: X. : 26 June 2013 / Malaysia. : Not applicable. : Resident controlled company.

Transcription

1 1. BACKGROUND INFORMATION Issuer (i) Name : Bumi Armada Capital Malaysia Sdn Bhd ( Issuer ). (ii) Address : Registered Office Level 21, Menara Perak 24, Jalan Perak Kuala Lumpur Malaysia. (iii) (iv) (v) (vi) Business registration number Date and place of incorporation Date of listing, where applicable Status on residence, i.e. whether it is a resident controlled company or non-resident controlled company : X. : 26 June 2013 / Malaysia. : Not applicable. : Resident controlled company. (vii) Principal activities (viii) Board of directors : The Issuer is a special purpose vehicle, which is set up for the purposes of the establishment of an unrated Sukuk issuance programme of up to RM1.5 billion in nominal value under the Shariah principle of Murabahah (via a Tawarruq arrangement) (the Sukuk Programme ) and to issue the Sukuk under the Sukuk Programme ( Sukuk Murabahah ) and to undertake all transactions in relation thereto. : The directors of the Issuer as at 31 January 2014 are as follows: 1. Hassan Assad Basma 2. Shaharul Rezza bin Hassan { / } Page 1 of 43

2 (ix) (x) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders Authorised, issued and paid-up capital : As at 31 January 2014, the shareholder of the Issuer is as follows: Name of Shareholder No. of ordinary shares held Bumi Armada Berhad 2 100% : As at 31 January 2014: Authorised capital: RM400, divided into 400,000 ordinary shares of RM1.00 each. Issued and Paid-up capital: RM2.00 divided into 2 ordinary shares of RM1.00 each. % (xi) Disclosure on 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 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. { / } Page 2 of 43

3 Guarantor (i) Name : Bumi Armada Berhad ( Guarantor or BAB ). (ii) Address : Registered Office Level 21, Menara Perak 24, Jalan Perak Kuala Lumpur Malaysia. (iii) (iv) (v) (vi) Business registration number Date and place of incorporation Date of listing, where applicable Status on residence, i.e. whether it is a resident controlled company or non-resident controlled company : X. : 12 December 1995 / Malaysia. : 21 July : Resident controlled company. (vii) Principal activities (viii) Board of directors : Investment holding. : The directors of BAB as at 31 January 2014 are as follows: 1. Tunku Ali Redhauddin Ibni Tuanku Muhriz 2. Dato Sri Mahamad Fathil bin Dato Mahmood 3. Saiful Aznir bin Shahabudin 4. Alexandra Elisabeth Johanna Maria Schaapveld 5. Andrew Philip Whittle 6. Chan Chee Beng 7. Lim Ghee Keong 8. Hassan Assad Basma 9. Shaharul Rezza bin Hassan { / } Page 3 of 43

4 (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders : As at 31 January 2014, the substantial shareholders of BAB and their respective shareholdings, based on BAB s Register of Substantial Shareholders, are as follows: Names of substantial Direct Indirect shareholders No. of shares % No. of shares % Objektif Bersatu Sdn Bhd 1,239,144, Ombak Damai Sdn Bhd 225,277, Karisma Mesra Sdn Bhd 157,519, Dato Sri Mahamad Fathil bin Dato Mahmood Dato Ahmad Fuad bin Md Ali Datuk Abdul Farish bin Abd Rashid 750, ,277, , ,277, , ,277, Saluran Abadi Sdn Bhd ,001,300 2 Farah Suhanah binti Ahmad Sarji , ,001, Mutu Saluran Sdn Bhd ,239,144, Usaha Tegas Sdn Bhd ,239,144, Pacific States Investment Limited ,239,144, Excorp Holdings N.V ,239,144, PanOcean Management Limited Ananda Krishnan Tatparanandam Amanahraya Trustees Berhad - Skim Amanah Saham Bumiputera Employees Provident Fund Board Notes: ,239,144, ,239,144, ,003, ,268, Deemed interest by virtue of their respective shareholdings in Ombak Damai Sdn Bhd pursuant to Section 6A of the Companies Act, 1965 (the Act ). 2 Deemed interest by virtue of its shareholdings in Saluran Abadi Sdn Bhd s ( SASB ) subsidiaries, Karisma Mesra Sdn Bhd and Wijaya Baiduri Sdn Bhd (collectively, SASB Subsidiaries ) pursuant to Section 6A of the Act. The issued ordinary shares ( Shares ) held via the SASB Subsidiaries are held under discretionary trusts for Bumiputera objects. As such, SASB does not have any economic interest in the Shares held by the SASB Subsidiaries, as such interest is held subject to the terms of such discretionary trusts. 3 Deemed interest by virtue of her shareholding in SASB pursuant to Section 6A of the Act. However, she does not have any economic interest in the Shares held via the SASB Subsidiaries, as such interest is held subject to the terms of the discretionary trusts for Bumiputera objects. See Note (2) above for SASB s deemed interest in the Shares. 4 Deemed interest by virtue of its shareholding in Objektif Bersatu Sdn Bhd pursuant to Section 6A of the Act. 5 Usaha Tegas Sdn Bhd ( UTSB ) is deemed to have an interest in all of the Shares in which Mutu Saluran Sdn Bhd ( MSSB ) has an interest, by virtue of UTSB being entitled to exercise 100% of the votes attached to the { / } Page 4 of 43

