with minimum ratings of A3/P1 (or their equivalent) from RAM or Malaysian Rating Corporation Berhad ( MARC ) and acceptable to the Lead Arranger. The DA shall be operated solely by the Security Agent to capture the proceeds from the First Sukuk Issue after netting off the incidental costs and expenses relating to the establishment of the Sukuk Programme (if any). Monies in the DA shall be utilised by the Issuer in accordance with the purpose mentioned in clause 11. Excess funds in the DA may be invested in Permitted Investments. 2. Collection Account ( CA ) The REIT Trustee shall open a Shariahcompliant CA with a financial institution with minimum ratings of A3/P1 (or their equivalent) from RAM or MARC and acceptable to the Lead Arranger. The CA shall be operated solely by the REIT Trustee to capture cash inflows to Axis- REIT in relation to the Properties and, other income and takaful proceeds in relation to the Properties. Monies in this account shall be applied based on the following order of priority: a. Any statutory payments in respect of the Properties (e.g. assessment fees, quit rent, tax, etc.) which are

16 due and payable. b. Takaful/insurance for the Properties. c. Fees relating to the Sukuk Programme. d. Payment for the Issuer s operating and non-operating expenses. e. General maintenance expenses of the Properties. f. To make any top-up payments of the FSRA (as defined hereunder). g. To make Periodic Profit Payments to the Issuer. The payments are to be deposited into the FSA (as defined hereunder). h. Payment for Axis-REIT s operating and non-operating expenses. i. Such other purposes that the REIT Trustee deems fit. Upon the occurrence of an Event of Default/Dissolution Event or Trigger Event any credit balances in the CA will be transferred into the FSRA. Further, the REIT Trustee shall ensure that cash inflows to Axis-REIT in relation to the Properties shall be deposited into the FSRA. For the avoidance of doubt, in respect of items c. and d. above, in the event of any future issuance(s) of Sukuk under the Sukuk Programme, the payments/expenses in relation to these items c. and d. shall be paid from the balances of the respective CA of the First Sukuk Issue and the Subsequent Issuances, in proportion to the respective outstanding nominal values of the First Sukuk Issue and the subsequent Sukuk issue(s). 3. Finance Service Account ( FSA ) The REIT Trustee shall open a Shariahcompliant FSA with a financial institution with minimum ratings of A3/P1 (or their equivalent) from RAM or MARC and acceptable to the Lead Arranger. The FSA shall be operated solely by the Security Agent to capture:

17 a. Monies from the CA for Periodic Profit Payments. b. Monies from the disbursement/drawdown of any new financing undertaken to redeem the Sukuk prior to the occurrence of an Event of Default/Dissolution Event or a Trigger Event. c. Proceeds from the exercise of the Expected Maturity Redemption Undertaking in relation to the Sukuk. Funds in the FSA shall be utilised in the following order of priority: a. Periodic Profit Payment Amount of the Class A Sukuk. b. Periodic Profit Payment Amount of the Class B Sukuk. c. Periodic Profit Payment Amount of the Class C Sukuk. d. Periodic Profit Payment Amount of the Class D Sukuk. e. Periodic Profit Payment Amount of the Class E Sukuk. f. Periodic Profit Payment Amount of the Class F Sukuk. g. Periodic Profit Payment Amount of the Class G Sukuk. h. Nominal Value of the Class A Sukuk. i. Nominal Value of the Class B Sukuk. j. Nominal Value of the Class C Sukuk. k. Nominal Value of the Class D Sukuk. l. Nominal Value of the Class E Sukuk. m. Nominal Value of the Class F Sukuk. n. Nominal Value of the Class G Sukuk. For the avoidance of doubt, the funds in the FSA will be used to firstly pay, in full, the items of the highest priority (based on the relevant order of priority applicable in the relevant circumstances), before the remaining funds in the FSA (if any) are

