Date of Listing (in case of a public listed company) (vi) Status : Resident controlled company : Non-Bumiputera controlled company

Transcription

1 Principal Terms and Conditions of the Proposal Background Information (a) Issuer (i) Name Ample Zone Berhad ( Ample Zone ) (ii) Address B-5-6, 5 th Floor, Block B Megan Avenue II 12 Jalan Yap Kwan Seng Kuala Lumpur (iii) Business Registration No P (iv) Date / Place of Incorporation Ample Zone was incorporated in Malaysia under the Companies Act 1965 as Ample Zone Sdn Bhd on 8 July 2004 as a private company limited by shares. The name was later changed to Ample Zone Berhad on 10 September (v) Date of Listing (in case of a public listed company) Not applicable. (vi) Status : Resident controlled company : Non-Bumiputera controlled company (vii) Principal Activities As Ample Zone is a special purpose vehicle, its principal activities will be restricted to, amongst others, the following :- (i) (ii) (iii) (iv) (v) (vi) Acquiring the Assets from the Sellers; Entering into Ijarah arrangement with the Sellers to lease the Assets for a period of up to seven (7) years or such other duration on terms and conditions as may be thought fit; Issuing series of Ringgit Malaysia denominated trust certificates to finance the acquisition of the Assets; Selling the Assets to the Sellers and/or TCB upon occurrence of certain events; Entering into the Transaction and Financing Documents; and Such other things incidental and conducive for the attainment of the foregoing. Page 1

2 (viii) Board of Directors Name Mohamad Rosdi Bin Ibrahim Jamaludin Bin Madrop Nationality Malaysian Malaysian (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders The shares of Ample Zone will be registered in the name of the Share Trustee i.e. Asia Pacific International Trust Berhad. The Share Trustee will declare in the declaration of trust that it is holding the shares in the Issuer on trust for Larut Management Services Sdn Bhd, a subsidiary of TCB, and subject to the terms and conditions provided therein. The shares of Ample Zone will be registered in the name of Share Trustee as this will provide certain level of independence in respect of the running of the company as a special purpose company during the subsistence of the Sukuk. Ample Zone is a subsidiary of Larut Management Services Sdn Bhd. (x) Authorised and paid-up capital Authorised : RM100,000 comprising 100,000 ordinary shares of RM1.00 each (as at 10 September 2004) Paid-up : RM2.00 comprising 2 ordinary shares of RM1.00 each (as at 10 September 2004) Page 2

3 (b) Originator (in the case of asset-backed securities)* (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Name Address Business Registration No. Date / Place of Incorporation Date of Listing (in case of a public listed company) Status : Resident / non-resident controlled company : Bumiputera / non-bumiputera controlled company Principal Activities Board of Directors Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders Authorised and paid-up capital *This section is not applicable. Page 3

4 Principal Terms and Conditions (a) Names of parties involved in the proposed transaction (where applicable) (i) Principal Adviser(s) / Lead Arranger(s) Malaysian International Merchant Bankers Berhad ( MIMB ) (ii) Arranger(s) Not applicable. (iii) Valuers Colliers Jordan Lee & Jaafar. (iv) Solicitors Shahrizat Rashid & Lee (v) Financial Adviser Not applicable. (vi) Technical Adviser Not applicable. (vii) Guarantor Not applicable. (viii) Trustee Sukuk Trustee - Malaysian Trustees Berhad (ix) Facility Agent MIMB Page 4

5 (x) Primary Subscriber(s) and Amount subscribed (where applicable) MIMB as the Primary Subscriber shall fully subscribe for the RM150.0 million Sukuk Al-Ijarah on a bought deal basis subject to the following minimum rating: Class Minimum Rating Amount (RM) (or its equivalent) Class A AAA ID 50,000,000 Class B AA ID 25,000,000 Class C A ID 75,000,000 TOTAL 150,000,000 The Sukuk may not be offered, sold, transferred or otherwise disposed, directly or indirectly, nor may any document or other material in connection therewith be distributed in Malaysia, other than to persons (the Investors ) whom the offer or invitation to subscribe or purchase the Sukuk or whom the Sukuk are issued would fall within:- 1. At the point of issuance, Schedule 2 and Schedule 3 and Schedule 5 of the SCA; and 2. After the issuance, Schedule 2 and Schedule 5 of the SCA. (xi) Underwriter(s) and amount underwritten Not applicable (xii) Syariah Adviser (where applicable) Dr Engku Rabiah Adawiah Engku Ali (xiii) Central Depository Bank Negara Malaysia ( BNM ) (xiv) Paying Agent BNM (xv) Reporting Accountant Ernst & Young (xvi) Others (please specify) Issue Agent - MIMB Page 5

6 Security Trustee - Malaysian Trustees Berhad Share Trustee - Asia Pacific International Trust Berhad The Share Trustee will be registered as the shareholder of all issued shares of Ample Zone and will declare that it holds the said shares on trust for Larut Management Services Sdn Bhd under a share trust deed/declaration of trust. The Share Trustee is to ensure that during the subsistence of the Sukuk transaction there will be no amendment to the Memorandum & Articles of Association or disposition of/dealing with assets of the Issuer which would prejudice the interest of the Sukukholders. Transaction Administrator- Crossworld Consulting Sdn Bhd Service Agents - Intelbest Sdn Bhd, Abra Development Sdn Bhd, Inti Johan Sdn Bhd and Pandan Indah Medical Management Sdn Bhd (collectively, also referred to as the Sellers ) Tax Adviser - Ernst & Young Tax Consultants Sdn Bhd (b) Islamic Principle Used Sukuk Al-Ijarah ( Sukuk ) (c) Facility Description Ample Zone proposes to raise funds by issuing the Sukuk, based on the principle of Al-Ijarah. Before the Sukuk can be issued, the Sellers will sell the beneficial interest in the Assets, to Ample Zone in exchange for the Purchase Price. Subsequently after the said sale transaction, the Sellers and Ample Zone will enter into an IRA for the lease of the Assets to the Sellers for a period of up to seven (7) years in consideration of Ijarah Rentals to be paid periodically by the Sellers which are reflective of the total payments obligation of the Issuer under the Primary notes and Secondary notes. Page 6