5 voting shares of MSSB. See Note (4) above for MSSB s deemed interest in the Shares. 6 Pacific States Investment Limited ( PSIL ) is deemed to have an interest in all of the Shares in which UTSB has an interest by virtue of PSIL being entitled to exercise % of the votes attached to the voting shares of UTSB. See Note (5) above for UTSB s deemed interest in the Shares. 7 The shares in PSIL are held by Excorp Holdings N.V. which is in turn held 100% by PanOcean Management Limited ( PanOcean ). See Note (6) above for PSIL s deemed interest in the Shares. PanOcean is the trustee of a discretionary trust, the beneficiaries of which are members of the family of Ananda Krishnan Tatparanandam ( TAK ) and foundations including those for charitable purposes. Although PanOcean is deemed to have an interest in the Shares, it does not have any economic or beneficial interest over such Shares, as such interest is held subject to the terms of the discretionary trust. 8 TAK is deemed to have an interest in the Shares, by virtue of his deemed interest in PanOcean. See Note (7) above for PanOcean s deemed interest in the Shares. Although TAK is deemed to have an interest in the Shares, he does not have any economic or beneficial interest over such Shares, as such interest is held subject to the terms of the discretionary trust referred to in Note (7) above. (x) (xi) Authorised, issued and paid-up capital Disclosure on the following: If BAB 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 application; and If BAB 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. : As at 31 January 2014: Authorised capital: RM800,000, divided into 4,000,000,000 ordinary shares of RM0.20 each. Issued and Paid-up capital: RM586,360, divided into 2,931,800,900 ordinary shares of RM0.20 each. : None. { / } Page 5 of 43

6 2. PRINCIPAL TERMS AND CONDITIONS Names of parties involved in the proposal, where applicable (i) Principal adviser : Maybank Investment Bank Berhad ( Maybank IB ). (ii) Lead arranger : Maybank IB. (iii) Co-arranger : Not applicable. (iv) Solicitors : Zaid Ibrahim & Co. (legal counsel to the Principal Adviser/Lead Arranger). (v) Financial adviser : Not applicable. (vi) Technical adviser : Not applicable. Zul Rafique & partners (legal counsel to the Issuer and BAB). (vii) Sukuk trustee (viii) Shariah adviser : Pacific Trustees Berhad. : Maybank Islamic Berhad ( MIB ). (ix) Guarantor : BAB. (x) Valuer : Not applicable. (xi) Facility agent : Maybank IB. (xii) Primary subscriber (under a bought-deal arrangement) and amount subscribed (xiii) Underwriter and amount underwritten (xiv) Central depository (xv) Paying agent (xvi) Reporting accountant (xvii) Calculation agent : The primary subscriber (if any) will be determined prior to issuance. : Not applicable. : Bank Negara Malaysia ( BNM ). : BNM. : Not applicable. : Not applicable. { / } Page 6 of 43

7 (xviii) Others (please specify) : Lead Manager For the first issue For any subsequent issue(s) : Maybank IB and/or any party or parties as may be appointed by the Issuer from time to time. : Any party or parties as may be appointed by the Issuer from time to time. Commodity Trading Participant ( CTP ) MIB or such other CTP as may be designated by the Issuer and acceptable to the Lead Arranger. Subscriber There may be one or more subscribers each of whom will be identified prior to the issuance of the Sukuk Murabahah (as defined below) (the Subscriber(s) ). Islamic principles used : Murabahah (via a Tawarruq arrangement) which is one of the Shariah principles and concepts approved by the Securities Commission Malaysia ( SC ) s Shariah Advisory Council ( SAC ). (c) Facility description : Proposed issuance of Sukuk Murabahah pursuant to the Sukuk Programme. The issuance of each Series (as defined below) of the Sukuk Murabahah under the Sukuk Programme shall be effected as follows: Underlying Transactions 1. The Sukuk Trustee, on behalf of the investors of the Sukuk Murabahah ( Sukukholders ), and the Facility Agent shall enter into an agency agreement ( Agency Agreement ), pursuant to which the Facility Agent is appointed as the wakeel (agent) of the Sukukholders (in such capacity, the Purchase Agent ) for the purchase and sale of Shariah-compliant commodities which would exclude ribawi items in the category of medium of exchange such as currency, gold and silver ( Commodities ) from time to time. 2. Pursuant to a commodity Murabahah master agreement ( Commodity Murabahah Master Agreement ), the Issuer (as Purchaser ) shall from time to time issue a purchase order for the required Commodities ( Purchase Order ) in relation to the said Series to the Purchase Agent. In the Purchase Order, the Purchaser will request { / } Page 7 of 43

