PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL

Transcription

1 PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL

2 Principal Terms and Conditions of the Proposal (Information required under paragraph 10 of the Revised Guidelines) BACKGROUND INFORMATION 1(A). Issuer - Name Merbok Hilir Berhad ( MHB ) - Address Unit Menara PSCI No. 39, Jalan Sultan Ahmad Shah Pulau Pinang - Business Registration No K - Date/Place of Incorporation 25 October 1994 / Malaysia - Date of Listing (in the case of a public listed company) Unlisted - Status : resident/non-resident controlled company Non-resident controlled company : Bumiputera/non-Bumiputera controlled company Non-Bumiputera controlled company - Principal Activities The principal activity of the Issuer is an investment holding company. The principal activities of the subsidiaries are: a. Manufacturing and sale of Medium Density Fibreboard and Particle Board; b. Merchandised forest harvesting and manufacture and sales of wood chips; c. Trading of Medium Density Fibreboard; d. Manufacturing and sale of adhesives/ resin products; and e. Investment holding. - Board Directors The Board of Directors of MHB as at 10 October 2003 is as follows: Name Resident / Non- Resident I/C No /Passport No Dato Mohd Salleh Bin Yeop Abdul Rahman Resident Robert Kokshoorn Non-Resident BA (Dutch) Tengku Dato Abdul Hamid Thani Ibni Sultan Badlishah Resident

3 Anthony Richard Whitham Non-Resident E (Australian) Dominic Andrla Non-Resident (British) Maxwell Alexander Norris Non-Resident (British) - The shareholding structure of MHB as at 10 October 2003: Burwood Group Limited (BVI) (142874) 38,381,818 ordinary shares (51.18%) Kilang Bumi- Aluminium Sdn. Bhd. (126514U) 22,500,000 ordinary shares (30.0%) Bank Islam (L) Ltd. (LL 01151) 6,218,182 ordinary shares (8.29%) Wan Dayang Binti Wan Mahmud 4,500,000 ordinary shares (6.00%) Others (collectively) 3,400,000 ordinary shares (4.53%) MERBOK HILIR BERHAD Notes: Details on other shareholders are attached herewith as Attachment VI - Authorized, issued and paid up share capital of MHB as at 25 August 2003: Authorized Share Capital : Class of shares Authorised Capital Ordinary shares RM100,000, comprising 100,000,000 shares of RM1 each Issued and Paid Up Capital : Class of Shares Issued Shares Ordinary shares 75,000,000 shares of RM1 each Paid-Up Capital RM75,000,

4 PRINCIPAL TERMS AND CONDITIONS 2. Names of parties involved in the proposed transaction (where applicable) i. Principal Adviser(s)/Lead Arranger(s) Bank Islam Malaysia Berhad ( BIMB ). ii. Arranger(s) Not applicable iii. Valuers Not applicable iv. Solicitors Messrs Abu Talib, Shahrom & Zahari v. Financial Adviser Not applicable vi. Technical Adviser Not applicable vii. Guarantor Not applicable viii. Trustee PAB Trustee Berhad ix. Facility Agent BIMB x. Primary Subscriber(s) and Amount subscribed (where applicable) BBA Bonds Facility Primary Subscribers Nominal Amount Percentage of RM Million Subscription BIMB % 3

5 xi. Underwriter(s) and amount underwritten Not Applicable xii. Syariah Adviser (where applicable) Shariah Supervisory Council of BIMB xiii. Central Depository Bank Negara Malaysia ( BNM ) xiv. Paying Agent BNM xv. Reporting Accountant KPMG (AF:0758) xvi. Others Rating Agency: Malaysian Rating Corporation Berhad ( MARC ) 3. Principle (Conventional / Islamic) Islamic 4. Facility Description Under the BBA Bonds Facility, MHB will raise up to RM150.0 million for the purpose of refinancing its subsidiaries existing indebtedness for up to RM82.0 million, refinancing MHB s Bridging Financing Facility with BIMB for up to RM15.0 Million and the balance thereof shall be utilised to finance its working capital requirements. The BBA Bonds is divided into a Series of 3, 4, 5, 6 and 7-years maturity and is structured under the Shariah contract of Bai Bithaman Ajil. Under the Bai Bithaman Ajil contract, the Primary Subscriber shall first purchase from the Issuer certain assets ( Assets ) at an agreed Purchase Price. The Assets will subsequently be sold to the Issuer at the Selling Price, which comprises the Purchase Price and a profit margin. 5. Issue Size (RM) RM150.0 million in nominal value only represented by primary bonds. 4