18 used to pay the items of lower priority (based on the relevant order of priority applicable in the relevant circumstances). Upon the occurrence of an Event of Default/Dissolution Event or Trigger Event any credit balances in the FSA will be transferred into the FSRA. Further, the REIT Trustee shall ensure that all monies from the disbursement/drawdown of any new financing undertaken to redeem the Sukuk (if any) shall be deposited into the FSRA. Funds held in the FSA may be invested in Permitted Investments. 4. Finance Service Reserve Account ( FSRA ) The Issuer shall open a Shariah-compliant FSRA with a financial institution with minimum ratings of A3/P1 (or their equivalent) from RAM or MARC and acceptable to the Lead Arranger. The FSRA shall be operated solely by the Security Agent to capture: a. An amount equivalent to the aggregate Periodic Profit Payment Amount payment under any outstanding Sukuk due in the next twelve (12) month period ( Minimum Required Balance ). b. Monies from the disbursement/drawdown of any new financing undertaken to redeem the Sukuk following the occurrence of an Event of Default/Dissolution Event or a Trigger Event. c. Proceeds from the exercise of the Redemption Undertaking in relation to the Sukuk. d. Proceeds from the disposal of the Properties following the occurrence of an Event of Default/Dissolution Event or a Trigger Event. e. Cash inflows to Axis-REIT in relation to the Properties following the occurrence of an Event of

19 Default/Dissolution Event or a Trigger Event. The Issuer shall maintain the Minimum Required Balance at all times. Prior to the occurrence of an Event of Default/Dissolution Event or a Trigger Event: a. Monies in the FSRA shall be used to top-up any deficit amount in the FSA. Any amount withdrawn from the FSRA shall be replenished within five (5) business days after the withdrawal date so that the Minimum Required Balance is maintained; and b. Any monies standing in the FSRA exceeding the Minimum Required Balance shall be deposited into the CA. Following the occurrence of a Trigger Event, funds in the FSRA shall be utilised in the following order of priority: a. Any statutory payments in respect of the Properties (e.g. assessment fees, quit rent, tax, etc.). b. Takaful/insurance for the Properties. c. Fees relating to the Sukuk Programme. d. Payment for the Issuer s operating and non-operating expenses. e. General maintenance expenses of the Properties up to an aggregate amount of RM2.4 million per annum. f. Periodic Profit Payment Amount of the Class A Sukuk. g. Periodic Profit Payment Amount of the Class B Sukuk. h. Periodic Profit Payment Amount of the Class C Sukuk. i. Periodic Profit Payment Amount of the Class D Sukuk. j. Periodic Profit Payment Amount of the Class E Sukuk. k. Periodic Profit Payment Amount of the Class F Sukuk.

20 l. Periodic Profit Payment Amount of the Class G Sukuk m. Nominal Value of the Class A Sukuk. n. Nominal Value of the Class B Sukuk. o. Nominal Value of the Class C Sukuk. p. Nominal Value of the Class D Sukuk. q. Nominal Value of the Class E Sukuk. r. Nominal Value of the Class F Sukuk. s. Nominal Value of the Class G Sukuk. t. Payment for Axis-REIT s operating and non-operating expenses other than e. above. Following the occurrence of an Event of Default/Dissolution Event, funds in the FSRA shall be utilised in the following order of priority: a. Any statutory payments in respect of the Properties (e.g. assessment fees, quit rent, tax, etc.) which are due and payable. b. Takaful/insurance for the Properties. c. Fees relating to the Sukuk Programme. d. Nominal Value, one Periodic Profit Payment Amount and any Compensation/Ta widh for the Class A Sukuk. e. Nominal Value, one Periodic Profit Payment Amount and any Compensation/Ta widh for the Class B Sukuk. f. Nominal Value, one Periodic Profit Payment Amount and any Compensation/Ta widh for the Class C Sukuk. g. Nominal Value, one Periodic Profit Payment Amount and any Compensation/Ta widh for the Class D Sukuk. h. Nominal Value, one Periodic Profit Payment Amount and any Compensation/Ta widh for the

21 Class E Sukuk. i. Nominal Value, one Periodic Profit Payment Amount and any Compensation/Ta widh for the Class F Sukuk. j. Nominal Value, one Periodic Profit Payment Amount and any Compensation/Ta widh for the Class G Sukuk. For the avoidance of doubt, the funds in the FSRA will be used to firstly pay, in full, the items of the highest priority (based on the relevant order of priority applicable in the relevant circumstances), before the remaining funds in the FSRA (if any) are used to pay the items of lower priority (based on the relevant order of priority applicable in the relevant circumstances). Funds in the FSRA may be invested in Permitted Investments. Designated accounts for Subsequent Issuances To be determined prior to each issuance. 13. Rating - Credit Rating Assigned : First Sukuk Issue The preliminary ratings for the First Sukuk Issue are as follows: Tranche Preliminary Rating 1 AAA 2 AA 1 3 AA 2 4 AA 3 5 A 1 6 A 2 7 A 3 - Name of Rating Agency : First Sukuk Issue RAM Rating Services Berhad ( RAM ). 14. Mode of Issue : The Sukuk may be issued via competitive tender basis by the TPMs or via bought deal basis or via direct placement on a best effort basis or via bookrunning on a