8 the Purchase Agent to purchase the Commodities and will irrevocably undertake to purchase the Commodities from the Sukukholders of the said Series via the Purchase Agent at the deferred sale price, which shall be equivalent to the Purchase Price plus the sum of all profit payments under that Series ( Deferred Sale Price ). 3. Based on the Purchase Order, the Purchase Agent (pursuant to an agreement ( CTP Purchase Agreement ) entered into between the Purchase Agent and the CTP for that Series), appoints the CTP to purchase on a spot basis the Commodities from commodity vendor(s) in the Bursa Suq Al-Sila commodity market at a purchase price ( Purchase Price ) which shall be an amount equivalent to the proceeds for that Series. (c) The Commodities shall pass from the commodity vendor(s) to the CTP, held for the benefit of the Sukukholders. The Purchase Price shall be in line with the asset pricing requirements stipulated in the Guidelines on Sukuk (revised and effective on 8 January 2014) issued by the SC as may be amended from time to time ( Sukuk Guidelines ). 4. The Issuer shall then issue the Sukuk Murabahah to the Sukukholders where the Sukuk Murabahah shall evidence, amongst others, the Sukukholders ownership of the Commodities and subsequently once the Commodities are sold to the Purchaser, the Sukukholders entitlement to receive the Deferred Sale Price. The proceeds of the Sukuk Murabahah shall be used to pay the Purchase Price. 5. Thereafter, pursuant to a sale and purchase(s) agreement ( Sale and Purchase Agreement ), the Purchase Agent (on behalf of the Sukukholders) shall sell the Commodities to the Purchaser at the Deferred Sale Price. 6. Upon completion of such purchase, the Purchaser (pursuant to an agreement ( CTP Sale Agreement ) entered into between the Purchaser and the CTP for that said Series) { / } Page 8 of 43

9 (c) appoints the CTP to sell the Commodities to Bursa Malaysia Islamic Services Sdn Bhd ( BMIS ) (through the CTP) on a spot basis. The CTP Sale Agreement will provide for the CTP (on behalf of the Purchaser) to directly sell the Commodities to BMIS upon notice by the Purchase Agent that the Sale and Purchase Agreement has been completed and executed. Proceeds raised from such sale of Commodities will be remitted to the Issuer. The sale of the Commodities to BMIS shall be in consideration of an amount equal to the Purchase Price. The Commodities shall pass from the CTP (acting on behalf of the Purchaser) to BMIS. 7. The Sukuk Murabahah may be issued with or without periodic payments. During the tenure of the Sukuk Murabahah, the Purchaser shall make payment of the Deferred Sale Price periodically (in the case of Sukuk Murabahah with periodic payments, which such periodic payments shall be referred to as Periodic Payments (as defined in item 2(i) below) and final payment of the nominal value on the date of maturity of the Sukuk Murabahah ( Maturity Date ) to the Sukukholders. Upon the declaration of an Event of Default in respect of a particular Series of Sukuk Murabahah, the Purchaser shall pay all amounts then outstanding on the Deferred Sale Price of that Series of Sukuk Murabahah as a final settlement of the same (subject to the Rebate (Ibra ) as set out below, where applicable), for the redemption of that Series of Sukuk Murabahah, following which the Sukuk Murabahah of that Series shall be cancelled. The Rebate (Ibra ) (pursuant to the declaration of an Event of Default in respect of a particular Series of Sukuk Murabahah) shall be the unearned profit to the Sukukholders of that Series of Sukuk Murabahah from the date of redemption of that Series of Sukuk Murabahah upon the declaration of an Event of Default up to the Maturity Date of that Series of Sukuk Murabahah. The redemption amount payable ( Redemption { / } Page 9 of 43

10 Amount ) by the Issuer on the declaration of an Event of Default in respect of a particular Series of Sukuk Murabahah is an amount calculated by the Facility Agent in accordance with the formula below: Redemption Amount is the amount equivalent to the Deferred Sale Price as at the Issue Date less the aggregate of Periodic Payments paid (if any) less the Rebate (Ibra ) (if any), all in respect of that Series of Sukuk Murabahah. Issue Date means in relation to any Sukuk Murabahah, the date on which the Sukuk Murabahah are issued. Series means in relation to any Sukuk Murabahah, such Sukuk Murabahah with the same Issue Date and Maturity Date. 8. All the Issuer s payment obligations under the Sukuk Murabahah shall be unconditionally and irrevocably guaranteed by BAB as guarantor, pursuant to the Guarantee (as defined in item 2(l) below). The Guarantee extends to all payment obligations of the Issuer under the Sukuk Murabahah including the Periodic Payments. Hence, the Sukuk Trustee shall be entitled to make a demand under the Guarantee on any default in payment by the Issuer. The transaction structure is illustrated in Annexure 1. (d) Identified Assets : Shariah-compliant commodities available at Bursa Suq Al-Sila which will be identified, from time to time, at or around the time of issuance of the Sukuk Murabahah. (e) Purchase and selling price/rental (where applicable) : The Purchase Price will be equivalent to the proceeds for the relevant Series under the Sukuk Programme. The Deferred Sale Price will be equivalent to the Purchase Price plus the sum of all profit payments under the relevant Series under the Sukuk Programme. The Purchase Price and the Deferred Sale Price will be determined prior to issuance of each Series of Sukuk Murabahah. (f) Issue/sukuk programme size : The aggregate nominal value of outstanding Sukuk Murabahah issued under the Sukuk Programme at any one time shall not exceed RM1.5 billion in nominal value. { / } Page 10 of 43