6 6. Issue Price (RM) To be issued at par as follows: Series Total (RM million) Total Tenor of the facility/ issue The BBA Bonds will be issued at par on a Bought Deal basis with the following Series, Tenure and Amount: 8. Interest/Coupon/Profit or equivalent rate (%) The BBA Bonds profit shall accrue at the following profit rate and shall be represented by secondary bonds based on the nominal amount of the primary bonds from the date of issue with the last profit payment to be made on the relevant maturity dates: 9. Interest/Coupon/Profit Payment frequency Profit accruing on the BBA Bonds Facility shall be paid semi-annually in arrears from the date of issuance with the last profit payment to be made on the relevant maturity dates. 10. Interest/Coupon/Profit Payment basis Series Tenure (Years) Total (RM million) Total Series Tenure (Years) Total Profit (%) (RM million) Total Actual number of days elapsed over 365 days basis 5

7 11. Yield to Maturity (%) Series Tenure (Years) Total (RM million) YTM (%) Total Security/Collateral (if any) 1) Debenture creating a 1 st fixed and floating charge over MMDF present and future assets; 2) 1 st fixed charge over approximately acres comprising part of that piece of land currently held under issue document of title Geran No 11814, Lot 2998 situated in Mukim of Merbok, Kedah; 3) 1 st fixed charge over all that piece of land held under issue document of title HD(S) 1711/97, Lot 3964 and Geran 0251, Lot 3127 situated in Mukim of Teloi Kiri, Kuala Muda, Kedah; and 4) Charge and assignment over the Designated Accounts, as defined herein. Note: 1) With the exception of Security item (4), upon refinancing of MHB s subsidiaries existing financing facilities, the Existing Financiers who are the current debenture holder and chargee shall discharge the Security created thereunder pursuant to an irrevocable and unconditional letter of undertaking from each of the Existing Financiers to release their respective Security. 2) MMDF is 100% subsidiary of MHB. 13. Details on utilisation of proceeds The proceeds from the issuance of the BBA Bonds shall be utilized as follows: 1) To refinance MHB s subsidiaries existing bank financing facilities for up to RM82. 0 million as follows: MHB s Subsidiary Existing Financier Maximum Amount to Refinance (RM million) MMDF Affin Bank Berhad 30.9 MMDF Bumiputra Commerce Bank Berhad 22.4 MMDF Bank Islam Malaysia Berhad 11.4 TMDF Malayan Banking Berhad 17.3 Total

8 2) To refinance BIMB s Bridging Financing Facility to MHB for up to RM15.0 million; and 3) The balance thereof after deducting items (1) and (2) shall be utilized to finance MHB s working capital requirements. 14. Sinking fund (if any) Designated Accounts comprising Facility Service Reserve Account ( FSRA ) and Debt Service Reserve Account ( DSRA ) will be established and maintained as follows: FSRA A credit balance at least equivalent to the amount due for the forthcoming profit payment must be maintained at all times in the FSRA. The amount required shall be credited into FSRA immediately upon issuance of the BBA Bonds. DSRA The amount in the DSRA shall be utilised to redeem the profit and principal payments for the BBA Bonds. The build up of the DSRA shall commence as follows: Profit Payments: In respect of the profit payments, payment shall be built up monthly on a proportionate basis into the DSRA six (6) months prior to each forthcoming profit payment and on each due date, the profit payment proceeds accrued in the DSRA shall be utilized to fully settle the profit payment due; and Principal Payments: In respect of the principal payments, payment shall be built up twelve (12) months on a proportionate basis into the DSRA, commencing thirteen (13) months prior to each forthcoming principal payments due and on each due date, the principal payment proceeds accrued in the DSRA shall be utilized to fully settle the principal payment due. If the balance in the Designated Accounts falls below the minimum amount required to be maintained in the Designated Accounts, the Issuer shall deposit such sums into the Designated Accounts so as to comply with such minimum balance requirement within forty five (45) days. 15. Rating The indicative rating for the BBA Bonds Facility from Malaysian Rating Corporation Berhad ( MARC ) as at 16 September 2003 is A ID. 7