22 best effort basis. 15. Selling Restriction (including tradability) : Selling Restrictions at Issuance The Sukuk 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 may be made and to whom the Sukuk are issued would fall within Schedule 6 or Section 229(1)(b) of the 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 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 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. 16. Listing Status and Types of Listing 17. Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) : The Sukuk may be listed on Bursa Malaysia Securities Berhad under its Exempt Regime. : Not applicable. 18. Conditions Precedent : Conditions precedent for the establishment of the Sukuk Programme and the First Sukuk Issue Including but not limited to the following (all have to be in form and substance acceptable to the Lead Arranger and the Lead Manager): a) The transaction documents have been executed and where applicable, stamped and presented for registration. b) All relevant notices and acknowledgement (where applicable) shall have been made or received, as the case may be.

23 c) Certified true copies of the Certificate of Incorporation, and the Memorandum and Articles of Association of the Issuer, the REIT Manager and the REIT Trustee. d) Certified true copies of the latest Forms 24 and 49 of the Issuer, the REIT Manager and the REIT Trustee. e) A certified true copy of the board resolutions of the Issuer, the REIT Manager and the REIT Trustee authorising, amongst others, the execution of the transaction documents to which it is a party. f) A list of authorised signatories for the Issuer, the REIT Manager and the REIT Trustee and their respective specimen signatures. g) A report of the relevant company search of the Issuer, the REIT Manager and the REIT Trustee. h) A report of the relevant winding-up search of the Issuer, the REIT Manager and the REIT Trustee. i) The approval from the SC, and where applicable, all other regulatory approvals. j) Evidence that the relevant ratings have been obtained from RAM for the First Sukuk Issue. k) Evidence that all the transaction fees, costs and expenses will be paid in full. l) Evidence that the structure and transaction documents have received the approval from the Shariah Adviser. m) Evidence that the Designated Accounts have been opened in the manner prescribed under the transaction documents.

24 n) Receipt of the security documents in relation to the security/collateral for the First Sukuk Issue including but not limited to the assignment of the lease agreements and the Letter of Undertaking, all in form and content satisfactory to the Lead Arranger and the Lead Manager. o) Receipt of the necessary consents, where applicable, from existing lenders (including receipt of the relevant redemption statement and undertaking from existing lenders that any existing charges will be discharged immediately once all outstanding amounts have been paid (if applicable)). p) Receipt of the valuation reports for the Properties in form and substance acceptable to the Lead Arranger and the Lead Manager and satisfactory land searches on the Properties. q) Receipt of the necessary consents, where applicable, for the REIT Trustee to sell the Properties to the Issuer and to assign the lease agreements and acknowledgement of such assignment from the tenants/lessees of the Properties. r) The Lead Arranger and the Lead Manager have received from their legal counsel a favourable legal opinion addressed to them and the Trustee advising with respect to, amongst others, the legality, validity and enforceability of the transaction documents and a confirmation addressed to the Lead Arranger and the Lead Manager that all the conditions precedent have been fulfilled. s) Such other conditions precedent as may be advised by the legal counsel of the Lead Arranger and the Lead Manager and to be mutually agreed between the REIT Trustee, the Issuer, the Lead Arranger and the

25 Lead Manager. Conditions precedent for Subsequent Issuances Including but not limited to the following (all have to be in form and substance acceptable to the Lead Arranger and the Lead Manager): a) Confirmation from the Issuer that all representations and warranties remain true and accurate. b) The approval from the SC, and where applicable, all other regulatory approvals. c) Evidence that the relevant ratings have been obtained from RAM. d) Evidence that the relevant designated accounts have been opened in the manner prescribed under the transaction documents. e) Receipt of the relevant security documents in relation to the security/collateral for such Subsequent Issuances including but not limited to the relevant assignment of lease agreements (if applicable), the letter of undertaking from the REIT Manager/REIT Trustee (if applicable) all in form and content satisfactory to the Lead Arranger and the Lead Manager. f) Receipt of the necessary consents, where applicable, from existing lenders (including receipt of the relevant redemption statement and undertaking from existing lenders that any existing charges will be discharged immediately once all outstanding amounts have been paid (if applicable)). g) All relevant notices and acknowledgement (where applicable) shall have been made or received, as the case may be.

