1. BACKGROUND INFORMATION ON THE ISSUER. (i) Name : Temasek Ekslusif Sdn Bhd ( Issuer or TESB ). (ii) Address. (iv) Date and place of incorporation

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1 PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL 1. BACKGROUND INFORMATION ON THE ISSUER (i) Name : Temasek Ekslusif Sdn Bhd ( Issuer or TESB ). (ii) Address : Registered address Menara Gamuda, D-16-01, Block D PJ Trade Centre, No. 8, Jalan PJU 8/8A Bandar Damansara Perdana Petaling Jaya Selangor (iii) Business number registration Business address Level 9, Menara Gamuda, Block D PJ Trade Centre, No. 8, Jalan PJU 8/8A Bandar Damansara Perdana Petaling Jaya Selangor : W. (iv) Date and place of incorporation (v) Date of listing, where applicable (vi) Status on residence, i.e. whether it is a resident controlled company or a non-resident controlled company (vii) Principal activities (viii) Board of directors as at 30 June 2014 : 14 June 2013 / Malaysia. : Not applicable. : Resident controlled company. : The Issuer is principally engaged in property investment and development. : The board of directors of the Issuer as at 30 June 2014 are as follows: 1

2 Name Saw Wah Theng Chow Chee Wah Ngan Chee Meng Resident NRIC No. Status Malaysian Malaysian Malaysian (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders (x) Authorised, issued and paid-up capital as at 30 June 2014 : The shareholder and the shareholding structure of the Issuer as at 30 June 2014 are as follows: Name of Ordinary Shareholder No. of Ordinary Shares held (%) Gamuda Berhad 100, % : Authorised share capital of the Issuer as at 30 June 2014 RM400, comprising 400,000 ordinary shares of par value RM1.00 each Issued and paid-up share capital of the Issuer as at 30 June 2014 RM100, comprising 100,000 ordinary shares of par value RM1.00 each (xi) Disclosure of the following: : If the issuer or its board members have been convicted or charged with any offence under the securities laws, corporation laws or other laws involving fraud or dishonesty in a court of law, for the past five years prior to the date of None. 2

3 application; and If the issuer has been subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the date of application. None. 2. PRINCIPAL TERMS AND CONDITIONS (a) Name of parties involved in the proposal, where applicable (i) (ii) Joint Principal Advisers Joint Lead Arrangers CIMB Investment Bank Berhad ( CIMB ) and RHB Investment Bank Berhad ("RHB Investment Bank"). CIMB and RHB Investment Bank (collectively, the "Joint Lead Arrangers" or JLAs ). (iii) Co-arranger Not applicable. (iv) Solicitor Koh Yew Chong and Partners ("Solicitors"). (v) Financial adviser Not applicable. (vi) Technical adviser Not applicable. (vii) Sukuk trustee (viii) Shariah adviser CIMB Islamic Trustee Berhad ( Sukuk Trustee ). CIMB Islamic Bank Berhad ( Shariah Adviser ). (ix) Guarantor Gamuda Berhad ( Kafalah Provider ). (x) Valuer Not applicable. (xi) Facility agent CIMB ( Facility Agent ). (xii) Primary subscriber (under If applicable, the primary subscriber(s) will be determined prior to each issuance. 3

4 a bought-deal arrangement) and amount subscribed (xiii) Underwriter amount underwritten and Islamic commercial papers ( ICPs ) The ICPs may be underwritten if the Issuer and the Joint Lead Managers (as defined below) mutually agree based on terms and conditions, including those relating to the underwritten rate and the participation and underwriting fees, to be agreed. In the event underwriting (either partial or full) is required, the Islamic commercial papers issuance programme of up to RM500.0 million ( ICP Programme ) shall be underwritten by a consortium of eligible financial institutions ( Underwriters ) to be arranged by the Joint Lead Managers on a best effort basis. The Underwriters shall severally commit themselves to purchase the ICPs not taken up by the tender panel members ( TPMs ) at the underwritten rate, pro-rated to their underwriting commitments. With respect to each issue, the underwriting commitment in respect of each Underwriter shall be reduced by the nominal value of the ICPs subscribed by that particular Underwriter, in its capacity as a TPM. Islamic medium term notes ( IMTN ) The IMTNs to be issued under a Islamic medium term notes programme of up to RM1,000.0 million ( IMTN Programme ) will not be underwritten. (xiv) Central depository Bank Negara Malaysia ("BNM"). (xv) Paying agent (xvi) Reporting accountant (xvii) Calculation agent BNM. Not applicable. Not applicable. (xviii) Others (please specify) Joint Lead Managers / Joint Bookrunners (if applicable) 4