7 Each of the Sellers will also provide Ample Zone with a Purchase Undertaking and Ample Zone will provide each of the Sellers with a Sale Undertaking. Both undertakings are exercisable upon the occurrence of a Trigger Event, Event of Default or at the maturity of the IRA. Each Seller, in its capacity as the Service Agents, will also enter into Service Agency Agreement(s) with Ample Zone to provide Ample Zone with major maintenance services and undertake the responsibility of effecting and maintaining insurances for the respective Assets. Concurrently with the above transaction, the Sellers declare themselves as bare trustees of the Assets (other than Pandan Kapital Shopping Complex, whereby all rights title and interest in and to the said complex shall be assigned to Ample Zone via a deed of assignment) for the benefit of Ample Zone via DoT. In essence, the Sellers no longer have any interest (beneficial or otherwise) in the Assets other than merely being reflected on the title deed as the registered proprietor and the registered lessee as the case maybe. The DoT signed by each Seller would impose an obligation on the Sellers inter alia to deal with the Assets as required by the beneficiaries including without limitation to effect a transfer of the same to such person nominated by the beneficiaries. Ample Zone will in turn conveys its beneficial interest in the Trust Assets to the Sukuk Trustee under a DoC. The Sukuk Trustee's role is to hold all rights title and interest in and to the Trust Assets (which would include the Assets) as trustee for the Sukukholders. Ample Zone will then issue the Sukuk to the Investors and the proceeds from the subscription of the Sukuk will be used to partly pay the Purchase Price to the Sellers. The Sukuk will be issued in three (3) classes with tenors ranging up to seven (7) years. During the respective tenors of the Sukuk, the Issuer will distribute the Ijarah Rentals received from the Sellers to the Investors on a periodic basis based on the proportion of their respective Sukuk holdings. On the occurrence of a Trigger Event, Event of Default or at the maturity of the IRA, both the Sellers and Ample Zone will be able to exercise the Purchase Undertaking and/or as the case may be the Sale Undertaking. The exercise of a Purchase Undertaking with respect to an Asset would cancel or extinguish the correlating Sale Undertaking over such Asset. Ample Zone will then transfer the respective Assets to the Sellers in exchange for the Exercise Price, the proceeds of which will be used by Ample Zone to redeem the Sukuk. Upon completion of the sale to the Sellers, the DoT over the Assets will subsequently be dissolved and neither Ample Zone nor the Investors will have any further rights or interest in the Assets. Page 7

8 (d) Issue Size (RM) Equivalent to RM150.0 million comprising the following sums, which correspond to the amount of the Ijarah Capital (i.e. principal) / final rental payment for each Ijarah Rental series. The proceeds of the Sukuk will be released in one lump sum on the issue date. Ijarah Rental Series Rating Tenor* (Year) Amount (RM 000) Class A AAA ID 1 2 1, , , , , ,000 Subtotal 50,000 Class B AA ID 1 2 1, , , , , ,000 Subtotal 25,000 Class C 1 A ID 7 75,000 * From the first issue date Ranking:- Total 150,000 i) Series 1 of Class C Sukuk shall rank pari passu without any preference among themselves and is subordinated in priority to Series 1 to Series 6 of Class A Sukuk and Series 1 to Series 6 of Class B Sukuk. ii) iii) Series 1 to Series 6 of Class B Sukuk shall rank pari passu without any preference among themselves and are subordinated in priority to Series 1 to Series 6 of Class A Sukuk but shall rank in priority to Series 1 of Class C Sukuk. Series 1 to Series 6 of Class A Sukuk shall rank pari passu without any preference among themselves but ranks in priority to Series 1 to Series 6 of Class B Sukuk and Series 1 of Class C Sukuk. Page 8

9 (e) Issue Price To be issued at par for nominal aggregate amount of RM150.0 million (f) Tenor of the facility / issue Two (2), three (3), four (4), five (5), six (6) and seven (7) years commencing from the date of first issue of the Sukuk as set out in paragraph (d) above. (g) Coupon / Profit or equivalent rate (%) (please specify) The Ijarah Rentals are semi-annual lease payments which the Sellers are obliged to pay to the Issuer pursuant to the IRA which are reflective of the total payments obligation of the Issuer under the Primary notes and Secondary notes. During the tenor of the Sukuk, the Issuer will distribute the Ijarah Rentals received by it under the IRA to the Investors on a periodic basis in proportion to the Sukuk holdings. The Ijarah Rental shall be computed based on the Internal Rate of Return ( IRR ) for the tenor of the individual rental series as agreed between the Issuer and the Primary Subscriber. Ijarah Rental Series Total Ijarah Rental Receivable (RM) IRR (%) Profit Capital Class A 1 156,000 1,500, ,000 2,000, ,000 2,500, ,750 2,500, ,500 2,500, ,700,500 39,000, Class B 1 117,000 1,000, ,000 2,000, ,000 2,000, ,000 2,000, ,000 2,000, ,736,000 16,000, Class C 1 48,825,000 75,000, TOTAL 81,773, ,000,000 Page 9

