PROPOSED ISSUE OF AL-ISTISNA' FIXED RATE SERIAL BONDS WITH NOMINAL VALUE OF UP TO RMl,515.0 MILLION. Present structure of shareholdings

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1 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD ;,.. 650M W Perlis Power Plant Project PROPOSED ISSUE OF AL-ISTISNA' FIXED RATE SERIAL BONDS WITH NOMINAL VALUE OF UP TO RMl,515.0 MILLION Summary of Principal Terms of the Al-Istisna' Facility Issuer Shareholders Teknologi Tenaga Perlis Consortium Sdn Bhd ("TTPC" or "Project Company") Present structure of shareholdings Shareholder Shareholding (%) Alpha Intercontinental Sdn Bhd Gerbang Sutera Sdn Bhd 7.92 Landmarks Hotels & Realty Sdn Bhd Tenaga Nasional Berhad Infostas Engineering Sdn Bhd Proposed structure of shareholdings at the point of issue of the AI-Istisna' Bonds Shareholder Shareholding (%) Alpha Intercontinental Sdn Bhd 30.0 Gerbang Sutera Sdn Bhd 20.0 Landmarks Hotels & Realty Sdn Bhd 20.0 Tenaga Nasional Berhad 20.0 Infostas Engineering Sdn Bhd

2 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650MW Perlis Power Plant Project Project Lead Arranger Financiers/Primary Subscriber( s) Facility issuing Agent Project Agent Syariah Advisor Trustee / Security Agent The development, design, construction, commissioning, operation and maintenance of a new 650MW Combined Cycle Gas Turbine ("CCGT") power plant in Perlis ("the Plant") on a 'build-own-operate' basis pursuant to a 21- year Power Purchase Agreement ("PP A") signed with Tenaga Nasional Berhad ("TNB") Bank Utarna (Malaysia) Berhad ("Bank Utama' Bank Utama Bank Utama Bank Utama Muamalah Financial Consulting Sdn Bhd Bumiputra-Commerce Trustee Berhad Management/Syariah/F acility Fees Facility Agent Payable to Bank Utama upon issue of Bonds in accordance with mandate letter dated 27 June 2001 Under the AI-Bai Bithaman Ajil concept of financing according to the contract of AI-Istisna', the Financiers, or Primary Subscibers under the auspices of a special purpose vehicle created for the purpose of the financing the Project Company will enter into an agreement to purchase from TTPC the Plant described above ("the Istisna' Assets") at an agreed Purchase Price. The Financiers shall immediately sell back the Assets to TTPC, also under the concept of Al-Bai Bitharnan Ajil according to the contract of AI-Istisna' at a Selling Price which shall be made up of the original Purchase Price and a profit margin to be imposed by the Financiers. TTPC is to settle the Selling Price by instalments. 2

3 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650MW Per/is Power Plant Project AI-Istisna' Purchase Price / Facility Amount (Issue Proceeds) AI-Istisna, Selling Price (Nominal Value) Total amounting to RMl,495,121,200 Sene 1 Sene 2 Sene 3 Sene 4 Sene 5 Sene 6 Sene 7 Sene 8 Sene 9 Sene 10 Sene 11 Sene 12 74,476,839 74,368,320 74,278, ,766, ,650, ,550, ,005, ,907, ,814, ,740, ,664, ,897,075 Total amounting to RM2,852,877,500 Serle 1 Serle 2 Serle 3 Serle 4 Serle 5 Serle 6 Serle 7 Serle 8 Serle 9 Serle 10 Serle 11 Serle 12 93,300,000 98,625, ,275, ,167, ,920, ,765, ,500, ,075, ,600, ,550, ,000, ,100,000 Serie I n rn IV V VI vn vrn IX X XI XII Year L

4 2,5002,5002,5002,5002,5002,5002,5002,5002,500 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD i. 650MW Perlis Power Plant Project Selling Price Instalment Schedule The payments of Al-Istisna' instalment shall be made on a semi-annual basis, the first to commence six months after the first release of Purchase Price: Period Settlement Date (Years) Total Nominal Value Sene V Sene VI Sene VII Serle VIII 119,370,000 19,542, ,41 6,41 6,41 6,41 6,41 6,41 6,41 6,41 6,41 6,412,500 6,412,500 6,412,500 6,412,500 6,412,500 6,412,500 6,412,500 6,412,500 6,412,500 6,412,500 6,412,500 6,41156,41 2,500 2, ,920, ,765, ,500, ,075,000 4