5 (i) CIMB (ii) RHB Investment Bank TPMs Persons to whom an issue of, or an offer or invitation to subscribe the ICPs would fall within Section 4(6) of the Companies Act, 1965, as amended from time to time ( Companies Act ) and any of the categories of persons or in the circumstances specified under Schedule 6 or Section 229(1)(b), Schedule 7 or Section 230(1)(b), read together with Schedule 9 or Section 257(3) of the Capital Markets and Services Act, 2007( CMSA ). (b) Islamic principle used The ICPs and the IMTNs (collectively referred to as the Sukuk Murabahah ) are to be issued under the Islamic principle of Murabahah (via a tawarruq arrangement). (c) Facility description An ICP Programme and an IMTN Programme with a combined aggregate nominal value of up to RM1,000.0 million and a sub-limit of RM500.0 million in nominal value for the ICP Programme (Collectively, the Sukuk Murabahah Programmes ) based on the Islamic principle of Murabahah (via a tawarruq arrangement) based on Commodity Murabahah structure in the following form: Commodity Murabahah 1. The Sukuk Trustee (on behalf of the investors of the Sukuk Murabahah (the "Sukukholders")), shall appoint TESB as agent/wakeel of the Sukukholders (in such capacity, the "Purchase Agent") to purchase and sell certain Shariahcompliant commodities (the "Commodities"). The Purchase Agent will then appoint the Facility Agent to act as the sub-agent to purchase and sell the Commodities (in such capacity, the Sub- Purchase Agent ). 2. TESB (as Purchaser for itself) shall from time to time, issue a purchase order ("Purchase Order") to the Purchase Agent and the Sub-Purchase Agent to purchase the Commodities. In the Purchase Order, TESB (as Purchaser for itself) will request the Purchase Agent and the Sub- 5

6 Purchase Agent to purchase the Commodities and will irrevocably and unconditionally undertake to purchase the Commodities from the Sukukholders via the Sub-Purchase Agent at a price (the Deferred Sale Price ) being the aggregate of (i) the Purchase Price (as defined in paragraph 3 below), and (ii) the profit margin of the relevant Sukuk Murabahah, payable on a deferred payment basis. 3. Based on the Purchase Order, the Sub-Purchase Agent will purchase on a spot basis the Commodities from commodity vendor(s) in the Bursa Suq Al-Sila commodity platform and/or other independent commodity brokers, which shall be identified prior to each Sukuk Murabahah issuance, through a Commodity Trading Participant ("CTP") at a purchase price ("Purchase Price") which shall be an amount equivalent to the Sukuk Murabahah proceeds. The Purchase Price of the Commodities shall be in line with the asset pricing requirement stipulated under the Guidelines on Sukuk revised and effective on 8 January 2014 issued by the SC ( Guidelines on Sukuk ) as may be amended from time to time. 4. TESB (as the Issuer) shall then issue Sukuk Murabahah to the Sukukholders whereby the proceeds thereof shall be used to pay the Purchase Price of the Commodities. The Sukuk Murabahah shall evidence, amongst others, the Sukukholders ownership of the Commodities and once the Commodities are sold to TESB (as the Purchaser for itself), the Sukukholders entitlement to receive the Deferred Sale Price. 5. Thereafter, the Sub-Purchase Agent (on behalf of the Purchase Agent as wakeel to the Sukukholders) shall sell the Commodities to TESB (as the Purchaser for itself) at the Deferred Sale Price. 6. Upon completion of such purchase, the Purchaser shall sell the Commodities to the Bursa Suq Al- Sila commodity market and/or other independent 6

7 commodity brokers, which shall be identified prior to each Sukuk Murabahah issuance, through a CTP for a cash consideration equal to the Purchase Price on a spot basis. 7. The Sukuk Murabahah may be issued with or without periodic profit payments ( Periodic Profit Payments ). For Sukuk Murabahah with Periodic Profit Payments, TESB shall make Periodic Profit Payments based on a profit rate to be agreed prior to each issuance of the Sukuk Murabahah forming part of the Deferred Sale Price to the Sukukholders during the tenure of the Sukuk Murabahah. For Sukuk Murabahah without Periodic Profit Payments, TESB shall only make a one-off payment in one lump sum on the maturity date, which shall be equivalent to the Deferred Sale Price, to the Sukukholder(s). Each such payment shall reduce the Issuer s payment obligation in respect of the Deferred Sale Price payable on the Commodities to the extent of such payment actually made. On (i) the maturity date of the relevant Sukuk Murabahah; or (ii) upon the declaration of an Event of Default (as defined in clause 2(v) below), whichever is earlier, all amounts then outstanding on the Deferred Sale Price shall be paid by TESB (as the Issuer) to the Sukukholders as final settlement of the same, subject to Ibra (as defined in clause 2(y)(vi) below), where applicable, whereupon the relevant Sukuk Murabahah shall be cancelled. 8. Gamuda Berhad shall provide an unconditional and irrevocable guarantee under the principle of Kafalah, as a continuing obligation, in favour of the Sukuk Trustee, for and on behalf of the Sukukholders, under which Gamuda Berhad shall guarantee the Guaranteed Amount (as defined below) under the Sukuk Murabahah and the Sukuk Murabahah Programmes. The Guaranteed Amount shall include the following: (i) the Deferred Sale Price; and (ii) any fees, charges, costs, expenses, Ta widh and any other amount due under the Sukuk 7

8 Murabahah. The transaction structure is set out in Appendix 1. (d) Identified assets Shariah-compliant Commodities available at Bursa Suq Al-Sila which would exclude ribawi items in the category of medium of exchange such as currency, gold and silver, and which will be identified, from time to time, at or around the time of each issuance of the Sukuk Murabahah. (e) (f) (g) Purchase and selling price/rental (where applicable) Issue/sukuk programme size Tenure of issue/sukuk programme To be determined prior to each issuance of the Sukuk Murabahah under the Sukuk Murabahah Programmes. The outstanding nominal value of ICPs issued under the ICP Programme at any point in time shall not exceed RM500.0 million. The outstanding nominal value of IMTNs issued under the IMTN Programme at any point in time shall not exceed RM1,000.0 million. In addition, the aggregate outstanding nominal value of the Sukuk Murabahah at any point in time shall not exceed RM1,000.0 million. The Issuer shall have the option to upsize the programme limits of the ICP Programme and/or the IMTN Programme and for the avoidance of doubt, the Sukukholders shall via the Trust Deed provide their upfront consent for any upsizing of the ICP Programme and/or the IMTN Programme provided that there is no adverse impact on the ratings of the ICP Programme and/or the IMTN Programme (as the case may be). Any upsizing of the programme limit shall be subject to obtaining all regulatory approvals. ICP Programme Seven (7) years from the first Issue Date (as defined in clause 2v below) under the ICP Programme, provided that the first issue of the ICPs shall not be later than two (2) years from the date of the Securities Commission Malaysia s ( SC ) s authorisation. 8

