PROPOSED ISSUANCE OF ISLAMIC SECURITIES OF UP TO RM835.0 MILLION IN NOMINAL VALUE UNDER THE SHARIAH PRINCIPLE OF MURABAHAH ( SUKUK MURABAHAH )

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1 PROPOSED ISSUANCE OF ISLAMIC SECURITIES OF UP TO RM835.0 MILLION IN NOMINAL VALUE UNDER THE SHARIAH PRINCIPLE OF MURABAHAH ( SUKUK MURABAHAH ) PRINCIPAL TERMS AND CONDITIONS BACKGROUND INFORMATION 1. Issuer (i) Name Teknologi Tenaga Perlis Consortium Sdn Bhd ( TTPC ). (ii) Address Registered Address: Level U1, Menara Yayasan Tun Razak, 200 Jalan Bukit Bintang, Kuala Lumpur. Principal Place of Business: 5 th Floor, East Wing & Centrelink, Wisma Consplant 2, No. 7, Jalan SS16/1, Subang Jaya, Selangor. (iii) (iv) Business registration no. Date and place of incorporation H. 11 July 1996, Malaysia. (v) Date of listing Not applicable. (vi) Status (resident/nonresidentcontrolled company) Resident-controlled company. (vii) Principal activities Own and operate a 650MW gas-fired combinedcycle independent power plant in Kuala Sungai Baru, Perlis, Malaysia ("Plant" or "Project") to generate and sell electricity to sole offtaker, Tenaga Nasional Berhad ( TNB ). (viii) Board of directors The board of directors of TTPC as at 31 October 2012 were as follows: (i) Datuk Johari Bin Abdul Ghani (Chairman); 1

2 (ii) Dato Ruslan Bin Ali Omar; (iii) Jamel Bin Ibrahim; (iv) Nazariah Binti Ibrahim; (v) Shabaruddin Bin Ibrahim; and (vi) Faudzy Asrafudeen Bin Sayed Mohamed. (ix) Structure of shareholdings and names of shareholders or, in the case of public company, names of all substantial shareholders (x) Authorised and paid-up capital The shareholders and structure of shareholding of the Issuer as at 31 October 2012 are as follows: Name of shareholders No. of shares held Jati Cakerawala 27,200, Sdn Bhd Tenaga Nasional 6,800, Berhad Total 34,000, The authorised and issued and paid-up capital of the Issuer as at 31 October 2012 are as follows: % Authorised capital: RM54,000, divided into: (i) RM50,000, comprising 50,000,000 ordinary shares of RM1.00 each; and (ii) RM4,000, comprising 4,000,000 redeemable non-cumulative preference shares of RM1.00 each. Issued and paid-up capital: RM35,661, divided into: (i) RM34,000, comprising 34,000,000 ordinary shares of RM1.00 each; and (ii) RM1,661, comprising 1,661,618 redeemable non-cumulative preference shares of RM1.00 each. 2

3 2. Names of parties involved in the proposed transaction (where applicable) (i) Joint Principal Advisers ( JPAs ) (i) Affin Investment Bank Berhad ( Affin Investment ); (ii) CIMB Investment Bank Berhad ( CIMB ); (iii) HSBC Amanah Malaysia Berhad ( HSBC ); and (iv) Maybank Investment Bank Berhad ( Maybank IB ). (ii) Joint Lead Arrangers ( JLAs ) Affin Investment, CIMB, HSBC and Maybank IB. (iii) Co-arranger Not applicable. (iv) Solicitor Messrs. Christopher Lee & Co. (v) Financial adviser Messrs. Deloitte &Touche. (vi) Technical adviser Not applicable. (vii) Trustee CIMB Islamic Trustee Berhad (formerly known as CIMB Trustee Berhad). (viii) Guarantor Not applicable. (ix) Valuer Not applicable. (x) Facility agent CIMB. (xi) Primary subscriber (under a bought-deal arrangement) and amount subscribed The primary subscriber (if any) will be determined prior to issuance. (xii) Underwriter and amount underwritten Not applicable. (xiii) Joint Advisers Shariah CIMB Islamic Bank Berhad, HSBC and Maybank Islamic Berhad. (xiv) Central depository Bank Negara Malaysia ( BNM ). 3

4 (xv) Paying agent BNM. (xvi) Reporting accountant (xvii) Calculation agent (xviii) Others (please specify) Messrs. Ernst and Young. Not applicable. Joint Lead Managers Affin Investment, CIMB, HSBC and Maybank IB. Security Agent CIMB. CIMB Bank Berhad (only in relation to the land held under title number PM 1184, Lot 3455, Mukim Kayang, Perlis, as referred to in item 10(iii)(d) below). 3. Facility description (including the description of Islamic principle) Proposed issuance of Islamic securities of up to RM835.0 million in nominal value ( Sukuk Murabahah ). The Sukuk Murabahah shall be issued under the Shariah principle of Murabahah (based on the concept of Tawarruq), which is one of the Shariah principles and concepts approved by the Securities Commission Malaysia ( SC ) s Shariah Advisory Council ( SAC ). Underlying Transaction 1. The Trustee, on behalf of the investors of the Sukuk Murabahah ( Sukukholders ), and the Issuer shall enter into an agreement ( Agency Agreement ), pursuant to which the Issuer is appointed as the 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 ). The Purchase Agent will then appoint the Facility Agent as a sub-agent ( Sub- Purchase Agent ) for the purchase and sale of the Commodities. 2. Pursuant to an agreement ( Commodity Murabahah Master Agreement ), prior to the date on which the relevant series of Sukuk Murabahah is issued, the Issuer (acting as purchaser for itself) will issue a purchase order ( Purchase Order ) in 4