9 16. Form and Denomination The BBA Bonds will be non-interest bearing primary bonds in bearer form in the denomination of RM1.0 Million each or such other denominations as the Issuer and the Facility Agent may agree or as determined by BNM together with non-detachable secondary bonds. The primary and secondary bonds will be represented by Global Certificate to be deposited with BNM and will be traded under the Scripless Securities Trading System ( SSTS ) maintained by BNM. The BBA Bonds shall be traded through the Real Time Electronic Transfer of Funds and Securities System ( RENTAS ) and issued/ reported through the Fully Automated System for Tendering ( FAST ). 17. Mode of Issue The BBA Bonds will be issued at par via Bought Deal arrangement without prospectus. 18. Selling Restrictions The BBA Bonds may not be offered or sold directly or indirectly, nor may any document or other material in connection therewith be distributed in Malaysia other than to categories of persons specified under Schedules 2 and 5 or 3 and 5 of the Securities Commission Act 1993 of Malaysia (as amended), subject to any law, order, regulation or official directive of BNM, SC and/or any other regulatory authority from time to time. For the purchasers of the BBA Bonds Facility who are non-residents as defined under the Exchange Control Act 1953, any payment for the purchase of the BBA Bonds Facility must be made in foreign currency (other than a Restricted Currency) equivalent to the purchase price of the BBA Bonds Facility or in Ringgit Malaysia drawn from an External Account and/or Special External Account (as defined under the Exchange Control Act 1953). Payments to non-residents arising from the redemption of the BBA Bonds should be made in Ringgit Malaysia and credited to the respective non-residents Special External Account. 19. Listing Status Unlisted. 20. Minimum Level of Subscription (RM or %) BIMB will subscribe 100% of the total issuance. 21. Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained Not applicable. 8

10 22. Additional information for Islamic PDS Islamic Principle The BBA Bonds Facility is based on the Shariah contract of Bai Bithaman Ajil, which is a transaction involving the sale and purchase of assets on a deferred payment basis with pre-agreed payment period. Under this contract, the Primary Subscriber(s) shall first purchase from the Issuer certain assets ( Assets ) at an agreed Purchase Price. The Assets will subsequently be sold to the Issuer at the Selling Price, which comprises the Purchase Price and a profit margin. Identified assets Shares of MHB s wholly owned subsidiaries, Merbok MDF Sdn Bhd ( MMDF ), Arcadia Integrated Sdn Bhd ( AISB ) and Takeuchi MDF Sdn Bhd ( TMDF ) as follows: Series Underlying Asset Purchase Price (RM million) 1 5,000,000 ordinary shares of TMDF ,500,000 ordinary shares of MMDF ,500,000 ordinary shares of MMDF ,000,000 ordinary shares of TMDF ,000,000 ordinary shares of MMDF; ,000,000 ordinary shares of TMDF; and 3,000,000 ordinary shares of AISB. Total Purchase and selling price/rental (where applicable) The BBA Bonds will be issued at par based on the following Tenure, Purchase Price and Selling Price: Series Tenure (Years from Issue Date) Profit Rate (% p.a.) Purchase Price (RM) Selling Price (RM) ,000,000 34,680, ,000,000 42,490, ,000,000 44,625, ,000,000 36,850, ,000,000 38,912,500 Total 150,000, ,557,500 The Selling Price shall be evidenced by the issuance of the BBA Bonds, which represent the Issuer s unconditional obligation to settle the Selling Price in the following manner: a. For each Series, all primary bonds issued, which represents the nominal/principal portion of the Selling Price shall mature and be payable by the Issuer at the end of the tenure of the relevant Series of the BBA Bonds; and 9