9 (h) Availability period of sukuk programme IMTN Programme Thirty (30) years from the first issue date under the IMTN Programme, provided that the first issue of the Sukuk Murabahah shall not be later than two (2) years from the date of the SC s authorisation. The tenure of the Sukuk Murabahah is as follows: ICPs One (1) to twelve (12) months as the Issuer may select, provided that the ICPs mature prior to the expiry of the ICP Programme. IMTNs More than one (1) year and up to thirty (30) years as the Issuer may select, provided always that the IMTNs mature prior to the expiry of the IMTN Programme. The period commencing from the date of compliance of all conditions precedent of the Sukuk Murabahah Programmes unless waived by the Joint Lead Arrangers, and all other applicable conditions to the satisfaction of the Joint Lead Arrangers and ending on the expiry date of the ICP Programme or the IMTN Programme (as the case may be), provided that the first issuance of the Sukuk Murabahah under each of the Sukuk Murabahah Programmes shall be made within two (2) years from the date of SC s authorisation. (i) Profit/coupon/rental rate ICPs Not applicable as the ICPs shall be issued without Periodic Profit Payments. IMTNs The Periodic Profit Payments (if applicable) will be determined at the point of each issuance of such IMTNs. 9

10 (j) Profit/coupon/rental payment frequency ICPs Not applicable as the ICPs shall be issued without Periodic Profit Payments. (k) (l) (m) (n) (o) Profit/coupon/rental payment basis Security/collateral, where applicable Details on utilisation of proceeds by issuer Sinking fund and designated accounts, where applicable Rating IMTNs Not applicable for IMTNs issued without Periodic Profit Payments. For IMTNs issued at par, at premium or at discount, with Periodic Profit Payments, the Periodic Profit Payments shall be payable semi-annually or such other frequency as may be agreed between the Issuer and the Joint Lead Managers. ICPs Not applicable. IMTNs The Periodic Profit Payments shall be calculated on an actual number of days based on 365-day basis, or in any event, in accordance with the MyClear Rules and Procedures (as defined in clause (p) below). None. The proceeds raised from the Sukuk Murabahah shall be utilized by the Issuer for Shariah-compliant purposes including land acquisition, capital expenditure, repaying/refinancing the borrowings, shareholders advances and inter-company loans/advances outstanding as at the date of the first issuance under the Sukuk Murabahah Programmes ( Permitted Repayment of Advances ) and working capital for other general funding requirements. Not applicable. 10

11 Credit rating(s) assignedand whether the rating is final or indicative. In the case of a sukuk programme where the credit rating is not assigned for the full amount, disclosures set out in paragraph 9.04 of these guidelines must be made Name of rating agency Indicative ratings of: (i) P1(s) for the ICP Programme; and (ii) AA3(s) for the IMTN Programme. RAM Rating Services Berhad ( Rating Agency ). (p) Mode of issue ICPs The ICPs may be issued via competitive tender by the TPMs or direct placement on a best effort basis or on a bought deal basis. IMTNs The IMTNs may be issued via direct placement on a best effort basis or on a bought deal basis or on a book running on a best effort basis. Issuance of the Sukuk Murabahah under the Sukuk Murabahah Programmes shall be in accordance with: (i) the Operational Procedures for Securities Services issued by Malaysian Electronic Clearing Corporation Sdn Bhd ("MyClear") effective on 10 October 2013; and (ii) the Participation and Operation Rules for Payment and Securities Services issued by MyClear effective on 10 October 2013, (q) Selling restriction, including tradability, i.e. whether tradable or nontradable as amended and substituted from time to time ("MyClear Rules and Procedures"). The Sukuk Murabahah are tradable but shall not be offered, sold, transferred or otherwise disposed, directly or indirectly other than to persons falling within the relevant category of persons specified in Section 11

12 4(6) of the Companies Act and any of the categories of persons or in the circumstances specified under the following schedules of the CMSA: (i) at the point of issuance of the Sukuk Murabahah Schedule 6 (or Section 229(1)(b)) and Schedule 7 (or Section 230(1)(b)), read together with Schedule 9 (or Section 257(3)) of the CMSA as amended from time to time. (ii) after the issuance of the Sukuk Murabahah (r) (s) Listing status and types of listing, where applicable Other regulatory approvals required in relation to the issue, offer or invitation to subscribe or purchase sukuk, and whether or not obtained Schedule 6 (or Section 229(1)(b)), read together with Schedule 9 (or Section 257(3)) of the CMSA as amended from time to time. The Sukuk Murabahah may be listed on (i) Bursa Malaysia Securities Berhad ("Bursa Securities") under the Exempt Regime, or (ii) any other stock exchanges for profiling purposes. None. (t) Conditions precedent Including but not limited to the following (all have to be in form and substance acceptable to the Joint Lead Arrangers): Main Documentation The Transaction Documents (as defined under 2(y)(iv) below) have been duly executed and, where applicable, stamped or endorsed as exempted from stamp duty (where applicable) and presented for registration. The Issuer and the Kafalah Provider (i) Certified true copies of the Certificate of Incorporation and the Memorandum and Articles of Association of the Issuer and the Kafalah 12