5 relation to the said series to the Purchase Agent and the Sub-Purchase Agent (acting as the sub-agent of the Purchase Agent). In the Purchase Order, the Issuer (acting as purchaser for itself) will request the Purchase Agent and the Sub-Purchase Agent to purchase the Commodities and will irrevocably undertake to purchase the Commodities from the Sukukholders via the Sub-Purchase Agent at the deferred sale price ( Deferred Sale Price ). 3. Based on the Purchase Order, the Sub- Purchase Agent (pursuant to an agreement ( CTP Purchase Agreement ) entered into between the Sub-Purchase Agent and the Commodity Trading Participant ( CTP )), will purchase on a spot basis the Commodities from commodity vendor(s) in the Bursa Suq Al-Sila commodity market through a CTP at a purchase price ( Purchase Price ) which shall be an amount equivalent to the Sukuk Murabahah proceeds for the respective series. The Purchase Price of the Commodities shall be in line with the asset pricing requirement stipulated under the Islamic Securities Guidelines (Sukuk Guidelines) issued by the SC as may be amended from time to time ( Sukuk Guidelines ). 4. The Issuer (acting as the Issuer) shall then issue the Sukuk Murabahah whereby the proceeds thereof shall be used to pay for the Purchase Price. The Sukuk Murabahah shall evidence, amongst others, the Sukukholders ownership of the Commodities and subsequently once the Commodities are sold to the Issuer (as the Purchaser for itself), the Sukukholders entitlement to receive the Deferred Sale Price which shall be the Purchase Price plus the profit margin of the respective series. 5. Thereafter, pursuant to a sale and purchase agreement ( Sale and Purchase Agreement ), the Sub-Purchase Agent (acting on behalf of the PurchaseAgent as wakeel to the Sukukholders) shall sell the Commodities to the Issuer (acting as Purchaser for itself) based on Murabahah principle at the Deferred Sale Price. 5

6 6. Upon completion of such purchase, the Issuer (pursuant to an agreement ( CTP Sale Agreement ) entered into between the Issuer (acting as Purchaser for itself) and the CTP) shall sell the Commodities to Bursa Malaysia Islamic Services Sdn Bhd (through the CTP) on a spot basis for an amount equal to the Purchase Price. The CTP Sale Agreement will provide for the CTP (on behalf of the Purchaser) to directly sell the Commodities to Bursa Malaysia Islamic Services Sdn Bhd upon notice by the Sub-Purchase Agent that the Sale and Purchase Agreement has been completed and executed. 7. During the tenure of the Sukuk Murabahah, the Issuer shall make periodic profit payments ( Periodic Profit Payments ) forming part of the Deferred Sale Price to the Sukukholders. On the date of maturity of the Sukuk Murabahah ( Maturity Date ) or upon the declaration of an Event of Default (as the case may be), the Issuer shall pay all amounts then outstanding on the Deferred Sale Price as a final settlement of the same (subject to the Rebate (Ibra ) as set out below, where applicable) whereupon the redeemed Sukuk Murabahah shall be cancelled. As the Deferred Sale Price is calculated based on the Purchase Price and profit margin up to the Maturity Date, the Sukukholders in subscribing or purchasing the Sukuk Murabahah irrevocably consent to grant such Rebate (Ibra ), if the Sukuk Murabahah is redeemed before the Maturity Date, upon the declaration of an Event of Default. The Rebate (Ibra ) shall be the unearned profit due to the Sukukholders from the date of redemption of the Sukuk Murabahah upon the declaration of an Event of Default up to the Maturity Date. The redemption amount payable ( Redemption Amount ) by the Issuer on the declaration of an Event of Default is an amount as determined by the Facility Agent, which shall be calculated in accordance with 6

7 the formula below: Redemption Amount is the amount equivalent to the Deferred Sale Price determined at the Issue Date less the aggregate of Periodic Profit Payments paid (if any) less the Rebate (Ibra ). Issue Date means in relation to any Sukuk Murabahah, the date on which the Sukuk Murabahah are issued. Please refer to Annexure 1 for the structure diagram of the proposed issuance of Sukuk Murabahah. 4. Issue/ programme size The aggregate outstanding nominal value of Sukuk Murabahah to be issued shall not exceed RM835.0 million. 5. Tenure of issue/ Sukuk programme (or facility) Tenure of the Sukuk Murabahah The Sukuk Murabahah shall be issued in a single issuance and have tenures of between one (1) year and ten and a half (10.5) years from issuance. It is expected that the Sukuk Murabahah will consist of twenty (20) series as per the table below: Series of Sukuk Murabahah Tenure (years) Nominal Value (RM million)