11 The Issuer shall have the option to upsize the limit of the Sukuk Programme, subject to the approval of the SC. (g) Tenure of issue/sukuk programme : Sukuk Programme Tenure The Sukuk Programme shall have a tenure of up to thirty (30) years from the date of issuance of the first Series of Sukuk Murabahah under the Sukuk Programme. (h) Availability period of sukuk programme Issue Tenure The tenure of the Sukuk Murabahah shall be more than one (1) year and up to thirty (30) years as the Issuer may determine, provided always that the maturity of the Sukuk Murabahah shall not exceed the Sukuk Programme Tenure. : The period commencing from the date of first issuance under the Sukuk Programme up to the expiry of the Sukuk Programme Tenure, whereby the first issuance shall be made within two (2) years from the date of authorisation by SC and the last issuance shall be made no later than twenty nine (29) years from the first issuance. (i) Profit/coupon/rental rate : For Sukuk Murabahah with periodic payments, the Sukuk Murabahah will bear profit ( Periodic Payments ) at a rate as may be agreed between the Issuer and the relevant Lead Manager(s). The profit rate ( Periodic Payments Rate ) shall be determined prior to the issuance of such Sukuk Murabahah. Not applicable for Sukuk Murabahah without Periodic Payments. (j) (k) Profit/coupon/rental payment frequency Profit/coupon/rental payment basis : For Sukuk Murabahah with Periodic Payments, the frequency of Periodic Payments shall be semi-annual or such other period to be agreed between the Issuer and the relevant Lead Manager(s) prior to the issuance of such Sukuk Murabahah. Not applicable for Sukuk Murabahah without Periodic Payments. : For Sukuk Murabahah with Periodic Payments, the Periodic Payments of the Sukuk Murabahah shall be calculated on the basis of the actual number of days in the relevant period divided by 365 (actual/365 days) and in any event, in accordance with the MyClear Rules and { / } Page 11 of 43

12 Procedures (as defined in item 2(p) below). Not applicable for Sukuk Murabahah without Periodic Payments. (l) Security/collateral, where applicable : Clean. However, all the Issuer s payment obligations under the Sukuk Murabahah shall be unconditionally and irrevocably guaranteed by BAB as guarantor, pursuant to a guarantee ( Guarantee ) to be provided by BAB. (m) Details on utilisation of proceeds by issuer/obligor and originator (in the case of ABS). If proceeds are to be utilised for project or capital expenditure, description of the project or capital expenditure, where applicable : The Issuer shall utilise the proceeds for Shariah compliant purposes (i) to finance the capital expenditure, working capital, general funding and financing requirements and general corporate purposes of the Group, including start-up and investment costs for the Group s projects; (ii) to refinance the Group s indebtedness (including Islamic financing); and (iii) to finance profit, fees and expenses relating to the Sukuk Programme and the Sukuk Murabahah. Group means BAB and its subsidiaries from time to time. (n) Sinking fund and designated accounts, where applicable : None. (o) Rating: Credit ratings assigned and 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 credit rating agencies : : The Sukuk Programme shall be unrated. Not applicable. (p) Mode of issue : The Sukuk Murabahah may be issued via private placement and/or book building on a best effort basis, as the Issuer may elect. Issuance of the Sukuk Murabahah under the Sukuk Programme shall be in accordance with the (1) the Participation and Operation Rules for Payment and Securities Services issued by Malaysian Electronic { / } Page 12 of 43

13 Clearing Corporation Sdn Bhd ( MyClear ) ( MyClear Rules ) and (2) the Operational Procedures for Securities Services issued by MyClear ( MyClear Procedures ), each as amended or substituted from time to time (collectively, MyClear Rules and Procedures ). (q) (r) (s) Selling restriction, including tradability, i.e. whether tradable or non-tradable 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 : The Sukuk Murabahah shall not be offered, sold, transferred or otherwise disposed, directly or indirectly other than to persons falling within any of the categories of persons or in the circumstances specified under: Schedule 6 (or Section 229(1)); and Schedule 7 (or Section 230(1)), read together with Schedule 9 (or Section 257(3)) of the CMSA, and Section 4(6) of the Companies Act, 1965 of Malaysia. Tradability The Sukuk Murabahah shall be non-tradable and nontransferable. CMSA means the Capital Markets and Services Act 2007, as amended from time to time. : The Sukuk Murabahah may be listed on Bursa Malaysia Securities Berhad (under exempt regime). : None. (t) Conditions precedent : 1. Conditions precedent for the establishment of the Sukuk Programme shall be the following: Main Documentation The execution of the Transaction Documents (as defined in item 2 (y) (viii) and, where applicable, duly endorsed as exempted under the Stamp Duty Exemption (No. 23) Order The Issuer Receipt from the Issuer of: (i) Certified true copies of the Issuer s Certificate of Incorporation and the Memorandum and Articles of Association; (ii) Certified true copies of the latest Forms 24, { / } Page 13 of 43

14 (c) (d) (iii) (iv) (v) (vi) BAB 44 and 49 of the Issuer; Certified true copy of the board resolution of the Issuer authorising, among others, the issuance of the Sukuk Murabahah and the execution of the Transaction Documents; A list of the Issuer s authorised signatories who are authorised to sign the Transaction Documents and to issue notices in relation to the Sukuk Murabahah on behalf of the Issuer, and their respective specimen signatures; A report of the relevant company search of the Issuer; and A report of the relevant winding up search conducted on the Issuer confirming that the Issuer has not been wound up. Receipt from BAB of: (i) Certified true copies of BAB s Certificate of Incorporation and Memorandum and Articles of Association; (ii) Certified true copies of the latest Forms 24, 44 and 49 of BAB; (iii) (iv) (v) (vi) General (i) Certified true copy of the board resolution of BAB authorising, among others, the execution of the Transaction Documents to which BAB is a party; A list of BAB s authorised signatories who are authorised to sign all Transaction Documents to which it is party and to issue notices in relation to the Sukuk Murabahah on behalf of BAB, and their respective specimen signatures; A report of the relevant company search of BAB; and A report of the relevant winding up search conducted on BAB confirming that BAB has not been wound up. Written authorisation from the SC in respect of the Sukuk Programme having been obtained; { / } Page 14 of 43