5 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650MW Perlis Power Plant Project Period Settlement Date -(~t Total Nominal Value Sene IX Sene X Serle XI Sene XU ,970, ,600,000 " 323,550, ,000, ,100,000 Sene Internal Rate of Returns Sene I Sene II Sene III Sene IV Sene V Sene VI Sene VII Sene VIII Sene IX Sene X Sene XI Sene XII 6.30% 6.50% 7.15% 7.55% 7.80% 8.10% 8.50% 8.75% 8.90% 9.10% 9.20% 9.40% 5

6 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650M W Perlis Power Plant Project The Al-Istisna' instalments shall be evidenced by the issuance of Al-Istisna' Bonds totaling RM2,852,877,500 which represents the Issuer's unconditional obligation to settle the Al-Istisna' instalments in the following manner: 1 Each Al-Istisna' Bond shall mature and be payable by the Issuer at the Al-Istisna' Instalment Payment Date. 2. Eac of the Al-Istisna' Bonds shall have a Face Value equivalent to the Al-Istisna' Instalment. 3 Each of the Al-Istisna' Bond are non detachable. Redemption Global Form and Denomination of Bonds Payment to non-residents for redemption of Bonds should be in Ringgit and credited to the respective non-resident's Special External Account. The Al-Istisna' Bonds will be represented by a Global Certificate to be deposited with Bank Negara and shall be in registered foffil and will be prescribed under the Scripless Securities Trading System ("SSTS") maintained by Bank Negara Malaysia. The Bonds will be in such denomination as follows: 6

7 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650M W Perlis Power Plant Project Note Each ltpcl Bonds shall be supported by several 1TPC2 Bonds as follows: Serie I Serie II Serie III Serie IV Serie V Serie VI Serie VII Serie VIII Seric IX Serie X Serie XI Serie XII ITPC2 Bonds ITPC2 Bonds ITPC2 Bonds ITPC2 Bonds ITPC2 Bonds ITPC2 Bonds ITPC2 Bonds ITPC2 Bonds ITPC2 Bonds ITPC2 Bonds ITPC2 Bonds ITPC2 Bonds 2. The above TTPC2 Bonds provide the interim instalments for the following series.. Serie I Serie II Serie III Serie IV Serie V Serie VI Serie VII Serie VIII Seric IX Serie X Serie Xl Serie XII 6.10% p.a. on the nominal value 6.30% p.a. on the nominal value 6.95% p.a. on the nominal value 7.35% p.a. on the nominal value 7.60% p.a. on the nominal value 7.90% p.a. on the nominal value 8.30% p.a. on the nominal value 8.55% p.a. on the nominal value 8.70% p.a. on the nominal value 8.90% p.a. on the nominal value 9.00% p.a. on the nominal value 9.20% p.a. on the nominal value Purpose The proceeds of the AI-Istisna' Serial Bonds will be utilized by TTPC to part finance the Project cost including: a) Procurement and commissioning cost of the CCGT; b) Land payments and other construction related costs, pre-operational expenditures, development costs, import duties and sales taxes; c) Fees and expenses in relation to the AI-Istisna' Bonds issuance; 7

8 TEKNOLOGI TENAGA PERLIS CONSORTIUM 650MW Perlis Power SDN BHD Plant Pro.ecf d) Repayment of any bridging facilities obtained to finance pre-development and pre-operational expenditures; e) Repayment of any bridging facility; and f) Redemption of Secondary Bonds due and payable during the Project construction period. Mode of Is sue Non-tender private placement without prospectus. The AI-Istisna' Serial Bonds shall be issued in one lump sum in bearer form and constituted by a trust deed to be executed by the Issuer and the Trustee acting for the bondholders, and in accordance with the "Code of Conduct and Market Practices for the Malaysian Bond Market" prepared by the Institut Peniaga Bon Malaysia and approved by Bank Negara Malaysia ("BNM"). The Al-Istisna' Serial Bonds are to be prescribed under the Scripless Securities Trading System ("SSTS") maintained by, and deposited with BNM. Central Agent Depository and Paying: BNM Availability Period Security Upon completion of Facility documentation and compliance of all relevant conditions to the satisfaction of the Arrangers and Agent, the Al-Istisna' Bonds shall be issued in one lump sum one (1) month from the date of the Facility Agreement. The security of the Al-Istisna' Serial Bonds shall include but not limited to the following :- a) First legal charge over the Project land. Pending issuance of the Title, an assi~ent of the Sale and Purchase Agreement dated 11th September 2000 between Yayasan Islam Perlis and TrPC and such other undertaking( s) as deemed necessary; 8