8 Total * Note: The details of the series are subject to change prior to the issuance of the Sukuk Murabahah. 6. Availability period of sukuk programme (or facility) Not applicable. 7. Profit/coupon/ rental rate To be determined prior to the issuance of each series of the Sukuk Murabahah. 8. Profit/ coupon/ rental payment frequency 9. Profit/coupon/rental payment basis The Periodic Profit Payments for such Sukuk Murabahah shall be payable on a semi-annual basis or such period to be determined prior to the issuance of each series of the Sukuk Murabahah ( Periodic Payment Date ). The Periodic Profit Payments shall be calculated based on the actual number of days elapsed and 365 days basis (actual/365 days). 10. Security/ collateral (if any) (i) (ii) (iii) an assignment, and to the extent agreed by counterparties, step-in rights of all the Issuer s present and future rights, interest, title and benefit in and to the Project Agreements (excluding the Technical Support Agreement (as defined below)) to the extent permitted ( Assignment of Project Agreements ); an assignment and charge of all of the Issuer s present and future rights, interest, title and benefit under the Designated Accounts (as defined in item 12 below) and the related credit balances ( Assignment and Charge of Designated Accounts ); a fixed National Land Code charge over the Lands ( Land Charge ). Lands refers to the following lands owned by the Issuer and held under: (a) title number PM 1172, Lot 3453, Mukim Kayang, Perlis; (b) title number PM 1173, Lot 3454, Mukim Kayang, Perlis; (c) title number PN 700, Lot 3456, Mukim 8

9 Kayang, Perlis; and (d) title number PM 1184, Lot 3455, Mukim Kayang, Perlis. (iv) a debenture creating a fixed and floating charge over all assets of the Issuer, both present and future ( Debenture ); and (v) an assignment by Global E-Technic Sdn Bhd ( Global E-Technic ) of its rights, title and interest in and to the Technical Support Agreement (as defined below) ( Assignment of Technical Support Agreement ). The Assignment of Project Agreements, Assignment and Charge of Designated Accounts, Land Charge, Debenture and Assignment of Technical Support Agreement shall collectively be referred to as the Security Documents. 11. Details on utilisation of proceeds Upon receipt of the proceeds, the Issuer shall use the proceeds only for the following Shariahcompliant purposes: (i) redemption of existing Al-Istisna Islamic Securities with outstanding nominal value of RM645.0million. For the purpose of these Principal Terms and Conditions, Al-Istisna Islamic Securities shall mean the Islamic securities issued under the Shariah principle of Al-Istisna with nominal value of RM1,515,000,000.0; (ii) to pay costs related to the issuance of Sukuk Murabahah and all associated costs including costs related to the redemption of the Al-Istisna Islamic Securities, including a sum of RM30, required to be deposited with the Trustee in accordance with the Trust Deed Guidelines; (iii) to fund the Minimum Required Balance (as defined hereunder); and (iv) to the extent that there are remaining proceeds in excess of that required for the foregoing purposes ( Remaining Proceeds ) and so long as obligations pursuant to the Minimum Required Balance are satisfied, any whole or part of the Remaining Proceeds may at the Issuer's sole discretion be deposited into the Distributions Account (as defined herein) for distribution to shareholders or the Operating Account. For the avoidance of 9

10 doubt, the Remaining Proceeds shall only be deposited in the Distributions Account and/or the Operating Account. 12. Sinking fund and designated accounts (if any) The Issuer shall open and maintain the following Shariah-compliant designated accounts: (a) Operating Account; and (b) Finance Service Reserve Account ( FSRA ), (collectively, the Designated Accounts ). The Operating Account shall be solely operated by the Issuer and the FSRA shall be solely operated by the Security Agent. However, upon enforcement of security, the Security Agent shall be the sole signatory of all the Designated Accounts. Operating Account The Operating Account shall be used for the purpose of depositing the following monies: (a) at the Issuer's sole discretion, any part of the Remaining Proceeds; (b) revenues received pursuant to the sale of electricity; (c) proceeds from any Takaful contracts/insurance policies; (d) proceeds of any payments due under the Project Agreements; (e) all compensation paid by any party in respect of or pursuant to any performance bond or by way of damages; (f) proceeds from Permitted Investments and transfers from the FSRA; and (g) any other cash inflows. The monies standing to the credit of the Operating Account shall be utilised by the Issuer to pay the following in the following Priority of Cashflow : (i) fixed and variable operating expenses including fuel expenses, taxes and other payments to be made by the Issuer under the relevant Project Agreements, salaries, general office overheads and administrative expenses; (ii) payment of routine and recurring capital expenditure in connection with the Plant or capital expenditure arising out of the Plant s operations; 10

11 (iii) payment for the Periodic Profit Payments on each relevant Periodic Payment Date; (iv) payment for the redemption of the Sukuk Murabahah on each relevant Maturity Date or upon the declaration of an Event of Default; (v) payment of the Minimum Required Balance (as defined below) or such amount necessary to fulfil the Minimum Required Balance (as defined below) requirement, as the case may be, by transfer to the FSRA; and (vi) dividends and any other payments/distributions to shareholders (by transfer into the Distributions Account), provided that the items stipulated in item 21(iii)(x) are complied with. FSRA The FSRA shall be used for the purpose of depositing cash equivalent to the Minimum Required Balance (as defined below). The Minimum Required Balance in relation to the FSRA shall be equivalent to the aggregate of the next six (6) months finance service (consisting of principal and periodic profit payments) due under the Sukuk Murabahah. The Issuer shall be obliged to deposit additional funds into the FSRA from time to time, to adjust the Minimum Required Balance no later than six (6) months prior to the principal and/or periodic profit payment to fall due (if necessary). Monies in the FSRA may be withdrawn by the Security Agent to the extent that the funds, in accordance with the Priority of Cashflow, are insufficient to meet the Issuer s payment obligations under the Sukuk Murabahah. The Issuer shall, within forty five (45) days of such withdrawal, deposit an amount sufficient to restore the balance standing to the credit of the FSRA, to the Minimum Required Balance. Any amount in excess of the Minimum Required Balance shall be paid into the Operating Account. Any monies standing to the credit of the FSRA may be utilised for dividends and 11