13 Provider. (ii) Certified true copies of the latest Forms 24, 44 and 49 of the Issuer and the Kafalah Provider. (iii) An extract of the board resolution of the Issuer authorising, among others, the establishment of the Sukuk Murabahah Programmes, the issuance of the Sukuk Murabahah and the execution of all the relevant Transaction Documents. (iv) An extract of the board resolution of the Kafalah Provider authorising, among others, the issuance of the corporate guarantee. (v) A list of the Issuer s and the Kafalah Provider s authorised signatories and their respective specimen signatures. (vi) A report of the relevant company search of the Issuer and the Kafalah Provider. (vii) A report of the relevant winding up search or the relevant statutory declaration of the Issuer and the Kafalah Provider. General (i) (ii) The authorisation of the SC in respect of the Sukuk Murabahah Programmes. All necessary approvals and consents required (including but not limited to the existing lenders/financiers of the Issuer and the Kafalah Provider) for the implementation of the Sukuk Murabahah Programmes (if required) and the execution of the Transaction Documents have been obtained and the Issuer and/or the Kafalah Provider are in compliance with all conditions of such approvals and consents. (iii) Evidence of confirmation from the Shariah Adviser that the structure and mechanism of the Sukuk Murabahah Programmes together with the Transaction Documents are in compliance 13

14 with Shariah principles. (iv) The ICP Programme has been awarded a rating of P1(s) and the IMTN Programme has been awarded a rating of AA3(s) or its equivalent by the Rating Agency. (v) Arrangement (acceptable to the Joint Lead Arrangers) for the payment of all relevant transaction fees, costs and expenses in relation to the Sukuk Murabahah Programmes. (u) Representations and warranties (vi) The Joint Lead Arrangers have received from its legal counsel a favourable legal opinion addressed to it and the Sukuk Trustee advising with respect to, among others, the legality, validity and enforceability of the Transaction Documents and a confirmation addressed to the Joint Lead Arrangers that all the conditions precedent have been fulfilled or otherwise waived by the Joint Lead Arrangers. (vii) Any other conditions as may be advised by the Solicitors and to be agreed by the Issuer and/or the Kafalah Provider. Each issuance of the Sukuk Murabahah shall be subject to certain conditions as may be advised by the Solicitors and mutually agreed by the Issuer and the Joint Lead Managers, including a condition that no Event of Default has occurred or would occur if the relevant issuance is made. Including but not limited to the following: (i) each of the Issuer and the Kafalah Provider is a company with limited liability duly incorporated and validly existing under the laws of Malaysia, has full power to carry on its business and to own its property and assets, and has full beneficial ownership of all its property and assets; (ii) the Memorandum and Articles of Association of each of the Issuer and the Kafalah Provider incorporate provisions which authorise, and all necessary corporate and other relevant actions 14

15 have been taken to authorise, and all relevant consents and approvals of any administrative, governmental or other authority or body in Malaysia have been duly obtained and are in full force and effect which are required to authorise, the Issuer and the Kafalah Provider to execute and deliver and perform the transactions contemplated in the Transaction Documents in accordance with their terms; (iii) neither the execution and delivery of any of the Transaction Documents nor the performance of any of the transactions contemplated by the Transaction Documents did or does as at the date this representation and warranty is made or repeated (a) contravene or constitute a default under any provision contained in any agreement, instrument, law, ordinance, decree, judgment, order, rule, regulation, licence, permit or consent by which the Issuer and/or Kafalah Provider or any of their property and assets is bound or which is applicable to the Issuer and/or Kafalah Provider or any of their property and assets, (b) cause any limitation on the Issuer and/or Kafalah Provider or the powers of their directors, whether imposed by or contained in its Memorandum and Articles of Association or in any agreement, instrument, law, ordinance, decree, order, rule, regulation, judgment or otherwise, to be exceeded, or (c) cause the creation or imposition of any security interest or restriction of any nature on any of the Issuer s and/or Kafalah Provider s property and assets; (iv) each of the Transaction Documents is or will when executed and/or issued, as the case may be, be in full force and effect and constitutes, or will when executed or issued, as the case may be, constitute, valid and legally binding obligations of the Issuer and the Kafalah Provider enforceable in accordance with its terms; (v) the Issuer and the Kafalah Provider s audited financial statements are prepared in accordance with approved accounting standards and they give a true and fair view of the Issuer and the 15

16 Kafalah Provider s financial position and results of operations for the period to which the audited financial statements are made and are audited and certified by qualified auditors appointed by the Issuer or the Kafalah Provider, as the case may be; (vi) no tax liabilities of any kind are outstanding in payments and all computations and payments that should be or should have been made to the taxation authority or other relevant authorities have been made within the requisite periods and are up-to-date, correct and made on a proper basis with the taxation authority and other relevant authorities; (vii) save as disclosed in writing by the Issuer and/or the Kafalah Provider to the Joint Lead Arrangers prior to the date of the Trust Deed, no litigation or arbitration is current or, to its best of knowledge, is threatened against the Issuer and/or the Kafalah Provider which if adversely determined would have a Material Adverse Effect (as defined under clause 2v below); (viii) no authorisation, approval, consent, licence, exemption, registration, recording, filing or notarisation and no payment of any duty or tax and no other action whatsoever which has not been duly and unconditionally obtained or if obtained with conditions, the conditions have been fulfilled or will be fulfilled, as the case may be, made or taken is necessary or desirable to ensure the legality, validity, enforceability of the liabilities and obligations of the Issuer and/or the Kafalah Provider, or the rights of the Joint Lead Arrangers or the Sukuk Trustee under the Transaction Documents or the rights of the Sukukholders under the Sukuk Murabahah; (ix) save as disclosed to the JLAs prior to the date of the Trust Deed (in relation to the Issuer only), all consents, licences, approvals or authorisations of governmental authorities in Malaysia which are required for the Issuer and/or the Kafalah Provider to own their assets and carry on their businesses as it is being conducted, have been 16