9 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650MW Perlis Power Plant Project b) Debenture incorporating fixed and floating charges on all assets, both present and future belonging to the Issuer; c) Assignment by way of charge, of all Project proceeds from the sale of available generating capacity, and to the extent despatched, the electrical energy generated by the Plant and delivered to TNB, and all other income to be deposited into Designated Accounts, over all permitted investments out of such accounts including monies due and payable to TTPC; d) Assignment of all benefits and contractual rights of the Issuer under the Project Agreements including rights to revenue; e) Assignment of the necessary Perfonnance Bond and Insurances (including coverage on force majeure) provided for the Project; f) Step-in rights to cure defaults amongst the Project counter parties; g) An irrevocable Power of Attorney to deal with all rights, interest and title of the Issuer under the Project Agreements; and h) Any further security deemed necessary by the Arranger upon advice from its Legal Counsel and consultation with the Issuer. Project Agreements shall include (but not limited to) the PP A, Shareholders' Agreement, Engineering Procurement and Commissioning (EPC) Contract, Gas Supply Agreement, Alternative Fuel Supply Agreement, Operation and Maintenance Agreement and Sale and Purchase Agreement for Land. The above security may be shared pari passu by the Bondholders with the lenders in relation to the Permitted Borrowings. <)

10 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD,i 650M W Perlis Power Plant Project Permitted Borrowings is defmed as the Letter of Credit ("LC") to TNB of RM45.0 Million for securing liquidated damages (if due) under the PPA (such LC cease to be valid following completion of the Project) and LC/Bank Guarantee ("BG") to PETRONAS of up to RM40.0 million for securing gas supply and any other indebtedness, the aggregate amount of which shall not exceed RM20.0 million (Pre-Commercial Operations Date) and RMIO.O million (post Commercial Operations Date) except any advances made to the Issuer by the Directors of shareholders of the Issuer which are subordinated. Due Diligence a) A review of the correctness of the mathematical bases of the financial model used to prepare the base case financial analysis will be undertaken by the appointed Independent Reporting Accountant; b) A review of the technical feasibility of the input parameters of the base case financial analysis will be undertaken by the appointed Independent Engineering Consultant; c) A legal review of all the Project Documents will be undertaken by the appointed Legal CounseVsolicitor; d) A review of insurances to be undertaken by the appointed Independent Insurance Adviser. Designated Accounts The Issuer is required to open and maintain the following designated accounts with a Bank to be appointed by the Agent as follows: a) Disbursement / Project Account; b) Finance Service Reserve Account; and c) Operating Account 10

11 The Disbursement / Project Account and Finance Service Reserve Account shall be operated by the Trustee/Agent as the joint signatories of the account. Upon enforcement of the security, the subscribers / fmanciers shall have priority in respect of the amount outstanding to the credit all the Designated Accounts above followed by other creditors of TTPC, if any. Disbursement / Project Account TTPC will open a Disbursement / Project Account for the pmpose of remitting and/or depositing the following proceeds; a) Drawdown proceeds under the AI- Istisna ' Serial Bonds Facility; b) Amount received pursuant to the issue of any ordinary shares, preference shares and all other fonns of equity; c) Proceeds of insurance claims in respect of insurances taken for construction; and d) All compensation to be paid by any issuing party in respect of or pursuant to any performance bond (except under the Operation and Maintenance Agreement) or by way of damages. Amounts available in the Disbursement / Project Account shall only be utilized for the following purposes: a) Procurement and commissioning cost of the CCGT; b) Land payments and other construction related costs, pre-operational expenditure, development costs, import duties and sales taxes; c) Expenses relating to the financing of the Project including fees due to the various parties under the Al- Istisna' Serial Bonds issuance and all other incidental costs in respect of the Project fmancing; 11

12 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650M W Perlis Power Plant Project d) Required finance service prior to Commercial Operations Date (as defined) in the PP A of the Plant, that is redemption of the relevant Secondary Bonds that will become due and payable during the Project construction period; and e) Upon commencement of commercial operations, outstanding balance in the account, if any, shall be transferred to the Operating Account. Drawing from the Disbursement / Project Account may be made by the Issuer in accordance with the following principal provisions: a) Against certificates issued under the EPC contract certified by the Independent Engineer and/or other documentary evidence acceptable to the Agent, confirming amounts to be withdrawn from the Account; b) In accordance with a utilization schedule to be agreed upon prior to the Project Financial Close; and c) Seven (7) business days' written notice to the Agent. Finance Service Reserve Account ("FSRA " The Issuer shall set up a FSRA. This account shall be built up progressively starting from Project Commercial Operation Date until the balance is equivalent to 50% of the Projected semi-annual [fiance service for the relevant period, at least six months prior to the respective Project finance service date. In the event that the balance held in the FSRA is less than/exceeds the equivalent of 50% of projected finance service, the shortfall/excess shall be increased from/released to the Operating Account, as the case may be. 12