10 The total Ijarah Rental Receivable shall comprise the sum of all the semiannual Ijarah Rental (including repayment of the Ijarah Capital upon maturity of the Sukuk) received by the Investors over the tenor of the relevant Ijarah series. (h) Coupon / Profit Payment frequency and basis Payment of each Ijarah Rental series shall be made by successive semiannual instalments as follows, the first to commence six (6) months after the date of the execution of the IRA and of which the date of the said IRA shall correspond with the date of the release of the Purchase Price. Basis : Actual days / Actual days (i) Yield to Maturity (%) The yield to maturity for each series of the Sukuk is the same as IRR as outlined in item (g) above. (j) Security / Collateral (if any) (i) (ii) (iii) (iv) A principal charge on the Designated Accounts, which include the Collection Account, Sukuk Profit Reserve Account, four (4) Sub-lease Collection Accounts and SPV Expenses Account; Debenture consisting of first fixed and floating charges on all assets of Ample Zone, present and future; Assignment over the Service Agency Agreement(s); and Option Agreement. (k) Details on utilisation of proceeds Ample Zone shall raise funds via the Sukuk for the following purposes:- (i) (ii) Purpose To part finance the purchase of the Assets from the Sellers; To pay financing, professional fees and other related costs relating to the issuance of the Sukuk; and (RM) 135,311,100 2,522,150 (iii) To fund the starting balance of the SPRA as required under the Sukuk. 12,166,750 Total 150,000,000 Page 10

11 The aforesaid funds of RM135,311,100 to be received by the Sellers will in turn be utilised as follows: (a) to repay the following bank borrowings to facilitate the redemption of the Assets (other than Pandan Kapital Shopping Complex) which are currently secured/charged to the following lenders/lead arranger/security agent as security: Borrower Lender / Lead Arranger / Security Agent Amount to be Repaid (RM) 1. ISB TA First Credit Sdn Bhd (Lender) Up to 37,000, TCB AmMerchant Bank Berhad Up to 82,000,000 (Lead arranger/security agent) 3. PIMM HSBC Bank Malaysia Berhad Up to 9,000,000 (Lender) Total Up to 128,000,000 (b) To partially repay the shareholder s advances extended by Maxisegar to IJSB amounting to RM7,311,100. Note :- In the event the amount utilised for purpose (a) above is less than RM128,000,000, the difference may be utilised for purpose (b) above. The total amount utilised for purposes (a) and (b) above shall not exceed RM135,311,100. (l) Sinking fund (if any) / Designated Accounts Ample Zone and the Sellers are required to open and maintain the following designated Islamic accounts with a licensed financial institution, acceptable to the Facility Agent as follows:- (a) Ample Zone (i) (ii) (iii) Collection Account (operated jointly by the Facility Agent and Ample Zone/its nominees); Sukuk Profit Reserve Account ( SPRA ) (operated solely by the Facility Agent); and SPV Expenses Account (operated jointly by the Facility Agent and Ample Zone/its nominees) Page 11

12 (b) The Sellers Four (4) Sub-lease Collection Accounts (operated jointly by the Facility Agent and Ample Zone/its nominees). Upon enforcement of the security, the Investors will have priority in respect of the amount standing to the credit of all the Designated Accounts over other creditors of Ample Zone (if any). Collection Account Ample Zone will open an income bearing Collection Account for the purpose of depositing the following proceeds: i) Drawdown proceeds under the Sukuk; ii) Periodic rentals payments on the Assets from the Sellers; iii) Proceeds from any insurance claims; and iv) All other income generated by the Ample Zone (if any); For the avoidance of doubt, the agreed fees due and payable to Lead Arranger and other advisers under the Sukuk shall be paid out of the proceeds of the Sukuk by the Facility Agent at the direction of Ample Zone upon the first issue of the Sukuk. Priority of Payments Funds credited to the Collection Account will be applied in the following order of priority:- (i) (ii) (iii) (iv) (v) (vi) (vii) tax payable; permitted distribution of the Sukuk as defined under the Details of the Utilisation of Proceeds section above; payment of annual recurring fees to the advisers under the Sukuk; profit and principal and other payments due under the Sukuk; Contributions to the SPV Expenses Account as per the quarterly operating/capital expenditure budget; Contributions into the Sukuk Profit Reserve Account; and Purchase of the Sukuk (if Ample Zone so elects). Sub-lease Collection Accounts The Sellers will open four (4) income bearing Sub-lease Collection Accounts respectively for the purpose of remitting and/or depositing all the periodic rental payments on the Assets from the sub-tenants to the Sellers respectively pursuant to the sub-tenancy agreements entered or to be entered between the Sellers and their respective sub-tenants. Page 12

13 The funds in these accounts shall be remitted directly into the Collection Account on monthly basis i.e. within seven (7) days of the end of each monthly period. These accounts shall be jointly operated by the Facility Agent and Ample Zone/its nominees. SPV Expenses Account Ample Zone will open a SPV Expenses Account whereby funds will be transferred from the four (4) Sub-lease Collection Accounts and/or Collection Account for the purpose of paying all operating, management, maintenance and capital expenses for Ample Zone and the Assets. This account will be operated jointly by the Facility Agent and Ample Zone/its nominees. Funds credited from the four (4) Sub-lease Collection Accounts and/or Collection Account will be remitted as follows: a) Monthly or quarterly transfer to the SPV Expenses Account based on a quarterly operating budget which shall be approved by the Board of Directors of Ample Zone and shall be submitted to the Facility Agent fourteen (14) days prior to the commencement of the next budget period. b) The budget shall contain a reasonably detailed and itemised estimate of the amount of income to be received by Ample Zone and the amounts of expenditure to be incurred by Ample Zone and on the Assets for each month during the budget period. Any subsequent shortfall in the SPV Expenses Account shall be funded from the Collection Account and/or four (4) Sub-lease Collection Accounts, failing which the Sellers and/or TCB are obligated to make good of the shortfall by way of advance within fourteen (14) days from the occurrence of the shortfall. The sum advanced by the Sellers and/or TCB will only be reimbursed after the full redemption of the Sukuk subject to the availability of cashflow. Sukuk Profit Reserve Account Ample Zone will open an income bearing SPRA. The SPRA is to be operated solely by the Facility Agent. Contributions to the SPRA from the four (4) Sub-lease Collection Accounts and/or Collection Account, after payments referred to under the Priority of Payments clause, will be credited to the SPRA until the balance is equivalent to the next twelve (12) months profit servicing under the Sukuk. Page 13