17 duly obtained and complied with and are in full force and effect; and (x) such other representations and warranties as may be advised by the Solicitors and to be mutually agreed between the Issuer and the Joint Lead Arrangers. (v) Events of default, dissolution event and enforcement event, where applicable Events of Default for a facility of this nature as advised by the Solicitors and Joint Lead Arrangers and agreed with the Issuer, including but not limited to the following: (i) (ii) (iii) the Issuer fails to pay any amount due from it under any of the Transaction Documents on the due date or, if so payable, on demand; any representation or warranty made or given by the Issuer or the Kafalah Provider 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 Murabahah and/or any of the Transaction Documents is or 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 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 in any material respect, and in the case of a failure which in the opinion of the Sukuk Trustee is capable of being remedied, the Issuer or the Kafalah Provider does not remedy the failure within a period of thirty (30) days after the Issuer or the Kafalah Provider (as the case may be) became aware or having been notified by the Sukuk Trustee of the failure, whichever is earlier; the Issuer or the Kafalah Provider fails to observe or perform its obligations under any of the Transaction Documents or the Sukuk Murabahah or under any undertaking or arrangement entered into in connection therewith other than an obligation of the type referred to in sub-paragraph (i) above, and in 17

18 the case of a failure which in the opinion of the Sukuk Trustee is capable of being remedied, the Issuer or the Kafalah Provider does not remedy the failure within a period of thirty (30) days after the Issuer or the Kafalah Provider became aware or having been notified by the Sukuk Trustee of the failure, whichever is earlier; (iv) (v) (vi) there has been a breach by the Issuer or the Kafalah Provider of any obligation under any of the Issuer s or the Kafalah Provider s existing contractual obligations which in the opinion of the Sukuk Trustee may have a Material Adverse Effect and, if in the opinion of the Sukuk Trustee is capable of being remedied, the Issuer or the Kafalah Provider (as the case may be) does not remedy the breach within a period of thirty (30) days after the Issuer or the Kafalah Provider (as the case may be) became aware or having been notified by the Sukuk Trustee of the breach, whichever is earlier; (a) any indebtedness for borrowed moneys of the Issuer or the Kafalah Provider becomes due or payable or capable of being declared due or payable prior to its stated maturity, or (b) any guarantee or similar obligations of the Issuer or the Kafalah Provider is not discharged at maturity or when called and such declaration of indebtedness being due or payable, or (c) the Issuer or the Kafalah Provider goes into default under, or commits a breach of, any agreement or instrument relating to any such indebtedness, guarantee or other obligations, or (d) any security created to secure such indebtedness, becomes enforceable, and where any of the above is not discharged or disputed in good faith by the Issuer or the Kafalah Provider in a court of competent jurisdiction thirty (30) days from the date of such declaration or call or enforcement; an encumbrancer takes 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 18

19 property or assets of the Issuer or the Kafalah Provider, or distress, legal process, sequestration or any form of execution or process is levied or enforced or sued out against the Issuer or Kafalah Provider which has a Material Adverse Effect on the Issuer s and/or the Kafalah Provider s ability to comply with the Transaction Documents and is not discharged within thirty (30) days after being levied, enforced or sued out, or any security interest which may for the time being affect any of its / their assets become enforceable; For the purpose of this paragraph 2(v)(vi), references to substantial shall mean: (a) in relation to the Issuer (i) such business, property or assets of the Issuer, the book value of which is more than 10% of the Issuer's net assets (or in the event where the Issuer having subsidiaries or associated companies, 10% of the Issuer's consolidated net assets); and (ii) upon the occurrence of the aforesaid event(s), such event does not result in the ratings of the Sukuk Murabahah Programmes to fall below its then prevailing ratings as assigned by the Rating Agency ( Rating Test ); or (b) in relation to the Kafalah Provider (i) such business, property or assets of the Kafalah Provider the book value of which is more than 10% of the Kafalah Provider's consolidated net assets; and (ii) upon the occurrence of the aforesaid event(s), such event(s) does not breach the Rating Test. For the avoidance of doubt, the Rating Test will not be applicable if the respective provision of (a)(i) and/or (b)(i) above is not triggered. The book value of the business, property or assets is as reflected in the Issuer s and/or the Kafalah Provider s latest quarterly unaudited financial statements which shall be certified by a director of the Issuer and/or the Kafalah 19