13 The Issuer may only withdraw sums from the FSRA for the following payment: a) Redemption of Secondary Bonds under the AI-Istisna' Serial Bonds Facility; b) Redemption of Primary Bonds under the Al-Istisna Serial Bonds Facility; and c) To transfer sums back to the Operating Account should the credit balance in the FSRA exceed the Required Amount. The Issuer may only make payments in connection with items (a) and (b) if at the same time the relevant payment is due, the Issuer has insufficient funds to make full payment from the Operating Account. Operating Account Revenues from sale of available generating capacity of the Plant, and to the extent, despatched, the electrical energy sold and delivered by the Plant to TNB, all other income received by the Company, proceeds of insurance claims in respect of insurances taken and maintained during the operation and maintenance period of the Plant and compensation to be paid by any issuing party in respect of pursuant to any performance bond or by way of damages during such operation and maintenance period shall be remitted to the Operating Account. The Operating Account shall be operated by the Issuer. The Operating Account shall be utilized for the following purposes: a) b) c) Transfer to FSRA; Fixed and variable operating expenses including fuel expenses, taxes and other payments to be made by the Issuer under the relevant Project Agreements; Redemption of Primary and Secondary Bonds under the Al-Istisna' Serial Bonds Facility which are due and payable during the relevant period; 13

14 TEKNOLOGI TENAGA PERLIS CONSO~tTIUM SDN BHD 650M W Perlis Power Plant Project d) Payment of routine and recurring capital expenditures in connection with the Plant or capital expenditure arising out of the carrying on of the authorized business which are approved by the bondholders; and e) Dividends and any other payments to shareholders. Permitted Investments The Issuer shall be pennitted from time to time to utilize funds held in the Designated Accounts to make Pennitted Investments or to make other investments subject to the consent of the Trustee, provided that such funds utilized for Pennitted Investments shall be remitted to the Designated Accounts in a timely manner to meet any payment obligations of the Issuer when due and payable. The Pennitted Investments shall have an earlier maturity date by at least two (2) weeks prior to the date when monies will be needed for Project payments. Such pennitted Investments are to be held and not traded. Permitted Investments mean : a) Mudharabah Deposits with any licensed institutions; financial b) Islamic acceptance bills, bankers acceptance or promissory notes issued by licensed financial institutions with a rating of not less than AA (double A); c) Marketable Islamic securities which are Government guaranteed; d) Marketable Islamic securities which are guaranteed by licensed financial institutions with long term rating of AA and above, and those issued by corporations with long term rating of AAA or AA if such corporations are controlled by the Government; and e) Islamic Bonds, treasury bills, debt instruments or securities issued by the Government or Khazanah Nasional Berhad. 14

15 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650MW Per/is PoWE~r Plant Project Principal Conditions Pre-Disbursement Including but are not limited, to the following: a) No event of default has occurred or is continuing or will occur under any of the Project Agreements as a result of issuance of the AI-Istisna' Serial Bonds; b) Certified true copy of the Board of Directors Resolution of TTPC authorizing the acceptance of the AI-Istisna' Facility in the fonn of the Al-Istisna' Serial Bond and the appointment of authorized signatories to accept and operate the Finance Facility and to execute the relevant documents relating to the Finance Facility; c) All Project Documents other than the Gas Supply Agreement, Financing and security documents, being in form and content satisfactory to the subscribers/financiers and in full force and effect, all conditions precedent thereto having been satisfied, all security required by this term sheet having created and registered and all associated notices, acknowledgements, registrations, filing etc. having been made; Project Documents shall include the Project Agreements and any other agreements entered into or to be entered into by TTPC for the purposes or in connection with the Project and shall include all licenses, permits issued in connection with the Project. d) Evidence satisfactory to the Agent confirming that the equity contribution in the form of paid-up capital and / or shareholders advances into the company is at least RM370.7 million together with evidence that such funds (whatever amounts that may be) have already been applied toward Project costs; e) TTPC shall have furnished the Agent with a certified true copy of its Memorandum and Articles of association together with Forms 24 and 49. ls