14 Ample Zone may only withdraw from SPRA for the following payments:- i) towards meeting all outstanding profit instalments due under the Sukuk; and ii) To transfer back to the Collection Account should the credit balance in the SPRA exceed the amount required for the relevant twelve (12) months period. For the avoidance of doubt, the required amount shall be fully deposited into this account twelve (12) months before the respective due dates of the financial obligations (with respect to profit payments under the Sukuk). Any subsequent shortfall of the required minimum balance shall be funded from Priority of Payments clause from the Collection Account and/or four (4) Sub-lease Collection Accounts failing which the Sellers and/or TCB are obligated to make good of the shortfall by way of advance within two (2) months from the occurrence of the shortfall. The sum advanced by the Sellers and/or TCB will only be reimbursed after the full redemption of the Sukuk subject to the availability of cashflow. (m) Rating Credit Rating Assigned (please specify if this is an indicative rating) Class Class A Class B Class C Indicative Rating (or its equivalent) AAA ID AA ID A ID Name of Rating Agency Malaysian Rating Corporation Berhad. (n) Form and Denomination The Sukuk will be issued in bearer form and each issue of Sukuk will be represented by a global certificate at the time of issuance and be deposited with the Depository Agent (BNM). The global certificate may be exchangeable for definitive bearer form only in certain limited circumstances. Sukuk shall be issued in the denomination and multiples of RM500,000 in nominal value at the time of issuance. Page 14

15 (o) Mode of Issue The Sukuk will be issued without prospectus on a bought deal basis to the Primary Subscriber. The Sukuk shall be issued in bearer form and will be prescribed under the Rules on Fully Automated System For Tendering ( FAST ) and/or Malaysian Scriptless Securities Market under the Real Time Electronic Transfer of Funds and Securities ( RENTAS ) system managed by BNM and / or by any other guidelines issued by the relevant authority(ies). (p) Selling Restriction (i) The Sukuk may not be offered or sold directly or indirectly, nor may any document or other material in connection therewith be distributed in Malaysia other than to persons falling within any of the categories of persons whom the offer or invitation to subscribe or purchase the Sukuk or whom the Sukuk are issued would fall within:- a. at the point of issuance, Schedule 2 and Schedule 3 and Schedule 5 of the SCA; and b. after the issuance, Schedule 2 and Schedule 5 of the SCA. ii) For the purchasers of the Sukuk who are non-residents as defined under the Exchange Control Act 1953, any payment for the purchase of the Sukuk must be made in foreign currency equivalent to the purchase price of the Sukuk or in Ringgit Malaysia drawn from an External Account (as defined under the Exchange Control Act 1953). (q) Listing Status The Sukuk will not be listed on the Bursa Malaysia. (r) Minimum Level of Subscription (RM or %) RM150.0 Million (s) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) Nil. Page 15

16 (t) Identified Assets 1. Midpoint Shopping Complex; 2. Menara Maxisegar; 3. Pandan Kapital Shopping Complex; and 4. Wisma Talam. (u) Purchase and selling price / rental (where applicable) Purchase Price The Purchase Price refers to the price payable by Ample Zone for the purchase of the Assets from the Sellers, amounting to RM236.0 million. The said Purchase Price shall be payable by Ample Zone to the Sellers partly in the form of an up-front cash of up to RM135,311,100 while the balance in the form of a deferred payment consideration of up to RM100,688,900. The deferred payment consideration of up to RM100,688,900 (subject to availability of cashflow) shall only be paid to the Sellers after all the Sukuk have been fully redeemed. The remaining cashflow available after the full redemption of the Sukuk shall be utilised to settle the deferred payment consideration. Should the remaining cashflow of Ample Zone is insufficient to settle the deferred payment consideration, Ample Zone could settle the remaining deferred payment consideration via other mode of payments to be mutually agreed between Ample Zone and the Sellers. Notwithstanding the deferred payment consideration, all interest in and to the Assets shall immediately vest in the Issuer on settlement of the up-front cash portion. The Purchase Price for the Assets shall at the time of issuance of the Sukuk be in compliance with the Securities Commission s Syariah Advisory Council s Pricing Guidelines. Payment of Ijarah Rental Payment of each Ijarah Rental series, the amount of which is reflected in clause (g) above (Coupon/Profit), shall be made by successive semi-annual instalments as follows, the first to commence six (6) months after the date of the execution of the IRA and of which the date of the said IRA shall correspond with the date of the release of the Purchase Price. Payments of the Ijarah Rental instalments/total Ijarah Rental receivables which comprise Ijarah Capital and Ijarah Profit, shall be evidenced by the issuance of the Sukuk which represent the Issuer s unconditional obligation to settle the Ijarah Rental in the following manner: Page 16