11 b. For each Series, each of the primary bonds shall be supported by a number of secondary bonds of a certain value of six (6) monthly maturities commencing six (6) months after the issue date of the BBA Bonds representing the profit portion of the Selling Price. 23. Conditions Precedent Customary conditions precedent for transactions of similar nature, which shall include but not limited to the following: 1) Board Resolution of the Issuer authorizing the BBA Bonds Facility and the execution of all relevant documents thereto; 2) Satisfactory completion and execution of all legal and security documentation, including but not limited to the Asset Purchase Agreement, the Asset Sale Agreement, the Trust Deed and any other necessary documents (collectively known herewith as the Financing Agreements ), and duly endorsed as exempted under Stamp Duty Exemption (No. 23) Order 2000; 3) Letters of undertaking from MHB s Existing Financiers comprising the following: (i) (ii) To release the security upon receipt of the redemption sum; and To refund the redemption sum in the event the release of security cannot be effected for any reason whatsoever. 4) Documentary evidence acceptable to the Principal Adviser/ Lead Arranger certifying that the minimum security coverage of 1.50 times is met; 5) Satisfactory review of the Issuer s Certificate of Incorporation and Memorandum and Articles of Association; 6) No change of law or other government or regulatory bodies shall have occurred which shall make it impossible for the Issuer to issue the BBA Bonds Facility and to perform covenants and obligations required under or in accordance to the Financing Agreements; 7) The Lead Arranger shall have received satisfactory documentary evidence that the BBA Bonds Facility have obtained a minimum investment grade rating of A or its equivalent from the Rating Agency; 8) Evidence of the approval from the Securities Commission (the SC ) and/or other regulatory bodies in respect of the BBA Bonds Facility shall have been obtained; 9) Winding-up search conducted on the Issuer wherein the Official Receiver confirms that the Issuer is not wound up; 10) Confirmation from the Issuer that apart from the disclosed existing indebtedness there are no other bank borrowings; 11) Completion of the financial and legal due diligence carried out on the Issuer to the satisfaction of the Lead Arranger; 10

12 12) Confirmation from the Legal Counsel that all the conditions precedent pertaining to the issuance of the BBA Bonds Facility have been fulfilled; 13) Satisfactory legal opinion from the Legal Counsel for the Lead Arranger as to the validity and enforceability of all legal and security documentation; 14) The Designated Accounts have been established and notices of assignment and acknowledgement thereof have been received; 15) All other terms as may be stipulated by the Lead Arranger and/or the Legal Counsel. 24. Representations and Warranties Representations and warranties customary for the Issuer and such other representations and warranties as may be advised by the Legal Counsel for a facility of this nature including but not limited to the following continuous representations and warranties:- 1) The Issuer is a company duly incorporated and validly existing under the laws of Malaysia as a legal entity and has full power and authority to own their respective assets and to carry on their respective businesses; 2) That the Issuer has the power, authority and capacity to issue the BBA Bonds Facility, execute, deliver and perform the terms of the Financing Agreements, and the Issuer has taken all necessary corporate and other action to authorise the execution, delivery and performance of the Financing Agreements; 3) That the execution, delivery and performance of the Financing Agreements by the Issuer do not and will not violate the provisions of:- (i) (ii) Any law or regulation or any order or decree of any governmental authority, agency or court to which it is subject; or Its Memorandum and Articles of Association; 4) Except as permitted herein, that the execution, delivery and performance of the Financing Agreements by the Issuer do not and will not:- (i) (ii) Contravene the provisions of any other contract or undertaking or instrument to which the Issuer is a party or which is binding upon the Issuer or any of its respective assets; or Result in the creation or imposition of, or any obligation to create or impose, any mortgage, lien, pledge, charge or other security interest on any of its assets pursuant to the provisions of any other contract, undertaking or instrument; 11