16 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650MW PerU! Power Plant Project f) Duly executed Security Documents and evidence of all appropriate filings and registrations with respect thereto and that the security constituted by the Security Documents shall have been validly created and perfected; g) Of all consents, acknowledgements or endorsements in relation to the Security interest granted over the Designated Accounts, the Project Agreements, Performance Bonds and Insurance Policies; h) All documents evidencing the establishment of the Designated Accounts; i) Satisfactory legal opinion from the fmanciers' legal counsel as to the validity and enforceability of the Financing Documents, and the Issuer's legal counsel as to the validity and enforceability of the Project Documents; j) k) 1) m) n'pc has certified to the Agent that there is no outstanding and unpaid debt apart from the Al-Istisna' Facility and bridging facility (if any) relating to the Project; Evidence or conflrtnation from TNB that all conditions precedent of the PP A have been met and the PP A is rendered unconditional; All necessary corporate and other required approvals and authorization and consents shall have been secured with respect to the Finance Facility; and A minimum rating of AA3 from the Rating Agency Malaysia Berhad The above conditions precedent are not exhaustive and may be subject to other conditions precedent imposed by the authorities and / or advised by the Solicitors to the documentation. So far as provided by law, any of the abovementioned Pre-Disbursement Conditions may be waived by the Primary Subscribers. 16

17 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650MW Perlis Power Plant Project Conditions Utilisation Precedent to All a) All conditions precedent to first utilization being still in effect; and b) No event of default has occurred or will occur as a result of the drawdown. Financial Covenants a) TTPC shall maintain a Debt to Equity Ratio equal to or less than 80:20 at all times; b) Debt is defmed as the aggregate of the amount outstanding arising from all borrowings obtained including the aggregate of all monies whether principal and financing charges payable under the AI-Istisna' Facility (other than inter-company unsecured and subordinated borrowings or advances) and all actual or contingent liabilities of the Issuer (excluding trade lines); c) Equity is defmed as paid-up capital, shares premium, shareholders' advances that are subordinated to the Al-lstisna' Facility in principal and interest payments, loan stocks that are subordinated to the Al-lstisna' facility in principal and interest payments and retained earnings; d) TTPC shall maintain a minimum Annual Finance Service Cover Ratio ("FSCR ") of 1.4 times commencing from the third (3rd) year of the date of first issue; and e) Annual Finance Service Cover Ratio is defmed as the ratio of Available Cashflow to the sum of the next 6 months principal, profit/interest payments and other borrowing costs paid, on each anniversary of the commencement of commercial operations, duly audited. Available Cashflow In any annual period, the swn of : a) All proceeds received by TTPC under the PP A or from any other purchaser of electricity approved by the bondholders; b) All other amounts received by TTPC under any other Project Agreements; 17

18 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD : 650MW Perl;s Power Plant Project c) All distributions, returns and realized gains received by TTPC on Permitted Investments; d) Insurance proceeds received by TTPC during such period; e) All amounts received by TTPC in respect of the sale, transfer, loan or other disposal of part of TTPC's undertaking, assets, rights and revenues pennitted by the bondholders; f) All amounts received by TTPC in respect of liquidated damages under any Project Agreements and any other damages received by TTPC; And g) The sum of all outstanding balances of the Designated Accounts including the Maintenance Reserve Account at the end of the previous period; Less a) The aggregate amount of fuel, operation, maintenance and repair expenses paid; b) Capital expenditure incurred (unless funded by drawdowns under the AI-Istisna' Serial Bonds and contributions from shareholders, whether in the form of equity, advances or shareholders' loans); and c) Taxes paid in respect of the Project and the Cess fund or such other similar contribution required to be paid by TTPC to the Government. to be duly audited by TTPC's accountants. Intentionally left blank 18

19 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650MW PerU! Power Plant Project Covenants Positive So long as any commitments under the Al-Istisna' Serial Bonds Facility remains outstanding, TTPC shall :- a) Use all reasonable endeavors to ensure that the Plant is designed, constructed, manufactured, tested, commissioned, completed, operated and maintained in accordance with Prudent Utility Practices, with sound commercial and financial standards and practices, and in accordance with the Project Agreements; b) Comply with all provisions of the Project Agreements and Financing documents; c) d) e) Save as otherwise expressly contemplated in the Financing documents, not amend, vary or replace any Project Agreements without the approval of the subscribers / fmanciers; Take out and maintain the necessary insurance policies (during the periods in which such policies are relevant) and notify of any event which will or may give rise to any claim or right of action under the insurances; Undertake to preserve and keep in force and effect all licenses, pernrits, approvals and rights necessary for the conduct of its business; f) Subordinate any shareholders' advances or loans to the obligations arising from the Al-Istisna' Serial Bonds and that no repayment and/or prepayment of such advances (other than interest payable in respect of the subordinated advances or loans) shall be made so long as the Al-Istisna' Bonds remain owing PROVIDED HOWEVER notwithstanding the aforesaid, the FSRA and the Debt equity ratios required to be observed are maintained prior to and after the repayment and/or prepayment of such advances, such repayment and/or prepayment may be made to the shareholders; lq