15 (ii) (iii) (iv) (v) Satisfactory legal opinion from the Principal Adviser/Lead Arranger s Solicitors advising with respect to, among others, the legality, validity and enforceability of the Transaction Documents and that all the conditions precedents in relation to the Transaction Documents have been duly fulfilled or waived (as the case may be); Confirmation from the Shariah Adviser that the structure and mechanism together with the Transaction Documents of the Sukuk Programme are in compliance with Shariah, have been obtained; Evidence that arrangements have been made for the payment of such fees, costs and expenses in relation to the establishment of the Sukuk Programme to the extent that the same are due and payable before the establishment of the Sukuk Programme; and Such other conditions precedent to be mutually agreed between the Principal Adviser/Lead Arranger and the Issuer. 2. Conditions Precedent for each issuance of the Sukuk Murabahah: Each issuance of the Sukuk Murabahah shall be subject to certain conditions, to be mutually agreed between the Principal Adviser/Lead Arranger and the Issuer, including a condition that no Event of Default has occurred or which would occur if the relevant issuance is made. (u) Representations and warranties : The Issuer and/or the Guarantor (as the case may be) shall make the following representations and warranties: 1. Each of the Issuer, the Guarantor and the Principal Subsidiaries is a company with limited liability duly incorporated and validly existing under the laws of Malaysia or, as the case may be, the laws of the jurisdiction in which it is incorporated or organised, and has full power to carry on its business as it is being conducted. 2. All necessary corporate and other relevant actions have been taken to authorise, and all relevant consents and approvals of any administrative, governmental or other authority or body in Malaysia which are required to authorise the { / } Page 15 of 43

16 Issuer and the Guarantor to execute and deliver, and perform the transactions contemplated in the Transaction Documents in accordance with their terms, have been duly obtained and are in full force and effect. 3. The entry into and performance by the Issuer and the Guarantor of, and the transactions contemplated by, the Transaction Documents do not and will not conflict with: any existing law or regulation applicable to the Issuer or the Guarantor, as the case may be, which would have a Material Adverse Effect; the Issuer s or the Guarantor s respective constitutional documents; or (c) any existing agreement or instrument binding upon the Issuer or any of the Issuer s assets or the Guarantor or any of the Guarantor s assets, as the case may be, which will have a Material Adverse Effect or a material adverse effect on the validity and enforceability of the Transaction Documents or the right or remedies of any party under the Transaction Documents. 4. Subject to the Legal Reservations, 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 Guarantor, as the case may be, enforceable in accordance with its terms. 5. The audited consolidated financial statements (including the income statement and balance sheet) of the Group for each financial year end and the most recently published unaudited interim consolidated financial statements of the Group, have been prepared in accordance with GAAP consistently applied and give a true and fair view of the consolidated financial position of the Group as of the end of the relevant financial year to which they apply at that date. 6. To the best of the Issuer s/guarantor s knowledge, no Event of Default has occurred and is continuing and no Event of Default would occur following each issuance of Sukuk Murabahah, and as far as { / } Page 16 of 43

17 the Issuer/Guarantor is aware, no event which with the giving of notice of the lapse of time or other condition would constitute an Event of Default, has occurred, and no such event would occur following each issuance of Sukuk Murabahah. 7. No litigation, arbitration or administrative proceedings against the Issuer, the Guarantor or any of the Principal Subsidiaries is current or as far as the Issuer/Guarantor is aware, threatened against any of them, which would have a Material Adverse Effect. 8. To the best of the Issuer s and the Guarantor s knowledge, all material information (other than third party information) provided by the Issuer and the Guarantor in writing in connection with the issuance of the Sukuk Murabahah and for the purposes of the Information Memorandum was complete, true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated. 9. Upon issue, the Sukuk Murabahah will constitute direct, unconditional, unsubordinated and unsecured obligations of the Issuer and will rank pari passu among themselves and equally with all other present and future unsecured and unsubordinated obligations of the Issuer, subject to those liabilities and obligations which are preferred by law or operation of law (which includes rights of set-off and liens). 10. The Guarantee will constitute direct, unconditional, and unsecured obligations of the Guarantor and will rank at least pari passu with all other present and future unsecured and unsubordinated obligations of the Guarantor, subject to those liabilities and obligations which are preferred by law or operation of law (which includes rights of set-off and liens). The Issuer and the Guarantor shall: make the representations and warranties set out in this paragraph on the date of the execution of the Transaction Documents; and make the Repeating Representations on each Issue Date and on each date the Information Memorandum is revised, supplemented or { / } Page 17 of 43