13 5) That all consents, licences, approvals, authorisations, exemptions or other orders or actions required by the Issuer under the laws of Malaysia for or in connection with the issue of the BBA Bonds Facility and the execution, delivery and performance of the Financing Agreements have been obtained and are in force and all other actions will be taken by the Issuer to comply with all legal and other requirements necessary to ensure that the issue of the BBA Bonds Facility will not infringe any existing laws or the terms of any such consents, licences, approvals, authorisations, exemptions or orders; 6) No event has occurred which constitutes, or which with the giving of notice and/or the lapse of time and/or relevant determination would constitute a material breach of or default under any agreement to which the Issuer is a party or any of its assets is bound or affected, being a breach or default which either has or could have a material adverse effect on the business, assets or financial condition of the Issuer or materially and adversely affect the Issuer s ability to perform its obligations under the Financing Agreements; 7) The Financing Agreements is in full force and effect and constitute the valid, binding and enforceable obligations of the Issuer; 8) There is no litigation or arbitration that will materially and adversely affect the ability of the Issuer to perform its obligations under the Financing Agreements to which it is a party save as disclosed; 9) The financial statements and other information supplied are true and accurate in all material respects and not misleading except that, where the warranted information is a forecast, the warranty will be to the effect that the forecast has been made on the basis of assumptions which were reasonable at the time when they were made and after due inquiry; and 10) All other covenants as may be stipulated by the Lead Arranger and/or the Legal Counsel. 25. Events of Default The holders of the BBA Bonds shall have the right to declare an Event of Default if inter alia, one or more of the following events should occur: 1) The Issuer fails to pay, when due, any sum payable by it in accordance with the terms of the Facility; 2) The Issuer is unable to pay any of its debts, other than in respect of the Facility, as and when they become due and payable prior to their stated maturity; 3) The Issuer fails in any material respect to observe or perform any of its respective obligations under the relevant Financing Agreements and which is capable of being remedied and is not remedied to the satisfaction of the Trustee/Facility Agent within forty five (45) days and such failure has a material adverse effect; 4) Material adverse change in the condition (financial or otherwise) of the Issuer; 12

14 5) Any representation, warranty or statement which is made or provided for by the Issuer in any of the Issue Documents or which is contained in any other documents proves to be incorrect or misleading or if repeated at any time with reference to the facts and circumstances subsisting at such time would not be accurate or would be misleading; 6) Termination of any licenses, permits and approvals that may have a material adverse effect on the ability of the Issuer to repay its obligations and dues; 7) Any present or future security on or over the assets of the Issuer becomes enforceable; 8) Any insolvency, administrative or winding up action being taken against the Issuer; 9) Any provision in the Issue Documents becomes for any reason whatsoever, invalid, illegal, void or unenforceable which would prevent the Issuer from performing any of its obligations thereunder; 10) A scheme of arrangement under Section 176 of the Companies Act 1965 has been instituted against the Issuer; and 11) Such other clauses as may be advised by the Legal Counsel. 26. Principal terms and conditions for warrants (where applicable) Not applicable. 27. Other principal terms and conditions for the issue Positive Covenants : Covenants usual and customary to the Issuer, and such other covenants as may be advised by the Legal Counsel for a facility of such nature shall apply including but not limited to: 1) Perform all its obligations under the BBA Bonds; 2) Ensure continuous compliance with the SC and Bank Negara Malaysia ( BNM ) requirements and conditions for the issuance; 3) Maintain its corporate existence and its right to carry on operations; 4) Preserve and keep in force and effect all consents, licenses and rights necessary for the conduct of its business; 5) Obtain and promptly renew from time to time and comply with the terms and conditions of all consents and authorizations which may be required under any applicable law or regulation; 13

15 6) Prepare accounts in accordance with all relevant laws and accounting principles and practices generally accepted in Malaysia; 7) Provide semi-annual unaudited financial statements within ninety (90) days from the end of each six (6) months period and annual audited financial statements, within one-hundred and twenty (120) days from the end of each financial year; 8) Inform the Trustee of any material change in the directorship, senior management and substantial shareholders that may materially affect its business condition (financial or otherwise), or operating results; 9) Notify the Trustee of claims against the Issuer which would have a material adverse effect upon the ability of the Issuer to perform its obligations under the Financing Agreements, the Issuer will defend itself against such claims and will not settle such claims except with the prior consent of the Trustee, such consent not to be unreasonably withheld or delayed; 10) Take such steps as may have been notified by the Trustee following the occurrence of an Event of Default to remedy or mitigate the effect of the Event of Default or any other step as the Trustee may reasonably request; 11) File all relevant tax returns and pay all taxes promptly upon the same becoming due except to the extent that the taxes are being contested in good faith and by appropriate means and an adequate reserve has been set aside with respect thereto; and 12) All other covenants as may be stipulated by the Lead Arranger and/or the Legal Counsel. Negative Covenants : Covenants usual and customary for the Issuer, and such other covenants as may be advised by the Legal Counsel for a facility of such nature shall apply including but not limited to without the prior written consent of the Trustee:- 1) Carry out any business or activities other than those relating to the business or activities pursuant to the Issuer s Memorandum and Articles of Association; 2) Amend its Memorandum and Articles of Association, unless required in compliance with regulatory requirements; 14