12 other payments or distributions to the Issuer s shareholders, once all payment obligations under the Sukuk Murabahah have been extinguished. 13. Rating Credit rating(s) assigned Name of rating agency The Sukuk Murabahah have been assigned a preliminary rating of AA 1. RAM Rating Services Berhad, its successors and assigns ("RAM Ratings"). 14. Mode of issue The Sukuk Murabahah may be issued via bought deal, private placement on a best effort basis or through bookbuilding on a best effort basis. The Sukuk Murabahah shall be issued in a single issuance in bearer form and constituted by a trust deed to be executed between the Issuer and the Trustee (acting for the Sukukholders), and in accordance with the Operational Procedures for Securities Services issued by Malaysian Electronic Clearing Corporation Sdn Bhd ( MyClear ) ( MyClear Procedures ). 15. Selling restriction, including tradability (i.e. tradable or non-tradable) The Sukuk Murabahah are tradable subject to the following restrictions: Selling Restrictions at Issuance The Sukuk Murabahah shall not be offered, sold, transferred or otherwise disposed of directly or indirectly other than to persons falling within any of the categories of persons or in the circumstances as specified under 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 Capital Markets and Services Act 2007, as amended from time to time ( CMSA ) and Section 4(6) of the Companies Act 1965, as amended from time to time ( Companies Act ). Selling Restrictions after Issuance The Sukuk Murabahah shall not be offered, sold, transferred or otherwise disposed of directly or indirectly other than to persons falling within any of the categories of persons or in the circumstances as specified under Schedule 6 or 12

13 Section 229(1)(b), read together with Schedule 9 or Section 257(3), of the CMSA and Section 4(6) of the Companies Act. 16. Listing status and types of listing 17. Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) The Sukuk Murabahah will not be listed on Bursa Malaysia Securities Berhad or any other stock exchange. Not applicable. 18. Conditions precedent Conditions precedent and conditions subsequent standard for transactions of this nature including but not limited to the following: Conditions Precedent: A. Main Documentation (i) (ii) The Transaction Documents and such other documents as may be advised by the solicitors (and agreed upon by the Issuer) have been executed and, where applicable, stamped and presented for registration (save for the Security Documents and the Transaction Documents in respect of each series of the Sukuk Murabahah and the relevant forms for the purchase and sale of the Commodities); Execution of the Security Documents to be held in escrow; (iii) All relevant notices and acknowledgements (where applicable) and, consents (where applicable) from the relevant counterparties to the Project Agreements which are agreed to be assigned shall have been made or received, as the case may be; and (iv) Receipt from the Issuer, of certified true copies of the Generation Licence, all the executed and stamped Project Agreements, any other supplemental documentation in relation thereto. 13

14 B. Issuer Receipt from the Issuer of: (i) (ii) (iii) certified true copies of its Certificate of Incorporation, and the Memorandum and Articles of Association of the Issuer; certified true copies of the latest Forms 24, 44 and 49 of the Issuer; certified true copies of the board resolutions of the Issuer authorising, among others, the execution of the Transaction Documents to which it is a party and other documents as advised by the legal counsel and which are acceptable to the Issuer; (iv) a list of the Issuer s authorised signatories and their respective specimen signatures; (v) (vi) (vii) a report of the relevant company search of the Issuer; a report of the relevant winding up search of the Issuer with the Department of Insolvency confirming that the Issuer has not been wound up, or the relevant statutory declaration of the Issuer to the same effect; and a report of the relevant land search relating to the Lands. C. General (i) All the required consents, approvals, authorisations in respect of the issuance of the Sukuk Murabahah having been obtained, including but not limited to the approval of the SC and application for the following approvals having been submitted to the relevant authorities: 14 (a) the approval of the State Authority; and (b) the approval of the Minister of Energy, Green Technology and Water ( Minister );

15 (ii) (iii) (iv) (v) (vi) (vi) Certification from the Issuer that no Event of Default having occurred or is continuing or will occur under any of the Project Agreements as a result of the issuance of the Sukuk Murabahah; The Sukuk Murabahah having received a minimum rating of AA 1 from RAM Ratings; Evidence that the Designated Accounts have been opened in accordance with the provisions of the Transaction Documents; Delivery of an irrevocable instruction to the Facility Agent and the Trustee to inter alia pay part of the proceeds of the Sukuk Murabahah to the holders of the existing Al-Istisna Islamic Securities, in settlement of the redemption purchase price and the balance thereof, to be utilised to fund the Minimum Required Balance and to pay the costs related to the issuance of the Sukuk Murabahah and all associated costs, including a sum of RM30, required to be deposited with the Trustee in accordance with the Trust Deed Guidelines; Delivery of an irrevocable undertaking to the Trustee and the Security Agent to inter alia execute all necessary termination agreements, deeds of receipt and reassignment, revocation of powers of attorney and prescribed statutory discharge forms to discharge the security created in favour of the holders of the Al-Istisna Islamic Securities, to complete and perfect the security created under the Security Documents in favour of the Security Agent acting for the Sukukholders, and to do all such acts and things necessary to give effect to the aforesaid, within a prescribed time and irrevocably authorise the Trustee and the Security Agent to date the Security Documents held by it in escrow; Certification from the Issuer that no 15