17 a) For each series, a Global Primary Note shall be issued representing a proportion of the Ijarah Capital which shall all mature and be payable by the Issuer at the end of the tenure of each series as mentioned in section (d) (Issue Size) above; b) For each series, each Global Primary Note shall be supported by a series of Secondary Notes of a certain value representing a proportion of the Ijarah Profit. Each Secondary Note shall have a six (6) month maturity period, with the first Secondary Note maturing six (6) months after the date of the execution of the IRA; c) The details of the Primary and Secondary Notes are shown below. Each Global Primary Note shall be supported by a number of Secondary Notes that are related to the tenure of the Sukuk. Primary Notes Secondary Notes Class Nominal Value (RM) No. of Notes Face Value (RM) No. of Notes A 50,000, ,575, B 25,000, ,373, C 75,000, ,825, Total 150,000,000 81,773,750 Exercise Price On the occurrence of an Event of Default, a Trigger Event or at the maturity of the IRA, the parties will exercise the Sale Undertaking or as the case maybe the Purchase Undertaking over the Assets wherein Ample Zone will sell the respective Assets to the Sellers at the Exercise Price. The Exercise Price on occurrence of an Event of Default or a Trigger Event, as of any date, shall be for the amount outstanding under the Sukuk at such date inclusive of all fees and other monies payable under the Sukuk and/or the Financing Documents. The Exercise Price on maturity of the IRA (on compliance and due performance by the Sellers as lessees of all undertakings, covenants, obligations and terms and conditions on the Sellers part under the IRA) shall be a nominal amount of RM per Asset. Page 17

18 (v) Conditions Precedent Conditions and clauses standard for transactions of this nature and as advised by the solicitors but not limited to the following:- i) Receipt of a certified true copy of the Board of Directors Resolution of Ample Zone or as the case may be the Sellers (with respect to the opening and operation of the four (4) Sub-lease Collection Accounts) authorising: the acceptance of the Sukuk; the carrying out of all its obligations under the legal documents in connection with Sukuk (hereinafter referred to as Financing Documents ); the opening of the relevant Designated Account(s); and the appointment of authorised signatories for and in respect of the Sukuk, Designated Accounts and the execution of the relevant documents relating to the Sukuk; ii) iii) iv) Receipt of certified true copies of Ample Zone s and the Sellers Memorandum and Articles of Association together with Forms 24 and 49; Each of the Financing Documents has been duly executed by all parties; Confirmation from Ample Zone and the Sellers that the Designated Accounts have been opened; v) Valuation reports for the Assets prepared by a professional valuer acceptable to the Facility Agent; vi) A written legal opinion from the Legal Adviser to the Facility Agent that all required regulatory approvals, consents and waivers are unconditional or, if they are conditional, the conditions have been fulfilled (to the extent that they have to be fulfilled prior to the issuance of the Sukuk); Page 18

19 vii) viii) ix) A written legal opinion from the Legal Adviser to the Facility Agent addressing the validity, legality, enforceability and the stamping thereof of the Financing Documents and that all the other conditions precedent set out hereto have been fulfilled; The Sukuk shall have been approved by the SC; Confirmation that the Sukuk have received the required minimum investment rating from MARC; x) Where relevant, if the Assets are encumbered, receipt by the Facility Agent of redemption statement cum undertaking from the relevant chargee of the Assets in form and substance acceptable to the Facility Agent; xi) xii) In the event that the respective redemption sums on three (3) of the Assets namely Midpoint Shopping Complex, Menara Maxisegar and Wisma Talam are higher that the respective amounts to be repaid as outlined under Details of the Utilisation of Proceeds section, the respective Sellers and/or TCB must provide documentary evidence on the availability of funds to settle the differential sums and/or respective confirmation on the full settlement of the differential sums; and other conditions as advised by the solicitors. (w) Representations and Warranties Standard Representations and Warranties for a facility of this nature which shall include, but not be limited to: i) Ample Zone is a company duly established and existing under Malaysian law and it has the power and authority to enter into the business in which it is or proposes to be engaged; ii) iii) iv) Ample Zone has the power to enter into, exercise its rights under and perform its obligations under the Financing Documents; All necessary actions, authorisations and consents required by that date under the Financing Documents have been taken, fulfilled and obtained and remain in full force and effect; Ample Zone s entry into, exercise of its rights under and performance of the Financing Documents do not and will not violate any existing law or documents to which it is a party; Page 19

20 v) The Financing Documents create valid and binding obligations which are enforceable on and against Ample Zone subject to the provisos set out in the legal opinion to be given prior to initial drawdown; vi) vii) viii) Ample Zone s assets are free of all security interests save as provided under the Financing Documents; Ample Zone s audited accounts are prepared in accordance with generally accepted accounting principles and standards. The accounts fairly represent Ample Zone s financial position as at the date of the accounts; and To the best of Ample Zone s knowledge, no litigation or arbitration is current or threatened, which if adversely determined would have a Material Adverse Effect on the ability of Ample Zone to comply with the Financing Documents. (x) Events of Default Standard events of default for financing facilities of this nature which shall include but not limited to: i) Failure to pay: The Issuer fails to pay any amount due from it under any of the Financing Documents on the due date or on demand, if so payable; or ii) iii) iv) Breach of Covenant: The Issuer breaches its obligations under any of the Financing Documents (other than that stated in (i) above) which in the opinion of the Sukuk Trustee, is incapable of remedy; or which, in the opinion of the Sukuk Trustee being capable of remedy, is not remedied to the satisfaction of the Sukuk Trustee within a period to be agreed; or Misrepresentation: any representation, warranty or statement which is made by the Issuer in the Financing Documents proves to be incorrect or misleading in any material respect; or Unlawful: it becomes unlawful for the Issuer to perform its obligations under any of the Financing Documents or it becomes unlawful for the Sellers to perform their obligations under any of the Transaction Documents to which it is a party; or v) Invalidity: any provision of the Financing Documents becomes, for any reason, invalid, illegal, void or unenforceable which would prevent the Issuer from performing any of its obligations thereunder; or vi) Cessation of business: the Issuer changes the nature or scope of its business, suspends or ceases a substantial part of the present business operations; or Page 20