18 amended. The Issuer and the Guarantor shall be deemed to represent and warrant to the Sukuk Trustee for the benefit of the Sukukholders that the representations and warranties contained herein are true and accurate in all material respects when made or deemed to be made by reference to the facts and circumstances then existing. For the purposes of these Principal Terms and Conditions: Legal Reservations means: (c) (d) the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to bankruptcy, insolvency, moratorium, reorganisation and other laws now or hereafter generally affecting the rights of creditors; the time barring of claims under statutes of limitation, the possibility that an undertaking to assume liability for, or indemnify a person against, non-payment of stamp duty may be void and defences of set off or counterclaim; similar principles, rights and defences under the laws of any Relevant Jurisdiction; and the effects of the possible judicial application of foreign laws or foreign governmental or judicial action affecting creditors' rights and, with respect to enforceability of indemnification provisions, considerations of public policy. Material Adverse Effect means an effect which: is materially adverse on the ability of the Issuer or the Guarantor to perform their material obligations under the Transaction Documents; or is materially adverse to the financial condition and results of operations of the Group, whether or not arising from transactions in the ordinary course of business. Principal Subsidiary" means at any time a subsidiary of BAB whose total assets (consolidated in the case of a subsidiary which itself has subsidiaries) represent not less than 5% of the consolidated total assets of the Group, in each case calculated by reference to the then latest: { / } Page 18 of 43

19 audited financial statements of such subsidiary (consolidated in the case where such subsidiary has subsidiaries); and audited consolidated financial statements of the Group. Relevant Jurisdiction means, in relation to each of the Issuer, the Guarantor and the Principal Subsidiary: (c) its jurisdiction of incorporation; any jurisdiction where any assets owned by it is situated; and any jurisdiction where it conducts its business. Repeating Representations means those representations and warranties contained in paragraphs (1) to (4) above. The term subsidiary shall have the meaning given to it under Section 5 of the Companies Act (v) Events of default, dissolution event and enforcement event, where applicable : The following shall be events of default (each an Event of Default ) in respect of each Series of Sukuk Murabahah: 1. The Issuer or the Guarantor (as the case may be) fails to pay any amount due under the Sukuk Murabahah, and such failure is not remedied within three (3) business days, from the due date or date of demand, as the case may be. 2. Any representation or warranty made or given by the Issuer and/or the Guarantor 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 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, where such event would have a Material Adverse Effect, unless circumstances giving rise to the misrepresentation are capable of remedy and the Issuer or the Guarantor (as the case may be) does not remedy such misrepresentation after a period of thirty (30) days (or such longer period as the Sukuk Trustee may permit) from the Issuer s or the Guarantor s receipt of written notice from the Sukuk Trustee requiring the same to be remedied. { / } Page 19 of 43

20 3. Any of the Issuer or the Guarantor (as the case may be) fails to observe or perform its obligations under any of the Transaction Documents to which it is a party other than an obligation of the type referred to in paragraphs (1) and (2) above and such failure would have a Material Adverse Effect, and in the case of a failure which is capable of being remedied, the Issuer or the Guarantor (as the case may be) does not remedy the failure within a period of thirty (30) days (or such longer period as the Sukuk Trustee may permit) after the Issuer or Guarantor (as the case may be) having been notified in writing by the Sukuk Trustee requiring the same to be remedied. 4. The Guarantee ceases to be, or is claimed by the Guarantor not to be, in full force and effect. 5. If: (c) (d) any Indebtedness (as defined below) of the Issuer, BAB or any Principal Subsidiary, other than the indebtedness pursuant to the Sukuk Programme, becomes capable of being declared due or payable prematurely by reason of an event of default (however described); the Issuer, BAB or any Principal Subsidiary fails to make any payment in respect of any Indebtedness on the due date for payment as extended by any originally applicable grace period; any security given by the Issuer, BAB or any Principal Subsidiary for any Indebtedness becomes enforceable; or default is made by the Issuer, BAB or any Principal Subsidiary in making any payment due under any guarantee and/or indemnity given by it in relation to any Indebtedness of any other person, provided that no event described in this subparagraph 2(v)(5) shall constitute an Event of Default unless: (i) in the case of, and (d) above the relevant amount of Indebtedness (other than Indebtedness incurred in respect of Non- Recourse Project Financing) or other relative liability due and unpaid, amounts to at least RM120,000,000 (or its equivalent in any other currency) either alone or when aggregated { / } Page 20 of 43

21 (without duplication) with all other amounts of Indebtedness (other than Indebtedness incurred in respect of Non-Recourse Project Financing); (ii) in the case of, and (d) above the relevant amount of Indebtedness incurred in respect of Non-Recourse Project Financing or other relative liability due and unpaid, amounts to at least RM225,000,000 (or its equivalent in any other currency) either alone or when aggregated (without duplication) with all other amounts of Indebtedness incurred in respect of Non-Recourse Project Financing, provided that the aggregate of Indebtedness or other relative liability due and unpaid contemplated in (i) and (ii) does not exceed RM225,000,000 at any point in time; and (iii) in the case of (c) above, the relevant amount of Indebtedness in respect of which such security has become enforceable amounts to at least ten per cent. (10%) of the consolidated total assets of BAB and its Subsidiaries taken as a whole (calculated by reference to the then latest audited accounts of the Group) either alone or when aggregated (without duplication) with all other amounts of Indebtedness in respect of which such security has become enforceable. 6. Save for any petition, proceedings or procedure which is of a frivolous or vexatious nature, if: (c) any step is taken or a petition is presented for the winding up, dissolution or liquidation of the Issuer, the Guarantor or any Principal Subsidiary; or a resolution is passed for the winding up of the Issuer, the Guarantor or any Principal Subsidiary; or the Issuer, the Guarantor or any Principal Subsidiary becomes capable of being dissolved under applicable laws, except, in the case of a Principal Subsidiary only, for the purpose of and followed by a reconstruction, amalgamation, reorganisation, merger or consolidation (a Reorganisation ) (A) on terms approved in writing by the Sukuk Trustee or (B) whereby, pursuant to such Reorganisation, the assets and undertaking of such Principal Subsidiary are otherwise transferred to or vested in the Guarantor or one or more of its Subsidiaries; { / } Page 21 of 43