20 g) Subordinate repayment of preference shares to the obligations arising from the AI-Istisna' Serial Bonds and that no repayment and/or redemption of such preference shares shall be made so long as of Al- Istisna' Bonds remain owing PROVIDED HOWEVER notwithstanding the aforesaid, the FSRA and the Debt equity ratios required to be observed are maintained prior to and after the repayment and/or redemption of such preference shares, such repayment and/or redemption may be made to the shareholders; h) Infoml the Agent/Trustee in writing whenever it declares, distributes or pays any dividends or make a bonus issue or any other capital distributions for any of its fmancial years provided that no declaration, distribution or payment of any dividend or bonus issue shall be made if an Event of Default or Potential Event of Default under the Financing document has occurred; Take such steps as may have been notified by the Agent following the occurrence of an Event of Default or Potential Event of Default to remedy or mitigate the effect of that Event of Default or Potential Event of Default or any other step as the Agent may reasonably request in the circumstances; j) Deliver to the Agent within 30 days of the end of each calendar month a copy of the progress report during the construction period describing the progress of construction of the Plant and other relevant facilities; k) Deliver to the Agent within 30 days of the end of each calendar month, copies of all certificates of payment issued by the Issuer under EPC Contract as soon as practicable after receipt thereof and provide to the Agent promptly on request by the Agent all such other statements, certificates, documents or information relating to the EPC Contract or the carrying out of the work as defmed in the EPC Contract as the Agent may from time to time reasonably require; 20

21 TEKNOLOGI TENAGA PERLIS CONSORTIUM 650M W Perlis Power SDN BHD Plant Project 1) Permit the Agent or any representative nominated by the Agent, upon reasonable notice and at reasonable times, until the date of Project completion, to carry out an inspection of the Plant accompanied by the Independent Engineer and at such occasions of Inspection, the Issuer shall provide full co-operation to the Agent or its nominated representative and the Independent Engineer; m) Open and maintain each of the required Designated Accounts and pay all amounts into such accounts, and make all payments from such accounts only as required and permitted under the Financing Documents; n) Promptly inform the Agent of any dispute between the Issuer and any state or federal agency of Malaysia under or in any relation to the Project Agreements, any dispute between the Issuer and any other financing party or any Project counter party, and any other dispute (being in the case of a dispute arising in the course of construction operations, a major dispute) under or in relation to any of the Project Agreements threatening the normal business operations of the Issuer; 0) Pursuant to the PP A, issue all required invoices and/or bills promptly to TNB and will use all reasonable endeavours to collect and get in all moneys becoming due to TTPC; p) Exercise all its rights under the Project Agreements so as to procure that contractors and sub-contractors appointed in connection with the construction or operation of the Power Station are properly skilled, qualified and experienced to perform the functions that they are appointed to perform; q) Use its best endeavors to ensure that the Project Commercial Operations Date shall not occur later than 31 st March 2003 as contemplated in the PP A (or amended) or that the Project completion date shall not occur later than the date falling 22 months after the Notice to Proceed is issued under EPC Contract; 21

22 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD,, 650M W Perlis Power Plant Project r) Ensure that the Agent shall be notified, as soon as reasonably practicable, of any forthcoming tests on completion (as contemplated in the EPC Contract); ensure that the Agent is provided with all relevant information relating to the design and procedures used or to be used for the tests on completion and results of the tests; and if the Independent Engineer disagrees with the result of a test on completion, the Independent Engineer shall be given an opportunity to consult TTPC on the result of that test of completion. s) Maintain an accounting system and keep adequate records in compliance with applicable statutory requirements and in accordance with generally accepted accounting principles in Malaysia; t) Deliver to the Agent within 90 days of the end of each [mancial year, and within 60 days of each half year period its financial statements for that period which shall also contained detailed calculation of the required financial ratios, together with certificate by two of its directors, to the effect that such financial statements present a true and fair view; u) v) w) Punctually pay all of its debts within any specified grace period; Establish and maintain a Maintenance Reserve Account for up to RMIO.O million to fund maintenance expenses of the Plant for repair and replacement throughout the term of the PPA; and Carryon and conduct its affairs and business with due diligence and efficiency and in accordance with sound fmancial and commercial standards and practices. The above positive covenants are not exhaustive and may be subject to other covenants imposed by the authorities and/or advised by the Solicitors to the documentation. 22