16 3) Enter into any amalgamation, demerger, reconstruction or winding up of the Issuer, transfer or assign any or all of their rights in or title to or interest in the license(s) necessary for the operations of the Issuer; 4) Dissolve its affairs; 5) Reduce its authorised or issued and paid-up capital by reduction of capital or cancellation of capital or otherwise; 6) Incur any new indebtedness other than: a. Financing requirements in the ordinary course of business which shall be capped at an amount to be agreed upon between the Issuer and Lead Arranger; and b. Any advances or loans from its shareholders and/or related companies in the ordinary course of business, which shall be subordinated to the BBA Bonds. 7) Save as disclosed, enter into any other contracts, agreements or other arrangements or commitments, other than the Financing Agreements, except in the ordinary course of its business; 8) Make or grant any loan or advance or provide or extend any credit or accommodation or give any guarantee, indemnity or assurance against loss to or for the benefit of any person or act as surety or otherwise voluntarily assume any liability, whether actual or contingent except in the ordinary course of business; 9) Convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its business or assets whether now owned or hereafter acquired except at arm s length in the ordinary course of business; 10) Utilize the BBA Bonds for any purpose other than as stated in the term sheet; 11) Assign the Issuer s rights or transfer its obligations under the Financing Agreements; 12) Declare or pay dividends unless the DSCR is above 1.75 times prior to dividend distribution and subsequent to the dividend distribution, the DSCR does not fall below 1.50 times; and 15

17 13) All other covenants as may be stipulated by the Lead Arranger and/or the Legal Counsel. Financial Covenants : Commencing from 2004, MHB shall at all times during the subsistence of the BBA Bonds maintain the following: Debt Service Cover : Not less than 1.5 times Ratio ( DSCR ) Gearing Ratio : Not more than 1.75 times The calculation of DSCR shall be based on the following formula: DSCR = Group Net Available Cash Flow (a) Group Total Debt Service (b) Whereby: (a) : Opening Cash Balance + Operating Cash flow for the Year + Opening Debt Service Reserve Account (b) : Principal repayment amounts of Term Facilities and Bonds + Profit Payment on the Term Facilities and Profit element of Bonds The calculation of Gearing Ratio shall be based on the following formula: Gearing Ratio = Total Financing Facilities Shareholders funds The above financial ratios measured on each of the Issuer s Financial Year End date from 2004 shall be duly certified by an External Auditor and such certificate shall be delivered to the Security Agent and Trustee as soon as practicable but not later than 120 days after the date of each Financial Year End. Disbursements : Subject to the compliance of all conditions precedents, the proceeds from the BBA Bonds shall be remitted as follows: (i) (ii) Refinancing To be credited directly to the Existing Financiers for up to RM82.0 Million. Bridging Financing Facility To be credited directly to BIMB for up to RM15.0 Million. 16

18 (iii) Working capital The balance thereof after deducting items (i) and (ii) shall be credited directly to the Issuer s bank account as working capital. Permitted Investments : The Issuer may from time to time utilize the funds held in DSRA to make the Permitted Investments or to make other investments approved by the Trustee, provided that such Permitted Investments are charged to the Trustee and such funds utilized for such investments must be remitted back to the said account in a timely manner to meet any payment obligations of the Issuer when due and payable. Should Events of Default occur, the Issuer is not allowed to make Permitted Investment. The Permitted Investments must be Shariah compliant and denominated in Ringgit Malaysia. Permitted Investments mean the following: 1) Deposits in Islamic approved accounts and negotiable certificates of deposits issued by licensed financial institutions; 2) Islamic bonds, treasury bills or debt instruments issued or guaranteed by the Government of Malaysia; and 3) Islamic capital market instruments issued by licensed financial institutions subject to a minimum rating of A1 and P1 and/or other debt or capital market instruments of private entities subject to a minimum rating of AA3 and P1 or their equivalent rating. Default Cross Default : In the Event of Default, no further issuance may be made under the BBA Bonds and the whole of the principal sums outstanding together with all other sums payable shall become immediately due and payable and in which case, the Issuer will reimburse all parties for all losses and expenses incurred in consequence of the Event of Default and/or of the acceleration of the BBA Bonds, including those incurred in invoking the Event of Default, liquidating or employing deposits from third parties acquired to effect or to maintain the BBA Bonds or any part of it. The certification from the Facility Agent and/or the Trustee to the amount of such losses and expenses shall, in the absence of manifest error, be conclusive. : The BBA Bonds will contain a cross default clause relating to any indebtedness of the Issuer becoming due or capable of being declared due before its stated maturity, any guarantee of the Issuer not having default under, or committing a breach of, any instrument or agreement relating to any such indebtedness or guarantee or the security for any indebtedness becoming enforceable. 17