26 h) Receipt of the valuation reports for the relevant properties in form and substance acceptable to the Lead Arranger and the Lead Manager and satisfactory land searches on the relevant properties. i) Receipt of the necessary consents, where applicable, for the REIT Trustee to sell the relevant properties to the Issuer and to assign the lease agreements and acknowledgement of such assignment from the tenants/lessees of the relevant properties. j) No Event of Default/Dissolution Event has occurred and is continuing. k) Approval and confirmation from the Shariah Adviser on the Sukuk issuance (including the Identified Assets). l) The Lead Arranger and the Lead Manager have received from their legal counsel a favourable legal opinion addressed to them and the Trustee advising with respect to, amongst others, the legality, validity and enforceability of the transaction documents and a confirmation addressed to the Lead Arranger and the Lead Manager that all the conditions precedent have been fulfilled. m) Such other conditions precedent as may be advised by the legal counsel of the Lead Arranger and the Lead Manager and to be mutually agreed between the REIT Trustee, the Issuer, the Lead Arranger and the Lead Manager. 19. Representations and Warranties : Including but not be limited to the following: (i) Each of the Issuer, the REIT Manager and the REIT Trustee is a company duly incorporated and

27 validly existing under the laws of the Malaysia, and has the power and authority to conduct the business which it conducts; (ii) The Issuer, REIT Trustee and REIT Manager (where applicable) have the power to enter into, exercise its rights under and perform its obligations under the transaction documents to which it is a party; (iii) All actions, conditions and things required to be taken, fulfilled and done (including the obtaining of any necessary consents, approvals, exemptions, filings, licences, orders and corporate authorisations of the Issuer, the REIT Manager and the REIT Trustee) in order (a) to enable them lawfully to enter into, exercise their rights and perform and comply with their obligations under the transaction documents to which it is a party and to issue and perform and in the case of the Issuer, comply with its obligations under the Sukuk, (b) to ensure that those obligations are legally binding and enforceable, and (c) to make the transaction documents admissible in evidence in the courts of Malaysia have been taken, fulfilled and done and are in full force and effect; (iv) Each of the Issuer s, the REIT Manager s and the REIT Trustee s entry into, exercise of its rights and/or performance of or compliance with its obligations under the transaction documents to which it is a party and, in the case of the Issuer, the issuance of the Sukuk and performance of its obligations thereunder do not violate (a) any law to which it is subject, (b) any provision of its Memorandum and Articles of Association or (c) any agreement to which it is a party or which is binding on it or its assets and do not result in the creation of any security over the assets or

28 cause to be exceeded any limit imposed by, any trust deed, agreement or other instrument or obligations which the Issuer is a party; (v) The transaction documents constitute, and, when issued, the Sukuk will constitute, legal, valid and binding obligations of the Issuer, the REIT Trustee and the REIT Manager (as the case may be), and enforceable in accordance with their respective terms; (vi) No litigation or arbitration is current or, to each of the Issuer s, the REIT Manager s and the REIT Trustee s knowledge after making all reasonable inquiries, is threatened, which if adversely determined would have a material adverse effect on the ability of the Issuer, the REIT Manager or the REIT Trustee to comply with the transaction documents; (vii) No material tax liabilities of the Issuer, the REIT Trustee or the REIT Manager (as the case may be) of any kind are outstanding in payments and all computations and payments have been made to the Department of Inland Revenue or other relevant authorities within the requisite time periods and are up-todate, correct and made on a proper basis without any disputes with the Department of Inland Revenue and other relevant authorities; and (viii) Such other representations and warranties as may be advised by the legal counsel of the Lead Arranger and the Lead Manager and to be mutually agreed between the REIT Trustee, the Issuer, the Lead Arranger and the Lead Manager. 20. Events of Default/ Dissolution Events : The Events of Default/Dissolution Events include the following:

29 Issuer (a) The Issuer fails to pay or distribute any amount due from it under any of the transaction documents on the due date (other than on the Expected Maturity Date in respect of the Sukuk) or, if so payable, on demand; (b) Any representation or warranty made or given by the Issuer, under the transaction documents or which is contained in any certificate, document or statement furnished at any time pursuant to the terms of the Sukuk and/or any of the transaction documents proves to have been incorrect or misleading in any material respect on or as of the date made or given or deemed made or given and in the case of a failure which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the failure within a period of fourteen (14) days after the Issuer became aware or was notified by the Trustee of the failure; (c) The Issuer fails to observe or perform its obligations under any of the transaction documents or the Sukuk or under any undertaking or arrangement entered into in connection therewith other than an obligation of the type referred to in paragraph (a) above, and in the case of a failure which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the failure within a period of fourteen (14) days after the Issuer became aware or was notified by the Trustee of the failure; (d) Any indebtedness for financing of the Issuer becomes due or payable or capable of being declared due or payable prior to its stated maturity or any guarantee or similar obligations of the Issuer is not discharged at

30 maturity or when called and such declaration of indebtedness being due or payable or such call on the guarantee or similar obligations is not discharged or disputed in good faith by the Issuer in a court of competent jurisdiction within twenty one (21) days from the date of such declaration or call, or the Issuer goes into default under, or commits a breach of, any agreement or instrument relating to any such indebtedness, guarantee or other obligations, or any security created to secure such indebtedness becomes enforceable and such default or breach is not remedied, or enforcement of security is not discharged or discontinued by the Issuer within twenty one (21) days from the date of such default, breach or enforcement; (e) There has been a breach by the Issuer under any of the existing contractual obligations which may materially and adversely affect the Issuer s ability to perform its obligations under the transaction documents and, if in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the failure within a period of fourteen (14) days after the Issuer became aware or was notified by the Trustee of the breach; (f) An encumbrancer take possession of, or a trustee, receiver, receiver and manager or similar officer is appointed in respect of the whole or substantial part of the business or assets of the Issuer, or distress, legal process, sequestration or any form of execution is levied or enforced or sued out against the Issuer and not discharged by the Issuer within fourteen (14) days after being levied, enforced or sued out, or any security interest which may for the time being affect any of its assets becomes enforceable;

31 For the purpose of this clause (f), references to substantial shall mean such value equivalent to 5% of the consolidated total assets of the Issuer which shall be based on the audited consolidated financial statements of the Issuer. For the avoidance of doubt, in the case where consolidated financial statements are not available, references to substantial shall mean such value equivalent to 5% of the total assets of the Issuer which shall be based on the audited financial statements of the Issuer. (g) The Issuer fails to satisfy any judgment passed against it by any court of competent jurisdiction and no appeal against such judgment or an application for a stay of execution has been made to any appropriate appellate court within the time prescribed by law or such appeal or application for a stay of execution has been dismissed; (h) (i) A resolution is passed for the winding-up of the Issuer or (ii) a petition for winding-up is presented against the Issuer or any other step is taken for the winding-up, dissolution or liquidation of the Issuer and the Issuer has not taken any action in good faith to set aside such petition or such step within fourteen (14) days from the date of service of such winding-up petition or the taking of such step or (iii) a windingup order has been made against the Issuer; (i) The Issuer convenes a meeting of its financiers/creditors or proposes or makes any arrangement including any scheme of arrangement or composition or begins negotiations with its financiers/creditors, or takes any proceedings or other steps, with a view to a rescheduling or deferral of all or any part of its indebtedness or a moratorium is agreed or

32 declared by a court of competent jurisdiction in respect of or affecting all or any parts of its indebtedness or any assignment for the benefit of its financiers/creditors (other than for the purposes of and followed by a reconstruction previously approved in writing by the Trustee, unless during or following such reconstruction, the Issuer becomes or is declared insolvent) or where a scheme of arrangement under section 176 of the Companies Act 1965 has been instituted against the Issuer; (j) Where there is a revocation, withholding, invalidation or modification of any license, authorisation, approval or consent which in the opinion of the Trustee may materially and adversely impair or prejudice the ability of the Issuer to comply with the terms and conditions of the Sukuk or the transaction documents; (k) (l) The Issuer is deemed unable to pay any of its debts or becomes unable to pay any of its debts as they fall due or suspends or threatens to suspend making payments with respect of all or any class of its debts; Any financier/creditor of the Issuer exercises a contractual right to take over the financial management of the Issuer and such event in the opinion of the Trustee may have a Material Adverse Effect on the Issuer; (m) At any time any of the provisions of the transaction documents is or becomes illegal, void, voidable or unenforceable; (n) The Issuer repudiates any of the transaction documents or the Issuer does or causes to be done any act or thing evidencing an intention to repudiate any of the transaction