16 Event of Default has occurred and is continuing or may occur at the date of such certification; (vii) (viii) (ix) (x) Evidence reasonably satisfactory to the Facility Agent that all transaction fees, costs and expenses have been or will be paid in full; Evidence reasonably satisfactory to the Facility Agent of confirmation from the Joint Shariah Advisers that the structure and mechanism of the Sukuk Murabahah and each of the Transaction Documents are in compliance with Shariah requirements; The JLAs have received a satisfactory legal opinion from the solicitors addressed to them and the Trustee, advising with respect to the legality, validity and enforceability of the Transaction Documents and all other legal documentation and a confirmation addressed to the JLAs that all the conditions precedent have been fulfilled; and Such other conditions precedent as may be advised by the solicitors and to be mutually agreed between the JLAs and the Issuer. D. Conditions Subsequent: A. The Issuer shall, no later than sixty (60) days from the Issue Date, execute, deliver and/or complete the following documents and/or perform the following obligations: (a) Execute all necessary termination agreements, deeds of receipt and reassignment, revocation of powers of attorney, prescribed statutory discharge forms and other required documents to discharge the security created in favour of the holders of the Al- Istisna Islamic Securities; 16 (b) Subject to the relevant

17 documents under item 18.D.A.(a) being executed, completed and lodged (if necessary) with the relevant authorities, with respect to the Security Documents (excluding the Land Charges): (i) (ii) (iii) procure that the Security Documents (excluding the Land Charges)are dated, submitted for stamping and its respective power of attorney clauses therein, registered with the High Court of Malaya; lodge the relevant Forms 34 relating thereto with the Companies Commission of Malaysia for registration of the security created under the Security Documents (excluding the Land Charges) and that immediately prior to the lodgement of such Forms 34, a search conducted on such company in respect of which the Form 34 is filed, revealed that there are no other charges that have been registered by it with the Companies Commission of Malaysia; and serve all relevant notices of assignment in respect of the applicable Security Documents (excluding the Land Charges) and deliver to the Security Agent acknowledgments issued by the recipients of the notices of assignment, in relation to the security created by the Issuer under the Security Documents (excluding the Land Charges). 17

18 B. Subject to the relevant documents under item 18.D.A.(a) having been executed, completed and lodged (if necessary) with the relevant authorities, the Issuer shall, with respect to the Land Charges, no later than seventy five (75) days from the Issue Date, execute, deliver and/or complete the following documents and/or perform the following obligations: (a) (b) deliver to the Security Agent, a certified true copy of each of the approvals granted by the State Authority and the Minister; subject to the approvals in paragraph (a) above having been obtained, procure that the Land Charges are executed, dated, completed and submitted for stamping; (c) lodge the relevant Forms 34 relating thereto with the Companies Commission of Malaysia for registration of the security created under the Land Charges and that immediately prior to the lodgement of such Forms 34, a search conducted on such company in respect of which the Form 34 is filed, revealed that there are no other charges that have been registered by it with the Companies Commission of Malaysia; (d) (e) present the Land Charges at the relevant land office for registration; and lodge the power of attorney relating to the Land Charges with the High Court of Malaya for registration of the power of attorney. 19. Representations and warranties The Issuer s representations and warranties shall include but not be limited to the following: (i) it is a company with limited liability duly 18

19 incorporated and validly existing under the laws of Malaysia and it has the full power and authority to enter into the business in which it is engaged, i.e as an independent power producer and to own its properties and assets and has legal and beneficial ownership of all its properties and assets; (ii) its Memorandum and Articles of Association incorporates provisions which authorise, and 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 have been duly obtained and are in full force and effect which are required to authorise it to execute and deliver and perform the transactions contemplated in the Transaction Documents (to which it is a party) in accordance with their terms; (iii) (iv) all necessary actions, authorisations, licences, permits and consents required in respect of the Transaction Documents (to which it is a party) have been taken, fulfilled and obtained (as the case may be) and remain in full force and effect; neither the execution and delivery of any of the Transaction Documents (to which it is a party) nor the performance of any of the transactions contemplated by the Transaction Documents (to which it is a party) did or does as at the date of 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 itself or any of its assets is bound or which is applicable to it or any of its assets, (b) cause any limitation on itself or the powers of its 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 19