22 (d) (e) or if any other proceedings are initiated against the Issuer, the Guarantor or any Principal Subsidiary under any applicable liquidation, insolvency, composition, reorganisation or other similar laws or an application is made (or documents filed with a court) for the appointment of an administrative or other receiver, manager, administrator or other similar official, or an administrative or other receiver, manager, administrator or other similar official is appointed, in relation to the Issuer, the Guarantor or any Principal Subsidiary or, as the case may be, in relation to the whole or a substantial part of the undertaking or assets of any of them, and in the case of such petition, proceedings or procedure referred to in paragraphs, (c), (d) and (e) above, such petition, proceedings or procedure is not discharged, stayed or dismissed within ninety (90) days from the date of service of such petition or commencement of proceedings or other procedure. 7. An encumbrancer takes possession of, the whole or a substantial part of the undertaking or assets of the Issuer, Guarantor or any Principal Subsidiary (as the case may be), or a distress, execution, attachment, legal process, sequestration or any form of execution is levied, enforced upon, sued out or put in force against the whole or a substantial part of the undertaking or assets of the Issuer, Guarantor or any Principal Subsidiary (as the case may be) and such action is not withdrawn or discharged within ninety (90) days from the commencement of such action. 8. Any of the Issuer, the Guarantor or any Principal Subsidiary fails to satisfy any judgement involving liabilities in each case exceeding RM120,000,000 (or its equivalent in any other currency) passed against it by any court of competent jurisdiction (excluding those liabilities in which it is confirmed that takaful/insurance coverage can be claimed) which is enforceable against it in Malaysia and such failure would have a Material Adverse Effect, provided that such failure would not constitute an { / } Page 22 of 43

23 Event of Default if within thirty (30) days after the judgment or order is made, necessary action is taken to contest the judgment or order, or such judgment or order is discharged or stayed within thirty (30) days after the judgment or order is made. 9. The Issuer, the Guarantor or any Principal Subsidiary (as the case may be): (c) (d) convenes a meeting with its creditors generally (or any class of its creditors) (other than a meeting of the Sukukholders pursuant to the Sukuk Programme) to consider a proposal for or proposes or makes any arrangement in respect of any part of its indebtedness including any scheme of arrangement or composition; takes any proceedings or other steps, with a view to a rescheduling or deferral of any of its indebtedness with its creditors generally (or any class of its creditors) or a moratorium is agreed or declared by a court of competent jurisdiction in respect of or affecting any part of its indebtedness with its creditors generally (or any class of its creditors); or makes any conveyance or assignment for the benefit of its creditors generally (or any class of its creditors) in respect of all or any of its indebtedness; or has instituted against it, a scheme of arrangement under Section 176 of the Companies Act 1965 in respect of or affecting all or a substantial part of its indebtedness, which in each case is not withdrawn or discharged within thirty (30) days of such proceeding, step or action (other than for the purposes of and followed a solvent reconstruction or by a reconstruction previously approved in writing by the Sukuk Trustee, unless during or following such reconstruction the Issuer, Guarantor or any Principal Subsidiary (as the case may be) becomes or is declared to be insolvent). 10. Any of the Issuer, the Guarantor or any Principal Subsidiary is unable to, or admits inability to, pay any of its debts (or a class of its debts) as they fall { / } Page 23 of 43

24 due or suspends or threatens to suspend, making payments with respect to all or any class of its debts (save for payment under any permitted subordinated debts or securities where it has the right to defer payment pursuant to the terms of such debts or securities), provided that such inability to pay or suspension of making payment shall not constitute an Event of Default if the Issuer, Guarantor or Principal Subsidiary pays or discharges such debt or obligation within thirty (30) days or disputes such debt or obligation in good faith. 11. At any time, it is or will become unlawful for the Issuer or the Guarantor to perform or comply with any of its payment obligations under or in respect of the Sukuk Murabahah or any of the Transaction Documents to which the Issuer or the Guarantor is a party to (as the case may be); or any of the material provisions of the Transaction Documents or any of the Sukuk Murabahah ceases for any reason (or is claimed by the Issuer or the Guarantor) to be in full force and effect or ceases to constitute valid and legally binding obligations of the Issuer or the Guarantor, or ceases to be enforceable in accordance with its terms. 12. (i) Any of the assets, revenues or undertakings of the Issuer, the Guarantor or any Principal Subsidiary is condemned, seized, nationalised, expropriated or compulsorily acquired by any person acting under the authority of any national, regional or local governmental body or (ii) the Issuer, the Guarantor or any Principal Subsidiary is prevented by any such person from exercising normal control over any part of its undertaking, assets and revenues which in each case would have a Material Adverse Effect, other than where such condemnation, seizure, nationalisation, expropriation, compulsory acquisition or prevention of exercising normal control: is being disputed in good faith by the Issuer, the Guarantor or any Principal Subsidiary (as the case may be); and such condemnation, seizure, nationalisation, expropriation, compulsory acquisition or prevention of exercising normal control is overturned and all such assets and undertakings are returned to the Issuer, { / } Page 24 of 43