21 vii) viii) ix) Appointment of receiver, legal process: an encumbrance takes possession of, or a trustee, liquidator, receiver or similar officer is appointed in respect of, all or any part of the business or assets of the Issuer and is not paid out, withdrawn or discharged within thirty (30) days of such appointment; or Insolvency: the Issuer is deemed unable to pay its debts within the meaning of Section 218(2) of the Companies Act 1965; or Composition, winding up: the Issuer convenes a meeting of its creditors or proposes or makes any arrangement or composition with, or any assignment for the benefit of, its creditors or a petition is presented for the winding up of the Issuer unless contested or a resolution to wind up the Issuer is passed; or x) Judgement Passed: the Issuer fails to satisfy any judgement passed against it by any court of competent jurisdiction which would have a Material Adverse Effect on the Issuer; or xi) xii) xiii) xiv) xv) xvi) xvii) Asset: all or a material part of the property or assets of the Issuer shall be condemned, seized or otherwise appropriated or nationalized by any person acting under the authority of the Government of Malaysia; or Cross default: any other indebtedness of the Issuer becomes due and payable prior to its stated maturity or where the security created for any other indebtedness becomes enforceable; or Section 176: a scheme of arrangement under Section 176 of the Companies Act 1965 has been instituted against the Issuer; or there is a revocation, withholding or modification of a license, authorisation or approval that impairs or prejudices the Issuer s ability to comply with the terms and conditions of the Trust Deed or any other Financing Documents; or there is total loss or destruction of or damage to the whole of the Assets rendering the Assets permanently unfit for any economic use and the repair or remedial work in respect thereof is uneconomical; or Ijarah Event of Default : an Ijarah Event of Default occurs under any of the IRA; or any other customary events of default as advised by the solicitors. The above Events of Default would be stated in inter alia the Trust Deed to be executed between the Sukuk Trustee and the Issuer. Page 21

22 (y) Principal terms and conditions for warrants (where applicable) Not applicable. (z) Other principal terms and conditions for the issue (i) Sale Undertaking Ample Zone will give a unilateral, unconditional and irrevocable undertaking to sell the respective Assets to each Seller at the Exercise Price on the occurrence of an Event of Default, a Trigger Event or at the maturity of the IRA. (ii) Purchase Undertaking Each Seller will give to Ample Zone a unilateral, unconditional and irrevocable undertaking to purchase the respective Assets from the Issuer at the Exercise Price on the occurrence of an Event of Default, a Trigger Event or at the maturity of the IRA. Under the Purchase Undertaking, Ample Zone or the Sukuk Trustee or the Security Trustee shall give each Selller a written notice of at least eighteen (18) months prior to the due date of the final rental payments (which corresponds to the final payment date under the Sukuk) and each Seller must confirm in writing of the availability of funds six (6) months prior to the required purchase date. If the Sellers shall fail to furnish the requisite confirmation to the Security Trustee and the Sukuk Trustee of the availability of funds, the Sellers shall not be entitled to exercise the Sale Undertaking and as the case maybe the Purchase Undertaking. In such event, the Security Trustee directly exercise its rights under the Option Agreement to put the Exercise Price to TCB. (iii) Option Agreement The Option Agreement is to be executed between TCB, the Security Trustee and Ample Zone whereby TCB shall irrevocably and unconditionally grant an option to the Security Trustee entitling the Security Trustee to require TCB to purchase such Assets required by the Security Trustee upon occurrence of a Trigger Event or Event of Default or upon failure of the Sellers to honour their respective obligations under the Purchase Undertaking. Page 22

23 Proceeds from the sale of the Assets pursuant to the Sale Undertaking or as the case may be the Purchase Undertaking or the Option Agreement shall be used to pay the amount outstanding under the Sukuk at such date inclusive of all fees and other monies payable under the Sukuk and/or the Financing Documents. On exercise of the option under the Option Agreement, TCB shall remit to the Issuer the relevant option price within ninety (90) days from the exercise of such option. (iv) Availability Period Upon completion of documentation and compliance of all relevant conditions to the reasonable satisfaction of the Lead Arranger and the Facility Agent, the Sukuk shall be issued within six (6) months from the date of the Securities Commission s ( SC ) approval or such other period as approved by SC from time to time. (v) Permitted Investments The Issuer/the Facility Agent shall be permitted from time to time to utilise funds held in the Designated Accounts to make Permitted Investments, provided that such funds utilised for Permitted Investments shall be remitted to the Designated Accounts in a timely manner to meet any payment obligations of the Issuer when due and payable. Permitted Investments (which shall be syariah compliant investments as approved by the relevant Syariah Council) means: i) Deposits in income bearing accounts and negotiable certificates of deposits issued by discount houses, licensed commercial banks, merchant banks and/or finance companies (as defined in the Banking and Financial Institutions Act 1989); or ii) iii) Bonds, treasury bills or finance instruments issued by the Government of Malaysia; or Other debt capital market instruments (other than debentures which are capable of being converted into equity and the Sukuk being issued here) of private entities having, a maturity date of at least five (5) business days before any payment date to match the utilisation of the monies and being denominated in Ringgit Malaysia; and Page 23