20 otherwise, to be exceeded, or (c) save for such existing security disclosed to the Facility Agent and the security created pursuant to the Sukuk Murabahah (details of which are more particularly set out in item 10 above), cause the creation or imposition of any security interest or restriction of any nature on any of its assets; (v) (vi) (vii) (viii) (ix) (x) its entry into, exercise of its rights under and performance of the Transaction Documents (to which it is a party) do not and will not violate any existing law or documents/agreements to which it is a party or its Memorandum and Articles of Association; each of the Transaction Documents (to which it is a party) is or will, when executed and/or issued (as the case may be), be in full force and effect and constitute (or will constitute, when executed and/or issued (as the case may be)) its legal, valid, binding and enforceable obligations; no Event of Default or event or circumstance which, with the passing of time, the giving of notice, the making of a determination or any combination thereof constituting an Event of Default has occurred and is continuing; there has been no material adverse change in its financial condition since the date of its last audited financial statements; it is in compliance and will comply with all applicable laws, guidelines, permits and regulations, where non-compliance would have a Material Adverse Effect; the Sukuk Murabahah constitute direct, unconditional and secured obligations of the Issuer and at all times rank: (a) pari passu, without discrimination, preference, priority amongst themselves; (b) at least pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer, 20

21 subject to those preferred by law; (xi) save for the Existing Security and security as permitted under the Transaction Documents (to which it is a party), there is no encumbrance on its assets; For the purpose of these Principal Terms and Conditions, Existing Security shall mean such security created pursuant to the Al-Istisna Islamic Securities. (xii) (xiii) (xiv) (xv) its audited financial statements are prepared in accordance with approved accounting standards in Malaysia which have been consistently applied and (in conjunction with the notes to such statements) present a true and fair view of its financial position for the financial year ended on such date and the state of affairs at that date; no litigation, arbitration, administrative proceeding, investigation or claim which might by itself or together with any other such proceedings or claims, is presently in progress or pending or, to the best of its knowledge, information and belief threatened against the Issuer or any of its assets which either (i) may have a Material Adverse Effect or (ii) would or might materially and adversely affect the legality, validity or enforceability of the Transaction Documents (to which it is a party) save as disclosed in the Information Memorandum (as defined below); it has delivered all necessary returns (if any) to the relevant taxation authorities and save for the amounts contested in good faith and for which adequate reserves are established, it is not in default in the payment of any taxes, and no claim is being asserted with respect to taxes which is not disclosed in the financial statements; no step has been taken by it or any of its shareholders or to the best of its knowledge, its creditors or any other 21

22 person on its behalf nor have any legal proceedings or applications been started or threatened under Section 176 of the Companies Act; (xvi) (xvii) all information furnished by itself in connection with the Sukuk Murabahah and the transactions contemplated under the Transaction Documents (to which it is a party) and its assets, business and affairs is true and not misleading and does not contain any material omission, and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after reasonable inquiry; (i) its execution of each Transaction Document (to which it is a party) constitutes, and the exercise by it of its rights and performance of its obligations under each Transaction Document (to which it is a party) will constitute, private and commercial acts performed for private and commercial purposes; (ii) it will not be entitled to claim immunity from suit, execution attachment or other legal process in any proceedings taken in Malaysia in relation to any Transaction Document (to which it is a party); and (iii) its agreement not to claim any immunity to which it or its assets may be entitled is legal valid and binding under the laws of Malaysia; (xviii) no extraordinary circumstances or change of law or other governmental action has occurred which shall make it improbable to observe and perform its covenants and obligations on its part to be observed and performed under the Transaction Documents (to which it is a party); (xix) each of the Project Agreements (to which the Issuer is a party) is in full force and effect and constitutes legal, valid, binding and enforceable obligations of the Issuer; (xx) there is no material dispute in 22

23 connection with any Project Agreement or the Generation Licence; (xxi) (xxii) each copy of the Project Agreements and the Generation Licence delivered to the Facility Agent is true and complete; save for the Project Agreements and the Generation Licence delivered to the Facility Agent, there is no other material agreement or document in connection with the Project, or arrangements which amend, supplement or change the effect of any Project Agreement; (xxiii) there is no environmental claim outstanding, pending or likely to occur in respect of, or in connection with the Plant, which would have a Material Adverse Effect on the implementation or operation of the Plant in accordance with all applicable laws, guidelines, permits and regulations; (xxiv) all Takaful/ insurances required under the Project Agreements and the Generation Licence have been effected and are valid and binding and all Takaful contributions/ premiums due have been paid and, so far as the Issuer is aware, nothing has been done or omitted to be done which has made or could make any such policy void or voidable; (xxv) each of the Project Agreements, the Generation Licence and all other agreements or documents relating to the Plant are valid and subsisting and have not been terminated by any of the parties thereto; and (xxvi) such other representations and warranties as may be advised by the solicitors and agreed by the Issuer. Each of the above representations and warranties except for sub-paragraph (xi) (in relation to the part regarding Existing Security ) will be correct and complied with in all material respects on the date of each Periodic Payment Date as if repeated by reference to the then existing circumstances. For the avoidance of 23