20 Provider, as the case may be. (vii) (viii) the Issuer and/or the Kafalah Provider fails to satisfy any judgment passed against it by any court of competent jurisdiction and no appeal against such judgment or 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; any step is taken for the winding up, dissolution or liquidation of the Issuer and/or the Kafalah Provider or a resolution is passed for the winding up of the Issuer and/or the Kafalah Provider or a petition for winding up is presented against the Issuer and/or the Kafalah Provider and the Issuer and/or the Kafalah Provider has not taken any action in good faith to set aside such petition within thirty (30) days from the date of service of such winding up petition or a winding up order has been made against the Issuer and/or the Kafalah Provider; (ix) the Issuer and/or the Kafalah Provider convenes a meeting of its creditors or proposes or makes any arrangement including any scheme of arrangement or composition or begins negotiations with its 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 declared by a court of competent jurisdiction in respect of or affecting all or any part of its indebtedness or any assignment is made for the benefit of its creditors (other than for the purposes of and followed by a reconstruction which has been approved in writing by the Sukuk Trustee, unless during or following such reconstruction the Issuer and/or the Kafalah Provider becomes or is declared to be insolvent) or where a scheme of arrangement under Section 176 of the Companies Act has been instituted against the Issuer and/or the Kafalah Provider; 20

21 (x) (xi) (xii) (xiii) any creditor of the Issuer and/or the Kafalah Provider exercises a contractual right to take over the financial management of the Issuer and/or the Kafalah Provider and such event in the opinion of the Sukuk Trustee may have a Material Adverse Effect on the Issuer and/or the Kafalah Provider; (a) the Issuer and/or the Kafalah Provider is deemed unable to pay any of its debts under Section 218(2) of the Companies Act, or (b) the Issuer and/or Kafalah Provider becomes unable to pay any of its debts as they fall due, or (c) the Issuer and/or Kafalah Provider suspends or threatens to suspend making payments with respect to all or any of its debts, unless in any of the above, the Issuer and/or the Kafalah Provider is disputing in good faith and taking proper legal steps in respect of the matter; anything analogous of any events specified in sub-paragraphs 2(v)(vi), 2(v)(viii), 2(v)(ix), 2(v)(x) and 2(v)(xi) above occurs under the laws of applicable jurisdiction; where there is a revocation, withholding or modification of any license, authorisation, approval or consent which in the opinion of the Sukuk Trustee may materially and adversely impair or prejudice the ability of the Issuer and/or the Kafalah Provider to comply with the terms and conditions of the Transaction Documents; (xiv) the Issuer and/or the Kafalah Provider changes or threaten to change the nature or scope of a substantial part of its business, or suspends or threatens to suspend or cease or threatens to cease the operation of a substantial part of its business which it now conducts and such change, suspension or cessation in the opinion of the Sukuk Trustee may have a Material Adverse Effect; (xv) the Issuer and/or Kafalah Provider repudiates any of the Transaction Documents or the 21

22 Issuer and/or Kafalah Provider does or causes to be done any act or thing evidencing an intention to repudiate any of the Transaction Documents; (xvi) the whole or a substantial part of the business, property and assets of the Issuer and/or Kafalah Provider are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any governmental body which in the opinion of the Sukuk Trustee may have a Material Adverse Effect. For the purpose of this paragraph 2(xvi), references to substantial shall mean: (a) in relation to the Issuer, (i) such business, property or assets of the Issuer the book value of which is more than 10% of the Issuer's net assets (or in the event where the Issuer having subsidiaries or associated companies, 10% of the Issuer's consolidated net assets); and (ii) the upon the occurrence of the aforesaid event, such event does not breach the Rating Test; or (b) in relation to the Kafalah Provider, (i) such business, property or assets of the Kafalah Provider the book value of which is more than 10% of the Kafalah Provider's consolidated net assets; and (ii) upon the occurrence of the aforesaid event, such event does not result in the breach of the Rating Test; For the avoidance of doubt, the Rating Test will not be applicable if the respective provision of (a)(i) and/or (b)(i) above is not triggered. The book value of the business, property or assets is as reflected in the Issuer s and/or the Kafalah Provider s latest quarterly unaudited financial statements which shall be certified by a director of the Issuer and/or the Kafalah Provider, as the case may be. (xvii) at any time any of the provisions of the 22

23 Transaction Documents is or becomes illegal, void, voidable or unenforceable; (xviii) any event or events has or have occurred or a situation exists which in the opinion of the Sukuk Trustee may have a Material Adverse Effect on the Issuer and/or the Kafalah Provider, and in the case of the occurrence of such event or situation which in the opinion of the Sukuk Trustee is capable of being remedied, the Issuer and/or the Kafalah Provider does not remedy it within a period of thirty (30) days after the Issuer and/or the Kafalah Provider became aware or having been notified by the Sukuk Trustee of the event or situation, whichever is earlier; and (xix) any other events of default as may be advised by the Solicitors and to be mutually agreed between the Issuer and the Joint Lead Arrangers. Upon the declaration of an Event of Default, no further issuance of Sukuk Murabahah may be made under the Sukuk Murabahah Programmes and the Sukuk Trustee may at its discretion or, upon the Sukukholders instruction, shall institute such proceedings as it thinks fit against the Issuer including the enforcement of the guarantee provided by the Kafalah Provider to enforce payment of the Redemption Amount and all other sum payable under the Sukuk Murabahah Programmes and to enforce its rights under the Transaction Documents. Material Adverse Effect means any material adverse effect on the business or condition (financial or otherwise) or results of the operations of the Issuer or the Kafalah Provider or the occurrence of any event which may materially and adversely affect the ability of the Issuer or the Kafalah Provider to perform any of its obligations under any of the Transaction Documents. Redemption Amount means the amount equivalent to the Deferred Sale Price at the Issue Date less the aggregate of Periodic Profit Payments paid (if any) less Ibra (if any). 23