33 documents; (o) Any of the assets, undertakings, right or revenue of the Issuer are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any governmental body which in the opinion of the Trustee may have a Material Adverse Effect on the Issuer; (p) A distress, execution, attachment or other legal process is levied, enforced or sued out against any of the REIT Trustee s properties and is not discharged or stayed within thirty (30) days which, in the opinion of the Trustee, will have a Material Adverse effect on the ability of the Issuer to continue to collect the Periodic Profit Payments from the REIT Trustee in order to meet its obligations under the Sukuk Programme; (q) Any event or events has or have occurred or a situation exists which in the opinion of the Trustee may have a Material Adverse Effect on the Issuer, and in the case of the occurrence of such event or situation which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the failure within a period of fourteen (14) days after the Issuer became aware or having been notified by the Trustee of the event or situation. Axis-REIT and/or the REIT Trustee (a) Any representation or warranty made or given by the REIT Trustee under the transaction documents or which is contained in any certificate, document or statement furnished at any time pursuant to the terms of the Sukuk and/or any of the transaction documents proves to have been incorrect or misleading in any material respect on or as of the date made or given or deemed made or given and in the case of a failure

34 which in the opinion of the Trustee is capable of being remedied, the REIT Trustee does not remedy the failure within a period of fourteen (14) days after the REIT Trustee became aware or was notified by the Trustee of the failure; (b) The REIT Trustee fails to observe or perform its obligations under any of the transaction documents or the Sukuk or under any undertaking or arrangement entered into in connection therewith other than an obligation of the type referred to in Item 23(a)(l)(b) below, and in the case of a failure which in the opinion of the Trustee is capable of being remedied, the REIT Trustee does not remedy the failure within a period of fourteen (14) days after the REIT Trustee became aware or was notified by the Trustee of the failure; (c) There has been a breach by the REIT Trustee under any of the existing contractual obligations which may materially and adversely affect the REIT Trustee s ability to perform its obligations under the transaction documents and, if in the opinion of the Trustee is capable of being remedied, the REIT Trustee does not remedy the failure within a period of fourteen (14) days after the REIT Trustee became aware or was notified by the Trustee of the breach; (d) Any indebtedness for financing of the REIT Trustee becomes due or payable or capable of being declared due or payable prior to its stated maturity or any guarantee or similar obligations of the REIT Trustee is not discharged at maturity or when called and such declaration of indebtedness being due or payable or such call on the guarantee or similar obligations is not discharged or disputed in good faith by the REIT Trustee in a court of competent jurisdiction within twenty one (21)

35 days from the date of such declaration or call, or the REIT Trustee goes into default under, or commits a breach of, any agreement or instrument relating to any such indebtedness, guarantee or other obligations, or any security created to secure such indebtedness becomes enforceable and such default or breach is not remedied, or enforcement of security is not discharged or discontinued by the REIT Trustee within twenty one (21) days from the date of such default, breach or enforcement; (e) An encumbrancer take possession of, or a trustee, receiver, receiver and manager or similar officer is appointed in respect of the whole or substantial part of the business or assets of Axis-REIT, or distress, legal process, sequestration or any form of execution is levied or enforced or sued out against the REIT Trustee and is not discharged within fourteen (14) days after being levied, enforced or sued out, or any security interest which may for the time being affect any of its assets becomes enforceable; For the purpose of this clause (e), references to substantial shall mean such value equivalent to 5% of the consolidated total assets of Axis- REIT which shall be based on the audited consolidated financial statements of Axis-REIT. For the avoidance of doubt, in the case where consolidated financial statements are not available, references to substantial shall mean such value equivalent to 5% of the total assets of Axis-REIT which shall be based on the audited financial statements of Axis-REIT. (f) The REIT Trustee fails to satisfy any judgment passed against it by any court of competent jurisdiction and no appeal against such judgment or