24 doubt, in the event of the occurrence of an Event of Default under item 20 which is continuing, the representation in item 19(vii) shall not be deemed repeated at the relevant time. For the purposes of these Principal Terms and Conditions, Material Adverse Effect means, in relation to any event, the occurrence of which materially and adversely affects, or would materially and adversely affect, the ability of the Issuer to comply with or perform the terms and conditions of the Sukuk Murabahah or any of its obligations under any of the Transaction Documents (to which it is a party) or the Project Agreements or the Generation Licence, or materially and adversely changes or would materially and adversely change the business, assets or condition (financial or otherwise) or operating results of the Issuer. 20. Events of default Events of Default shall include but not be limited to the following: (i) (ii) Non-payment: the Issuer fails to pay any amount due under any of the Transaction Documents on the due date or, if so payable, on demand; Breach of obligations: (a) the Issuer fails to observe or perform its obligations or terms and conditions under any of the Transaction Documents to which it is a party (other than item (i) above) or the Sukuk Murabahah and, if such breach in the reasonable opinion of the Trustee is capable of being remedied, the Issuer does not remedy the breach within a period of thirty (30) days after the Issuer became aware or having been notified by the Trustee of the breach, whichever is the earlier; and (b) the Issuer breaches any undertaking or arrangement entered into in which it is a party (other than (i) above) which may have a Material Adverse Effect and, if such breach in the reasonable opinion of the Trustee is capable of being remedied, the Issuer does not remedy the breach within a period of thirty (30) days after it became aware or having been notified by the Trustee of the breach, whichever is the earlier; 24

25 (iii) (iv) Breach of other obligations: there has been a breach by the Issuer of any obligation under any of its existing contractual obligations which may have a Material Adverse Effect and, if such breach in the reasonable opinion of the Trustee is capable of being remedied, the Issuer does not remedy the breach within a period of thirty (30) days after it became aware or having been notified by the Trustee of the breach, whichever is the earlier; Misrepresentation: any representation, warranty or statement which is made or given by the Issuer under the Transaction Documents (to which it is a party) or which is contained in any specific certificate, document or statement furnished at any time pursuant to the terms of the Sukuk Murabahah and/or any of the Transaction Documents (to which it is a party) proves to be incorrect or misleading in any material respect on or as of the date made or given or deemed made or given, which will in the reasonable opinion of the Trustee have a Material Adverse Effect; (v) Invalidity: any provision of the Transaction Documents (to which it is a party) is or becomes, for any reason, invalid, illegal, void or unenforceable which would prevent the Issuer from performing any of its obligations thereunder; (vi) Cessation/change of business: the Issuer changes or threatens 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 or suspension or cessation in the opinion of the Trustee will have a Material Adverse Effect; (vii) Appointment of receiver, legal process: an encumbrancer takes possession of, or a trustee, liquidator, 25

26 receiver and/or manager or similar officer is appointed in respect of, the whole or a substantial part of the business, assets or undertaking of the Issuer or any distress, legal process, sequestration or any form of execution is levied or enforced or sued out against the Issuer and is not withdrawn or discharged within thirty (30) days after being levied, enforced or sued out, or any security interest which may for the time being affect the Issuer s assets becomes enforceable. For the purpose of this paragraph (vii), references to substantial shall mean such value equivalent to or more than 10% of the Issuer s net tangible assets as reflected in its latest annual audited financial statements; (viii) Insolvency: (i) any of the Issuer, TNB, Petroliam Nasional Berhad ( Petronas ), or Global E-Technic (collectively, the Relevant Persons and each, a Relevant Person ) is deemed unable to pay its debts within the meaning of Section 218(2) of the Companies Act; or (ii) the Issuer becomes unable to pay any of its debts which exceeds RM5.0 million as they fall due or suspends or threatens to suspend making payments with respect to all or any class of its debts which exceeds RM5.0 million. For the avoidance of doubt, the threshold at part (ii) does not apply to this Sukuk Murabahah; (ix) (x) Creditor control: any creditor of the Issuer exercises a contractual right to take over the financial management of the Issuer and such event in the opinion of the Trustee may have a Material Adverse Effect; Composition: the Issuer convenes a meeting of its creditors or proposes or makes any arrangement including any scheme of arrangement or composition or begins negotiation with its creditors or 26

27 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 for the benefit of its creditors (other than for the purposes of and followed by a reconstruction previously approved in writing by the Trustee, unless during or following such reconstruction the Issuer becomes or is declared to be insolvent); (xi) (xii) Winding-up: any step is taken for the winding-up, dissolution or liquidation of any of the Relevant Persons or a resolution being passed for the windingup of any of the Relevant Persons or an order of court is made that any of the Relevant Persons be wound up or similar proceedings which are reasonably determined by the Trustee to be analogous in effect being instituted (other than for the purposes of an intra- Group reorganisation on a solvent basis or an amalgamation, merger or reconstruction the terms whereof have previously been approved by the Trustee unless during or following such reconstruction, such Relevant Person becomes or is declared to be insolvent) or a bona fide petition (which for the avoidance of doubt, excludes frivolous or vexatious petitions) is presented for the winding-up or dissolution of such Relevant Person by an order of a court of competent jurisdiction unless such petition is stayed, withdrawn or dismissed within thirty (30) days (or such extended period as the Trustee may consent, such consent not to be unreasonably withheld) of its presentation. For the purpose of this sub-clause, Group shall mean the Relevant Person, its subsidiaries, jointly controlled entities and associated companies collectively; Cross default: any indebtedness for borrowed moneys (including amounts arising from Islamic financing) of the 27