24 Issue Date means in relation to any Sukuk Murabahah, the date on which the Sukuk Murabahah are issued. (w) Covenants (i) Positive covenants Including but not limited to the following: (i) (ii) (iii) (iv) the Issuer shall, and shall cause all its subsidiaries, and the Kafalah Provider shall, and shall cause all its subsidiaries, to maintain in full force and effect all relevant authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) and will promptly obtain any further authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) which is or may become necessary to enable them to own their assets, to carry on their businesses or for the Issuer and the Kafalah Provider to enter into or perform their obligations under the Transaction Documents or to ensure the validity, enforceability, admissibility in evidence of the obligations of the Issuer, the Kafalah Provider or the rights of the Sukukholders, the Sukuk Trustee, the Joint Lead Arrangers under the Transaction Documents and the Issuer and the Kafalah Provider shall comply with the same; the Issuer and Kafalah Provider shall at all times on demand execute and cause and procure the execution of all such further documents and do all such further acts reasonably necessary at any time or times to give effect to the terms and conditions in the Transaction Documents; the Issuer shall, and shall cause and procure its subsidiaries to, exercise and the Kafalah Provider shall, and shall cause and procure all its subsidiaries to, exercise reasonable diligence in carrying out their businesses and affairs in a proper and efficient manner; the Issuer and the Kafalah Provider shall promptly perform and carry out all their 24

25 obligations under all the Transaction Documents (including but not limited to redeeming the Sukuk Murabahah on the relevant maturity date(s) or any other date on which the Sukuk Murabahah are due and payable) and the Issuer and/or the Kafalah Provider shall immediately notify the Facility Agent and/or Sukuk Trustee in the event that the Issuer and/or the Kafalah Provider, as the case may be, is unable to fulfil or comply with any of the provisions of the Transaction Documents; (v) (vi) (vii) (viii) (ix) the Issuer and the Kafalah Provider shall prepare its audited financial statements on a basis consistently applied in accordance with approved accounting standards in Malaysia and those audited financial statements shall give a true and fair view of the results of the financial position and operations of the Issuer and the Kafalah Provider for the period to which the audited financial statements are made up and are audited and certified by qualified auditors appointed by the Issuer and/or the Kafalah Provider; the Issuer and the Kafalah Provider shall maintain such insurances in respect of its assets in business against all risks (including but not limited to third party risks, workmen s compensation, fire, contractors all risks, etc.) which a prudent company carrying a similar business to that of the Issuer or the Kafalah Provider would normally insure; the Issuer shall remain as a subsidiary of the Kafalah Provider; the Issuer shall maintain a Paying Agent in Malaysia at all times; the Issuer and the Kafalah Provider shall comply with all applicable provisions of the CMSA and/or the notes, circulars, conditions or guidelines issued or published by the SC and other regulatory agencies from time to time; and 25

26 (x) any other covenants as advised by the Solicitors and to be agreed by the Issuer including but not limited to the requirements under the SC s Trust Deeds Guidelines (revised on 12 July 2011 and effective on 12 August 2011) issued by the SC as may be replaced, substituted or revised from time to time (the Trust Deeds Guidelines ). (ii) Negative covenants Including but not limited to: (i) (ii) (iii) (iv) the Issuer and the Kafalah Provider shall not amend its Memorandum or Articles of Association in a manner that is inconsistent with the provisions of the Transaction Documents or in a manner which may be materially prejudicial to the interest of the Sukukholders; the Issuer shall not use the proceeds of the Sukuk Murabahah Programmes except for the purposes set out herein; other than the Sukuk Murabahah Programmes, any other existing borrowings disclosed prior to the date of the Trust Deed and any trade facilities of up to RM100.0 million (for the Issuer s ordinary course of business), the Issuer shall not obtain or permit to exist any additional borrowings; (a) the Issuer shall not create or permit to exist any encumbrance, mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment by way of security, trust arrangement for the purpose of providing security or other security interest of any kind including, without limitation, title transfer and/or retention arrangements having a similar effect or any agreement to create any of the foregoing, save and except for (i) encumbrances created pursuant to the Issuer s existing secured credit facilities as disclosed prior to the date of the Trust Deed and to be set out in the Transaction Documents, (ii) liens arising in the ordinary course of business of the Issuer by operation of law and not by way 26

27 of contract or (b) the Kafalah Provider shall not create or permit to exist any encumbrance, mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment by way of security, trust arrangement for the purpose of providing security or other security interest of any kind including, without limitation, title transfer and/or retention arrangements having a similar effect or any agreement to create any of the foregoing, save and except for (i) encumbrances created pursuant to the Kafalah Provider s existing secured credit facilities disclosed prior to the date of the Trust Deed and to be set out in the Transaction Documents, (ii) liens arising in the ordinary course of business of the Kafalah Provider, by operation of law and not by way of contract or (iii) assignment of the rights and benefits of construction contracts/arrangements undertaken the Kafalah Provider, pursuant to borrowings by the Kafalah Provider for purposes of securing working capital and trade/guarantee facilities specifically for the financing of such construction contracts/arrangements; (v) (a) in relation to the Issuer, the Issuer shall not dispose any of its assets, (i) which the assets of the Issuer, the book value of which is more than 10% of the Issuer's net assets (or in the event where the Issuer having subsidiaries or associated companies, 10% of the Issuer's consolidated net assets); and (ii) upon the occurrence of the aforesaid event, such event does not result in the breach of the Rating Test; (b) in relation to the Kafalah Provider, the Kafalah Provider shall not dispose any of its assets (i) which the assets of the Kafalah Provider, the book value of which is more than 10% of the Kafalah Provider's consolidated net assets; and (ii) upon the occurrence of the aforesaid event, such event does not result in the breach of the Rating Test; For the avoidance of doubt, the Rating Test will not be applicable if the respective 27