24 in the case only of investments of the type referred to in paragraph (iii) above, rating of AAA ID and MARC 1 ID (or its equivalent) as determined by MARC or a recognised rating agency or such other higher rating as is capable of being issued by the said rating agencies from time to time. (vi) Financial Covenants (i) Ample Zone shall maintain the following minimum annual Finance Service Cover Ratio ( FSCR ) commencing from the first financial year of the date of first issue except for the final calculation year (i.e. 6 th anniversary year of the Sukuk); and Class A B C Rating AAA ID AA ID A ID Minimum FSCR Requirements 2.00 times 1.75 times 1.50 times (ii) Annual FSCR is defined as the ratio of cumulative Available Cashflow to the Issuer s finance service obligations under the Sukuk, during the succeeding twelve (12) months period. At the end of each financial year, the auditors of Ample Zone will review and confirm the calculation of FSCR accordingly. (vii) Available Cashflow In relation to the financial year on which the FSCR is to be calculated, the sum of: i) All estimated income to be received by Ample Zone under the IRA and any other receipts of a capital or revenue nature under any contract or agreement (with the exception of any receipts under the Financing Documents) in the succeeding twelve (12) months; ii) iii) iv) income to be received by the Issuer/Sellers on cash balances of the Designated Accounts and Permitted Investments; cash in the four (4) Sub-lease Collection Accounts, Collection Account, SPRA, and SPV Expenses Account; Proceeds of insurance claims. Page 24

25 Less: i) Estimated taxation to be paid in the succeeding twelve (12) months; ii) iii) Estimated capital expenditure to be incurred in the succeeding twelve (12) months; and Any other expected payments to be made by Ample Zone in the succeeding twelve (12) months. (viii) Covenants: Positive So long as any commitments under the Sukuk remain outstanding, Ample Zone will, unless otherwise approved by the Sukuk Trustee: i) comply with all provisions of the Financing Documents; ii) iii) iv) take out and maintain the necessary insurance policies which is as far as possible syariah compliant (during the periods in which such policies are relevant) and notify of any material events which may give rise to any claim or right of action under the insurance policies; maintain an accounting system and keep adequate records in compliance with applicable statutory requirements; deliver to the Sukuk Trustee within 180 days of the end of each financial year its audited financial statements, and within 90 days of each half year period its unaudited financial statements for that period together with a certificate signed by two of its directors, to the effect that such financial statements present a true and fair view; v) use all reasonable endeavours to collect all monies becoming due to the Issuer; vi) vii) open and/or maintain each of the required Designated Accounts and pay all amounts into such accounts and make all payments from such accounts, only as permitted under the Financing Documents; take such steps as may have been notified by the Sukuk Trustee following the occurrence of an Event of Default to remedy or mitigate the effect of that Event of Default or any other step as the Sukuk Trustee may reasonably request; Page 25

26 viii) ix) comply with such other positive covenants as required under the SC s Guidelines on Minimum Contents Requirements for Trust Deeds; and any other customary covenants as advised by the solicitors. (ix) Covenants: Negative As long as any payment obligations under the Sukuk remain outstanding, the Issuer shall not, unless otherwise approved by the Sukuk Trustee: i) Indebtedness: incur, assume or permit to exist any indebtedness other than: a) the indebtedness under the Sukuk; and b) indebtedness created pursuant to the transaction agreements entered into pursuant to the Sukuk programme; ii) iii) iv) Negative Pledge: create or permit to subsist any other security interests other than security interests arising out of any arrangements entered into by the Issuer for the provision of performance and maintenance of the Sukuk or other financing facilities (as stated in Indebtedness above); Share Capital: reduce its authorised and issued paid-up capital; Dissolution: dissolve its affairs or consolidate with or merge with any other person; v) Surrender rights etc.: surrender, transfer, assign, relinquish or otherwise dispose any of its rights and interest under the Financing Documents and any other documents entered into by Ample Zone (except as permitted or required under the Financing Documents); vi) Render void: do or suffer to be done any act, matter or thing whereby any insurance may be rendered void, voidable or incapable of being effected, maintained or renewed; Page 26

27 vii) Additional Contracts: enter into any other contracts, agreements or other arrangements or commitments, other than the Financing Documents and documenting arrangements that are permitted under the Financing Documents; viii) Other Businesses: carry on any other business other than its authorised business in accordance with its obligations under the Financing Documents; and ix) any other customary covenants as advised by the solicitors. (x) Special Covenant in IRA Under the IRA, there will be a covenant on the part of the Sellers to issue a written confirmation to the Sukuk Trustee and the Issuer confirming the unconditional availability of funds to satisfy the final ijarah rental payment under the IRA at least six (6) months prior to the due date thereof together with documentary evidence satisfactory to the Sukuk Trustee to that effect. A failure to comply with such covenant on the part of the Sellers shall constitute one of the Trigger Events. (xi) Material Adverse Effect A Material Adverse Effect shall mean a material adverse effect on the financial position of the Issuer or its ability to perform its obligations under any of the Financing Documents. (xii) Trigger Events A Trigger Event will occur if there is an Ijarah Event of Default under the IRA. An Ijarah Event of Default occurs if: i) any Seller, as the lessees, shall fail to pay any amounts under the IRA within seven (7) business days after the scheduled payment dates; or ii) any Seller shall have failed or neglected to issue a written confirmation to the Sukuk Trustee and the Issuer confirming the unconditional availability of funds to satisfy the final ijarah rental payment under the IRA at least six (6) months prior to the due date thereof together with documentary evidence satisfactory to the Sukuk Trustee to that effect; or Page 27