28 Issuer (other than the indebtedness under this Sukuk Murabahah) which exceeds RM5.0 million becomes due or payable or capable of being declared due or payable prior to its stated maturity or any guarantee or similar obligations of the Issuer is not discharged at maturity or when called and such declaration of indebtedness being due or payable or such call on the guarantee or similar obligations is not discharged or disputed in good faith by the Issuer in a court of competent jurisdiction within thirty (30) days from the date of such declaration or call, or the Issuer goes into default under, or commits a breach of, any agreement or instrument relating to any such indebtedness, guarantee or other obligations, or any security created to secure such indebtedness becomes enforceable; (xiii) (xiv) (xv) Assets: any of the property or assets, undertakings, rights or revenue of the Issuer or any of its subsidiaries shall be condemned, seized or otherwise appropriated, nationalised or compulsorily acquired by any person acting under the authority of the governmental body, which will in the reasonable opinion of the Trustee have a Material Adverse Effect; Repudiation: the Issuer repudiates any of the Transaction Documents (to which it is a party) or the Issuer does or causes to be done any act or thing evidencing an intention to repudiate any of the Transaction Documents (to which it is a party); Judgment passed: the Issuer fails to satisfy any judgment at any time passed against it or any of its subsidiaries by any court of competent jurisdiction and no appeal against such judgment or no 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; 28

29 (xvi) Approvals: any consent, authorization, licence, approval or registration with or declaration to governmental or public bodies or authorities or courts (where applicable)required by the Issuer in connection with the execution, issue, delivery, validity, legality, enforceability or admissibility in evidence of any of the Transaction Documents (to which it is a party) or the performance by the Issuer of its obligations under any of the Transaction Documents (to which it is a party) or to carry out its business, as the case may be, is withheld, modified (provided that such modification would or might have a Material Adverse Effect) or is not approved or is revoked or expired or is not renewed or otherwise ceases to be in full force and effect and such withholding, modification, nonapproval, revocation, expiration, or nonrenewal continues for thirty (30) days or more from the date the Issuer is being notified in writing of such failure, unless in respect of the foregoing such withholding, modification, non-approval, revocation, expiration, or non-renewal will not have a Material Adverse Effect; (xvii) Change in financial position: any change in the financial position of the Issuer which would have a Material Adverse Effect; (xviii) Failure to fulfil Conditions Subsequent: failure to fulfil any Condition Subsequent: (a) under item 18.D.A. within sixty (60) days of Issue Date; and (b) under item 18.D.B. within seventy five (75) days of the Issue Date; (xix) Failure to register security: in respect of: 29 (a) the Security Documents (other than the Land Charges), any of the security created thereunder is not duly registered under Section 108 of the Companies Act 1965 within sixty

30 (60) days of lodgement of the relevant prescribed statutory forms with the Companies Commission of Malaysia; (b) any of the Land Charges are not duly registered: (A) (B) by the relevant land office within one hundred and twenty (120) days of presentation of the relevant Land Charge at the relevant land office; or under Section 108 of the Companies Act 1965 within one hundred and twenty (120) days of lodgement of the relevant prescribed statutory forms with the Companies Commission of Malaysia. (xx) (xxi) Material Adverse Events: any event or events has or have occurred or a situation exists which in the reasonable opinion of the Trustee may have a Material Adverse Effect on the Issuer and if such breach in the reasonable opinion of the Trustee is capable of being remedied, the Issuer does not remedy the breach within a period of thirty (30) days after it became aware or having been notified by the Trustee of the breach, whichever is the earlier; FSRA: the Issuer fails to fund the FSRA, up to the Minimum Required Balance in accordance with the Transaction Documents; (xxii) Repudiation by Petronas, TNB, Global E-Technic, ALSTOM Power Asia Pacific Sdn Bhd ( ALSTOM ) and ALSTOM Power O & M Ltd (Switzerland) ( ALSTOM Switzerland ): Petronas, TNB, Global E-Technic, ALSTOM or ALSTOM Switzerland or any other counterparty repudiates or rescinds any of the Project Agreements to which they are party, or evince an intention to rescind or repudiate any of the Project Agreements 30

31 31 to which they are party; (xxiii) Termination of the Project Agreements: Petronas, TNB, Global E- Technic, ALSTOM or ALSTOM Switzerland gives a termination notice in accordance with the relevant Project Agreements and such notice is not withdrawn within thirty (30) days; (xxiv) Full force and effect: the Generation Licence or any Project Agreement ceases to be in full force and effect prior to its stated termination date or has been lawfully terminated (except due to lapse of time); (xxv) Renegotiation: conclusion of renegotiation of any of the PPA, GSA, Technical Support Agreement, O&M Agreement or Generation Licence due to an industry restructuring which new terms and conditions have a Material Adverse Effect, as deemed by the Trustee/ Facility Agent, on the ability of the Issuer to pay the sums payable under the Sukuk Murabahah; (xxvi) Termination of Generation Licence: the Generation Licence is terminated for any reason whatsoever other than substitution of the Generation Licence or other form of licence that enables the sale of electricity generated by the Plant. For the purpose of these Principal Terms and Conditions, Generation Licence shall mean the electricity generation licence in the name of the Issuer authorising the generation and supply of electricity by the Issuer issued pursuant to section 9 of the Electricity Supply Act 1990 by the Director General on 26 August 1998; (xxvii) Breach of Generation Licence: the Issuer breaches any of the terms and/or conditions in the Generation Licence; and (xxviii) Such other events as may be advised by the solicitors and to be mutually agreed