25 Guarantor or Principal Subsidiary (as the case may be) and the Issuer, Guarantor or Principal Subsidiary (as the case may be), resumes normal control over all of its undertaking, assets and revenues within sixty (60) days of such seizure, nationalization, expropriation, compulsory acquisition or prevention of exercising normal control occurring. 13. Where there is a revocation, withholding, invalidation or modification of any license, authorisation, approval or consent that impairs or prejudices the Issuer s or the Guarantor s ability to comply with the terms and conditions of the Sukuk Programme or the Transaction Documents, or where there is a revocation, withholding, invalidation or modification of any license, authorisation, approval or consent of any Principal Subsidiary which would have a Material Adverse Effect. 14. The Issuer, the Guarantor or any Principal Subsidiary (as the case may be) ceases or threatens to cease the operation of any part of its business which it presently conducts and such event has a Material Adverse Effect. 15. Any event or events (other than events mentioned in paragraphs (1) to (14) above) has or have occurred or a situation exists which has a Material Adverse Effect, and in the case of the occurrence of such event or situation which is capable of being remedied, the Issuer does not remedy it within a period of thirty (30) days after the Issuer became aware or having been notified in writing by the Sukuk Trustee of the event or situation, Provided That in respect of any event described in paragraphs 2(v)(1) to (15) above which is applicable to Principal Subsidiaries, no event affecting any Principal Subsidiary shall be deemed as an Event of Default if such event does not have a material adverse effect on the ability of the Issuer or the Guarantor to make payment obligations under the Sukuk Murabahah or the other Transaction Documents. Upon the occurrence of an Event of Default which is continuing under any Series ( Defaulted Series ), the Sukuk Trustee may at its discretion or, upon the { / } Page 25 of 43

26 instruction of the Sukukholders of the Defaulted Series, declare that an Event of Default has occurred with respect to the Defaulted Series and the Sukuk Trustee is entitled to enforce its rights under the Transaction Documents (including the Guarantee) in relation to the Defaulted Series including, but not limited to, accelerating the payment of the Redemption Amount in relation to the Defaulted Series and making a demand under the Guarantee if the Issuer fails to pay the Redemption Amount. For purposes of paragraphs 2(v)(1) to (15) above only, a reference to Sukuk Murabahah, Sukukholders and Transaction Documents shall refer to the Sukuk Murabahah of a particular Series, the Sukukholders of that particular Series and the Transaction Documents in so far as they relate to that particular Series, respectively. For the purposes of these Principal Terms and Conditions: Indebtedness means any indebtedness including Islamic financing (whether being principal, premium, profit/interest or other amounts) for or in respect of any notes, bonds, debentures, debenture stock, loan stock or other securities or any borrowed money or any liability under or in respect of any acceptance or acceptance credit, but excluding any indebtedness pursuant to the Sukuk Programme. Non-Recourse Project Financing means any Project Financing incurred or assumed by the Issuer, any Principal Subsidiary or any affiliate of the Group (a Project Financing Arrangement ) under which Project Financing Arrangement either there is no financial recourse to BAB or any financial recourse to BAB originally provided for in respect of such Project Financing Arrangement has expired and has been released in accordance with the terms of such Project Financing Arrangement. Project Financing means any indebtedness incurred or assumed pursuant to any financing arrangement entered into by any Group member or any affiliate of the Group: for the purpose of financing the cost of (i) the acquisition, purchase, construction, refurbishment, conversion and/or ownership of any property or assets (including, without limitation, the equipping, { / } Page 26 of 43

27 alteration, repair or improvement of such property or assets), and/or (ii) the acquisition, development or redevelopment of any project, venture or asset; and which financing arrangement relies on the cash flow of that project, property, venture or asset or the value of the project, property, venture or asset, or both as the principal means of repayment of such financing arrangement, as the same may be renewed or refinanced from time to time, provided that such renewal or refinancing is pursuant to a financing arrangement which satisfies items and of this definition. (w) Covenants (i) Financial Covenants : The Issuer shall ensure that: where: the ratio of Group Net Debt to Group EBITDA shall not exceed 7.5 times throughout the tenure of the Sukuk Programme. the ratio of Group EBITDA to Group Interest Expense shall not be less than 2.0 times throughout the tenure of the Sukuk Programme. Cash and Cash Equivalents means all available cash balance standing to the credit of all bank accounts opened and maintained with licensed financial institutions in any jurisdiction in the name of any member of the Group, or to which such member of the Group is beneficially entitled, and the following on an aggregate basis of the Group: negotiable certificates of deposit and/or repurchase agreements (REPO) and/or time deposits or similar instrument issued by commercial banks or licensed financial institutions; (c) promissory notes, banker s acceptances, bills and other money market instruments with tenors less than twelve (12) months issued by commercial banks or licensed financial institutions; any sukuk, bonds, treasury bills, debt instruments or other investment in marketable debt obligations issued or guaranteed by any government, with remaining maturity of not more than twelve (12) months, and if denominated in RM, with a rating of { / } Page 27 of 43