28 provision of (a)(i) and/or (b)(i) above is not triggered. The book value of the business, property or assets is as reflected in the Issuer s and/or the Kafalah Provider s latest quarterly unaudited financial statements which shall be certified by a director of the Issuer and/or the Kafalah Provider, as the case may be. save and except for: (a) (b) (c) (d) the disposal of shares in the Issuer s and the Kafalah Provider s subsidiaries in conjunction with any listing exercise; the asset disposal solely for purposes of facilitating Shariah concepts used in Islamic financing facilities granted to the Issuer, the Kafalah Provider or its subsidiaries and associates; disposal in the ordinary course of business and on ordinary commercial terms and on the basis of arm s length transaction; or tax optimisation purposes PROVIDED THAT it shall not have a Material Adverse Effect; (vi) (vii) the Issuer and Kafalah Provider shall not reduce or in any way whatsoever alter (except by way of an increase and in the case of the Kafalah Provider, other than any reduction of its paid-up capital resulting from the purchase by the Kafalah Provider of its own shares pursuant to Section 67A of the Companies Act), its authorised or paid-up share capital whether by varying the amount, structure or value thereof or the rights attached thereto or by converting any of its share capital into stock, or by consolidating, dividing or subdividing all or any of its shares; the Issuer and Kafalah Provider shall not declare or pay any dividends or make any distribution whether income or capital in nature 28

29 to its shareholders if an Event of Default has occurred or if following such payment, distribution or declaration, an Event of Default would occur; (viii) (ix) (x) the Issuer and the Kafalah Provider shall not lend any money or advance to any person other than: (a) to the Issuer's and/or the Kafalah Providers directors, officers or employees as part of their terms of employment, (b) to contract counterparties pursuant to contracts entered into in the ordinary course of business, and (c) to its subsidiaries, associated companies and joint ventures which the Issuer and/or the Kafalah Provider is a party to, and (d) for the Issuer, to the Issuer s shareholders; save and except for the Permitted Repayment of Advances, the Issuer shall not make any payments or repayment (whether in relation to principal, interest or otherwise) to its shareholders in connection with any loans or advances from its shareholder(s) if there are any outstanding Sukuk Murabahah or if an Event of Default has occurred or if following such payment, an Event of Default would occur; the Issuer shall not enter into any agreement or transaction, directly or indirectly, with interested persons (including a director of the Issuer, a substantial shareholder of the Issuer or persons connected with a director or a substantial shareholder of the Issuer), save and except such transactions between the Issuer and interested persons which have been entered into and disclosed to the Sukuk Trustee prior to the date of the Trust Deed, unless: (i) (ii) such transaction is on terms that are no less favourable to the Issuer than those which could have been obtained in a comparable transaction from persons who are not interested persons; and in respect of a transaction involving an aggregate payment or value equal to or 29

30 greater than Ringgit Malaysia Five Hundred Million (RM500,000,000.00) per financial year, the Issuer obtains certification from an independent adviser that the transaction is carried out on fair and reasonable terms; provided that the Issuer shall certify to the Sukuk Trustee: (a) that the transaction complies with the requirement in clause 2(w)(ii)(x)(i); (b) that the Issuer has received the certification referred to in clause 2(w)(ii)(x)(ii) (where applicable); and (c) the transaction has been approved by the majority of the Issuer s Board of Directors or shareholders in a general meeting, as the case may require. (xi) the Kafalah Provider shall not enter into any related party transactions unless: (a) such transactions are:- (1) in the ordinary course of its business; (2) on an arms-length basis; and (3) will not have a Material Adverse Effect on the Kafalah Provider; or (b) the agreements are between the Kafalah Provider and its shareholders, subsidiaries or associated companies for tax optimisation purposes PROVIDED THAT such agreement shall not have a Material Adverse Effect on the Kafalah Provider; (xii) others as advised by the Solicitors and to be agreed by the Issuer including but not limited to the requirements under the SC s Trust Deeds Guidelines. (iii) Information covenants Including but not limited to the following: (i) the Issuer shall provide to the Sukuk Trustee 30

31 on an annual basis, a certificate signed by any two (2) directors of the Issuer confirming that it has observed, complied with and performed all its covenants and obligations under the Transaction Documents and the terms and conditions of the Sukuk Murabahah and that there did not exist or had not existed, from the date the Sukuk Murabahah were first issued or the date of the previous certificate, as the case may be, any Event of Default, and if such is not the case, to specify the same; (ii) the Issuer and the Kafalah Provider shall deliver to the Sukuk Trustee the following: (a) (b) (c) as soon as they become available (and in any event within one hundred and eighty (180) days after the end of each of its financial years) copies of its annual financial statements for that year which shall contain the income statements and balance sheets and which are audited and certified without any qualification by external auditors appointed by the Issuer or the Kafalah Provider, as the case may be; as soon as they become available (and in any event within ninety (90) days after the end of each of its half year financial period in accordance with the reporting format as required by Bursa Securities in the case of the Kafalah Provider) copies of its unaudited half yearly financial statements for that period (as announced to Bursa Securities in the case of the Kafalah Provider which shall contain the consolidated income statements and balance sheets of the Issuer and the Kafalah Provider); promptly, to the extent permitted by applicable laws, regulations, rules and orders, such additional financial or other information as the Sukuk Trustee may from time to time reasonably request, and also, such information as the Sukuk 31