28 iii) iv) any Seller shall breach or fail to perform or observe any provision of the IRA other than those set out in items (i) and (ii) above and where such breach or failure is capable of remedy, such Seller shall have failed to remedy such breach within a period of seven (7) business days after written notice has been served on such Seller requiring remedy of same; or any Seller shall become insolvent. An Ijarah Event of Default / Trigger Event would also tantamount to an Event of Default under the Trust Deed and the Sukuk. The Sukukholders on happening of a Trigger Event have the following option:- a) to instruct Ample Zone to exercise the Purchase Undertaking and require the Sellers to buy the respective Assets; b) in the event of a failure on the part of the Sellers to complete the acquisition of the respective Assets, to exercise the Option granted by TCB under the Option Agreement and require TCB to purchase the relevant Assets. In addition to the above, the Sukukholders may by extraordinary resolution require the Sukuk Trustee to declare the outstanding Sukuk to be immediately due and payable and to instruct the Security Trustee to exercise all rights and remedies under the other Security Documents. The Trigger Events / Ijarah Events of Default will be set out in the Ijarah Rental Agreements to be executed between each of the Sellers and the Issuer. (xiii) Application of Proceeds of Sale Upon the exercise of the Sale Undertaking, the Purchase Undertaking or as the case maybe the Option Agreement, and completion thereof, the proceeds of sale shall be applied in the following order of priority: i) To pay taxes, statutory and regulatory charges, if any; ii) iii) To pay the remuneration, cost and expenses in relation to the exercise; To pay all professional fees and expenses; Page 28

29 iv) Any Ijarah Rental payment (profit portion) under Class A Sukuk accrued but unpaid; v) Any Ijarah Rental payment (principal portion) under Class A Sukuk outstanding; vi) vii) viii) ix) Any Ijarah Rental payment (profit portion) under Class B Sukuk accrued but unpaid; Any Ijarah Rental payment (principal portion) under Class B Sukuk outstanding; Any Ijarah Rental payment (profit portion) under Class C Sukuk accrued but unpaid; Any Ijarah Rental payment (principal portion) under Class C Sukuk outstanding; and x) Lastly, any balance remaining to the Sellers (towards settlement of the deferred payment consideration amount). In the event that the Sellers and/or TCB shall be unable to honour their obligations on exercise of the Purchase Undertaking, the Sale Undertaking or as the case may be the Option Agreement, Ample Zone/Sukuk Trustee shall take the necessary actions including appointment of an independent and reputable property agent to act as servicer and to proceed with the disposal of the Assets or part thereof to raise proceeds to meet the payment obligations under the Sukuk. For the avoidance of doubt, nothing shall be implied that Ample Zone/Security Trustee shall be obliged to exercise the undertaking/option granted to it/them under the Purchase Undertaking/Option Agreement. (xiv) Sukukholders Recourse On occurrence of an Event of Default, the Sukuk Trustee may and shall (if instructed by the Majority Sukukholders (being Sukukholders voting in favour of an Extraordinary Resolution i.e. a resolution passed at a meeting of Sukukholders by a majority consisting of not less than 75% by persons voting thereat) by notice to the Issuer and at the option of the Majority Sukukholders declare the Sukuk (notwithstanding the stated maturity dates of the Sukuk) to become immediately payable whereupon the Sukuk and all other monies payable to the Sukukholders under the Sukuk, the Trust Deed and the other financing documents shall become immediately due and payable. Page 29

30 In addition the Sukuk Trustee/Security Trustee shall also be entitled:- (a) (b) (c) by notice in writing to the Sellers notwithstanding the lease period, declare that the lease of the Assets under the IRA shall immediately terminate; to enforce the Trust Deed in accordance with the terms thereof and the security interest created under the security documents shall become immediately enforceable; without prejudice to the generality of the foregoing, to exercise its rights under the Purchase Undertakings and/or the Option Agreement. (xv) Compensation for Late Payment In the event of any overdue payments of any amounts due under the Sukuk, the Issuer shall pay to the Sukukholders compensation on such overdue amounts at a rate and manner prescribed by the SC's Syariah Advisory Council or such other relevant regulatory authority in accordance with syariah principle from time to time. (xvi) Trading of Sukuk The Sukuk shall be traded in the secondary market on a willing-buyer willing-seller basis. (xvii) Purchase and Cancellation The Issuer may at any time purchase the Sukuk in the open market at any price or by private treaty. The Sukuk purchased will be cancelled and may not be resold or reissued. (xviii) Mandatory Redemption Unless previously redeemed, purchased and cancelled, the Sukuk shall be redeemed at their respective face values on the respective maturity dates of the rental Series. (xix) Authorised Depository The Sukuk will be deposited with BNM as the approved depository agent. No physical delivery of the Sukuk will be made. Page 30

31 (xx) Documentation Financing Documents include: i) Subscription Agreement; ii) iii) iv) Asset Purchase Agreement; Declarations of Trust; Power of Attorney; v) Assignment of Pandan Kapital SPA; vi) vii) viii) ix) Purchase Undertaking; Sale Undertaking; Ijarah Rental Agreements; Option Agreement; x) Sukuk notes; xi) xii) xiii) xiv) xv) Depository and Paying Agency Agreement; Service Agency Agreements; Trust Deed; security documents; and all other documents delivered in connection with the transactions contemplated in this term sheet and as advised by the solicitors. (xxi) Other Conditions The Sukuk will moreover be at all times governed by such rules and directives (whether or not having the force of law) required of or imposed on the Primary Subscriber/Investors by SC or any other appropriate authorities. Page 31