23 TEKN LOGI TENAGA PERLIS CONSORTIUM SDN BHD 650MW Perl;s Power Plant Pro'ect Covenants.. Negative '$e Issuer shall not without the prior written consent of the rrtajority bondholders; a) Create of pennit to subsist any other security interest; b} Reduce its authorized and issued paid-up capital and Register cj Surrender, transfer, assign, relinquish or otherwise dispose any of its rights and interest under the Project Agreements and Financing Documents; d) Make or pennit to exist loans or advances to any of its shareholders or directors; e) Incur, assume or permit to exist any indebtedness other than the indebtedness under the AI- Istisna ' Facility, Letter of Credit ("LC") to TNB of RM45.0 million for securing liquidated damages (if due) under the PPA [such LC cease to be valid following completion of the Project] and LC/Bank Guarantee ("BG") to PETRONAS of up to RM40.0 million for securing gas supply and any other indebtedness, the aggregate amount of which shall not exceed RM20.0 million (Pre-Commercial Operations Date) and RMIO.O million (Post Commercial Operations Date) except any advances made to the Issuer by the directors or shareholders of the Issuer which are subordinated; t) Amend any provisions of its Memorandum or Articles of Association, which may have a material adverse effect on the Issuer's ability to meet its obligations under the Al-Istisna' Serial Bonds; g) h~ Carry on any business other than the authorized business that is the ownership, operation and maintenance of the Plant in accordance with the exercise of its rights and the performance of its obligations under the Project Agreements; Declare or payout any dividend on share capital including preference shares and/or interest on subordinated advances/loan stocks: 23

24 TEKNPLOGI TENAGA PERLIS CONSORTIUM SDN BHD! 650MW Perlis Power Plant Pro ect Before the Project completion date; If the FSCR is less than 1.4 times or would be if recalculated immediately after the payment of any dividend or interest or any such distribution; iii. If the balance standing to the credit of the FSRA after the payment or distribution is less than the required fmance service (principal and profit) over the subsequent six (6) month period; iv. If in the reasonable opinion of the Agent, any such declaration of payment would have a material adverse effect. i) Make or incur any other major capital expenditure except as contemplated under the Project Agreements and other than routine and recurring capital expenditures in connection with the Plant or capital expenditure arising out of the carrying on of the authorized business which are approved by the bondholders; j~ Any other negative covenants as may be imposed by the authorities and/or advised by the Solicitors to the documentation. Other Conditions a) The operation of the AI-Istisna' Serial Bonds Facility shall at all times be governed by guidelines issued and to be issued from time to time by the relevant authorities having jurisdiction over matters pertaining to such instrument; bb The Arranger and Primary Subscribers reserves the right to amend, add, vary, delete or selectively enforce any terms and conditions governing the availability of the AI-Istisna' Serial Bonds prior to the issuance of the Bonds, subject to due diligence and material adverse change; 24

25 TEKNpLOGI TENAGA PERLIS CONSORTIUM SDN BHD I 650M W Perlis Power Plant Project c~ From the date of provision of a formal offer by the Arranger until the date of execution of the documentation, the Arranger retains the right to withdraw and/or terminate the offer if there occur any event or circumstance which, in the opinion of the Arranger will materially affect both the international and domestic money, capital or syndicated loan markets, the Issuer and its affiliated companies' business activities, and/or the social, political, financial and economic situation in Malaysia. Events of Default 11he following shall become an automatic Event of Default:- a) The Issuer fails to pay, when due, any sum payable by it in accordance with the terms of the AI-Istisna' Serial Bonds Facility; 1jhe Bondholders shall have the right to declare Event of qefault if one or more of the following events should occur:- a) The Issuer fails to progressively build up the FSRA as scheduled and the Agent deems that such failure will have a material adverse effect on the Issuer's ability to satisfy the immediate scheduled redemption amount; bd The Company or any Project counter party fails in any material respect to observe or perform any of their respective obligations under the Financing and Project Documents and which is capable of being remedied and is not remedied to the satisfaction of the Trustee/Agent within the time frame stipulated. c) Termination of any Project or Financing Documents or TNB or PETRONAS gives a termination notice in accordance with the PP A or the Gas Supply Agreement and such notice is not withdrawn within thirty (30) days; ~ Breach of any covenants in the Financing Documents; 25