19 Clear Market Adverse Market Taxation Legal Fees, Stamp Duty and Other Expenses Governing Law Payment of Selling Price : Unless and otherwise consented to by the Lead Arranger, from the date of provision of a formal offer by the Lead Arranger to the Issuer until the Signing Date, the Issuer undertakes that no other commercial borrowing or guarantee facilities by or involving the Issuer shall be syndicated or arranged privately which in the opinion of the Lead Arranger, would have the effect of prejudicing the successful completion of this transaction. : From the date of provision of a formal offer by the Lead Arranger to the Issuer until the Signing Date, the Lead Arranger will retain the right to withdraw/terminate the offer if there occurs any event or circumstance which, in the opinion of the Lead Arranger will materially affect the international/domestic money, capital or syndicated loan markets, the Issuer s business activities or financial position. : All payments of principal and profit payment in respect of the BBA Bonds to be issued shall be made without withholdings or deductions for or on account of any present and future tax, duty or charge or whatsoever nature imposed or levied by or on behalf of the Government of Malaysia, or any authority thereof or therein having power to tax unless such deductions or withholding is required by law. : All reasonable expenses, including reasonable legal fees, stamp duty, out-of-pocket expenses and other costs reasonably incurred in arranging the BBA Bonds shall be for the account of the Issuer and on a full indemnity basis. For all expenses that exceed RM (Ringgit Malaysia two thousand) in each instance, BIMB shall seek the prior approval from the Issuer, where such approval shall not be unreasonably withheld or delayed. : Law of Malaysia and the jurisdiction of the Malaysian Courts. : The Selling Price shall be evidenced by the issuance of the BBA Bonds, which represent the Issuer s unconditional obligation to settle the Selling Price in the following manner: (i) For each Series, the Primary Bonds shall be issued representing the nominal/principal portion of the Selling Price which shall all mature and be payable by the Issuer at the end of the tenure of the relevant Series of the BBA Bonds; (ii) For each Series, each of the Primary Bonds shall be supported by a number of Secondary Bonds of a certain value of six (6) monthly maturities commencing six (6) months after the issue date of the BBA Bonds representing the profit portion of the Selling Price. 18

20 Transfer Final Redemption Value Status Trading Issue Date Purchase and Cancellation Currency Delivery and Depository Daycount Basis : Secondary Bonds are not detachable from the Primary Bonds and every transfer of the Primary Bonds shall be accompanied by a transfer of the Secondary Bonds attached thereto, unless previously redeemed, but the Secondary Bonds are to be traded together with the principal. : Unless previously redeemed, purchased and cancelled, the BBA Bonds shall be redeemed at face value at its maturity. : The BBA Bonds shall constitute direct and unconditional obligations of the Issuer ranking pari passu amongst themselves and pari passu with all other present and future secured obligations of the Issuer. : The BBA Bonds shall be tradable on the secondary market on a willing-buyer willing-seller basis under the scripless book-entry securities trading and funds transfer system known as Real Time Electronic Transfer of Funds and Securities operated and managed by Bank Negara Malaysia. Trading however, shall be confined to the categories of persons specified under Schedules 2 and 5 or 3 and 5 of the Securities Commission Act 1993 of Malaysia (as amended). : Subject to the satisfaction of all the Conditions Precedents, to be issued in one lump sum within six (6) months from the date of the SC s approval. : The Issuer may at any time purchase the BBA Bonds in the open market at any price or by private treaty. The BBA Bonds purchased will be cancelled and may not be resold or reissued. : Ringgit Malaysia ( RM ) : The global certificates in respect of the BBA Bonds shall be deposited with the Depository and a safe custody receipt shall be issued to the Bondholders. No physical delivery of the certificates will be permitted as long as the certificates remain with the Depository. : Actual number of days elapsed over 365 days basis. 19