26 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650M W Perlis Power Plant Project e) The making of any representation and warranty which is incorrect in any material respect; f) Cessation or change in the authorised business; g) Termination of any licenses, permits and approvals that may have a material adverse effect on the ability of the Issuer to repay its obligations; h) Any present or future security on or over the assets of the Issuer becomes enforceable; i) Any insolvency, administrative or winding up action being taken against the Issuer; j) A scheme of arrangement under Section 176 of the Companies Act 1965 has been instituted against the Issuer; k) A receiver has been appointed over the whole or a substantial part of the assets of the Issuer; 1) Usual cross default clauses for issues of this nature; m) Renegotiation of the PP A due to an industry restructuring which new tem1s and conditions have a material adverse effect, as deemed by the Trustee / Agent, on the ability of the Issuer to pay the sums payable under the Bonds Facility; n) Other events as may be advised by the Solicitors of the Facility. Representation & Warranties Representations and warranties typical of such issues including but not limited to the following:- a) All necessary actions, authorizations and consents required by that date under the Financing Documents and Project Documents have been taken, fulfilled and obtained and remain in full force and effect; 26

27 b) The Financing Documents and Project Documents create valid and binding obligations which are enforceable on and against TTPC and in respect of the Project Documents enforceable against each of the parties thereto; c) d) e) t) There has been no material adverse change in the financial or operations of the Company since 31 st December 2000; All information furnished in connection with the Company, the Project Documents to the best of the Company's knowledge and belief, do not contain any untrue statement or omit to state any fact the omission of which makes any statement made therein misleading, and the Company is not aware of any material facts or circumstances that have not been disclosed to the Arranger which might, if disclosed, adversely affect the decision of a person considering whether or not to provide finance to the Company; The Company has fully disclosed in writing to the Arrangers all facts relating to the Company, the Project Documents which the Company knows or should reasonably know and which are material for disclosure to the Arranger in the context of AI-Istisna' Facility; and Other representation and warranties as may be advised by the Solicitors of the Facility. Other Expenses All costs, charges and expenses including Syariah adviser's fee, trustee fee, legal and professional fees, stamp duties, penalties, BNM transaction charges, Securities Commission processing fee and other incidental expenses are for the account of the Issuer, even if the Bonds are subsequently aborted for any reason whatsoever. 27

28 Selling Restriction Compensation Purchases or cancellation Redemption Clear Market Documentation The Al- Istisna' Bonds may only be offered, sold, transferred or otherwise disposed directly or indirectly to a person falling within one of the categories specified in Section 4(6) of the Companies Act 1965 as amended from time to time and to whom an offer or invitation to purchase the Al-Istisna' Bonds would constitute an excluded offer or excluded invitation as defined in the Securities Commission Act ("SCA ") 1993, as amended from time to time and would fall within Schedule 4 or 5 of the SCA. In the event of overdue payments, TTPC shall pay to the Bondholders compensation on such overdue amounts at the rate and manner prescribed by BNM's Syariah Council, i.e. the Majlis Penasihat Syariah Kebangsaan and Takaful (or such other Syariah Council approved by BNM ) and duly endorsed by BNM, and governed by guidelines issued and to be issued from time to time by the SC. TTPC may at any time purchase the Bonds in the open market at any price or by private treaty. The Bonds purchased may be cancelled or resold. Unless previously redeemed or purchased and cancelled, the Bonds shall be redeemed at 100% of the nominal value. From the date of provision of a formal offer by the Arranger to the date of the execution of the documentation, the Issuer shall ensure that no other borrowings, debt instruments or securities issued and/or guaranteed by the Issuer or any of its affiliates are mandated, syndicated or privately placed which might, in the opinion of the Arranger, has the effect of prejudicing the successful completion of this transaction. With the exception of the securities contemplated to be issued under the Preference Shares Subscription Agreement. The Al-Istisna' Facility shall be evidenced by:- a) Facility Agreement; b) Design Purchase Agreement; c) Novation Agreement; d) Agency and Collateral Agreement; 28

29 TEKNOLOGI TENAGA PERLIS CONSORTIUM SDN BHD 650M W Per"s Power Plant Project e) Depository and Paying Agency Agreement; t) Agency Agreement; g) Trust Deeds; h) Security Documents; i) j) Primary and Secondary Bonds; Other relevant documentation as advised by the Facility Solicitors. The Trust Deed will contain temis customary for a facility of this nature, including but not limited to representations and warranties, events of default, material adverse change, cross default clauses, positive, negative and financial covenants, and provisions for making available periodic information. Listing Taxation Governing Laws The Bonds will not be listed. All payments by TTPC shall be made without withholding or deductions for or on account of any present or future tax, duty or charge of whatsoever nature imposed or levied by or on behalf of Malaysia or any other applicable jurisdiction, or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law. Laws of Malaysia. 29