PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSED BOND ISSUE. Previous name: Public Bank Limited (up to 14 April 1966)

Transcription

1 PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSED BOND ISSUE APPENDIX 1 BACKGROUND INFORMATION 1. NAME OF ISSUER Public Bank Berhad Previous name: Public Bank Limited (up to 14 April 1966) 2. ADDRESS 27 th Floor, Menara Public Bank, 146 Jalan Ampang, Kuala Lumpur 3. BUSINESS REGISTRATION NO H 4. DATE AND PLACE OF INCORPORATION PBB was incorporated in Malaysia as a public company limited by shares on 30 December DATE OF LISTING 6 April STATUS Resident / non-bumiputera controlled company 7. PRINCIPAL ACTIVITIES PBB is principally engaged in all aspects of banking business and the provision of related financial services. The PBB Group is principally engaged in all aspects of banking, merchant banking, financing, stock broking, provision of finance to purchasers of licensed public vehicles, provision of related financial services, management of unit trusts and sale of trust units, and investment holding

2 8. BOARD OF DIRECTORS Particulars of Board of Directors The Directors of PBB, all of whom are Malaysians, and their respective shareholdings in PBB based on the Register of Directors Shareholdings as at 30 April 2004 are as follows: - Direct Indirect Shareholders Tan Sri Dato Sri Dr. Teh Hong Piow Tan Sri Dato Thong Yaw Hong Datuk Tay Ah Lek Dato Lee Kong Lam Dato Yeoh Chin Kee Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah Address 132 Jalan Ara, Bangsar Baru, Kuala Lumpur 90 Lorong Setiabistari Satu, Bukit Damansara, Kuala Lumpur Apartment 169-2, Sri Wangsaria Condominium, Jalan Ara, Bangsar Baru, Kuala Lumpur 155 Jalan 5/42, Petaling Garden, Petaling Jaya, Selangor Darul Ehsan 51 Jalan BU2/3, Bandar Utama, Damansara, Petaling Jaya, Selangor Darul Ehsan Istana Pahang, Persiaran Raja Chulan, Kuala Lumpur No. of PBB No. of PBB Shares Held % *6 Shares Held % *6 1,562, ,599,337,203 * , ,543,750 * *3 *5 5,289, ,965 2,322, *4 * ,

3 Direct Indirect Shareholders Haji Abdul Aziz bin Omar Dato Dr. Haji Mohamed Ishak bin Haji Mohamed Ariff Lee Chin Guan Address 8 Lorong Jelutong, Bukit Damansara, Kuala Lumpur 19 Jalan Bunga Melati 2/2, Shah Alam, Selangor Darul Ehsan 63-1 Bangsar Aman, Jalan Limau Purut, Bangsar, Kuala Lumpur No. of PBB No. of PBB Shares Held % *6 Shares Held % * Notes: *1 *2 *3 *4 *5 *6 Deemed to have interest in ordinary shares of RM0.50 each in PBB ( PBB Shares ) held by other corporations by virtue of Section 6A(4) of the Act. These other corporations are Sekuriti Pejal Sdn Bhd, Kepunyaan Perindustrian Sdn Bhd, Syarikat Kepunyaan Khas Sdn Bhd, Consolidated Teh Holdings Sdn Bhd, Securities Holdings Sdn Bhd, Selected Holdings Sdn Bhd, Monivest Sdn Bhd, Kepunyaan Pejal Sdn Bhd, Selected Securities Sdn Bhd, Fairbanks Holdings (Pte) Ltd, Kayakita Corporation Sdn Bhd, Kepunyaan Chintamani Sdn Bhd, Kepunyaan Moden Sdn Bhd, London & Pacific Holdings Sdn Bhd, LPI Capital Bhd, Lonpac Insurance Bhd, Luhur Management Sdn Bhd, Magnificient Equities Sdn Bhd, Tong Meng Industries Ltd, Tong Meng Company (Malaya) Sdn Bhd and TMI Securities Pte Ltd. Deemed to have interest in PBB Shares held by Puan Sri Datin Lem Foong Ying (spouse), Thong Oi Fong (daughter) and Thong Thiam Leong (son) by virtue of Section 122A of the Act and by Equity Heights Sdn Bhd by virtue of Section 6A(4) of the Act. Deemed to have interest in PBB Shares held by Lek Holdings Sdn Bhd by virtue of Section 6A(4) of the Act. Deemed to have interest in PBB Shares held by Datin Lau Kim Gueh (spouse) by virtue of Section 122A of the Act. Less than 0.01%. Excluding a total of 129,709,800 PBB Shares bought-back by PBB and retained as treasury shares as at 30 April

4 9. MAJOR SHAREHOLDERS The major shareholders (holding 5% or more of the issued and paid-up share capital) of PBB and their respective shareholdings in PBB based on the Register of Substantial Shareholders of PBB as at 30 April 2004 are as follows: - Shareholders Tan Sri Dato Sri Dr. Teh Hong Piow Sekuriti Pejal Sdn Bhd Consolidated Teh Holdings Sdn Bhd Employees Provident Fund Board Direct Indirect No. of PBB No. of PBB Shares Held % * 4 Shares Held % *4 1,562, ,599,337,203* ,789, ,841,713* ,959, ,423,280* ,823, Notes: *1 Deemed to have interest in PBB Shares held by other corporations by virtue of Section 6A(4) of the Act. These other corporations are Sekuriti Pejal Sdn Bhd, Kepunyaan Perindustrian Sdn Bhd, Syarikat Kepunyaan Khas Sdn Bhd, Consolidated Teh Holdings Sdn Bhd, Securities Holdings Sdn Bhd, Selected Holdings Sdn Bhd, Monivest Sdn Bhd, Kepunyaan Pejal Sdn Bhd, Selected Securities Sdn Bhd, Fairbanks Holdings (Pte) Ltd, Kayakita Corporation Sdn Bhd, Kepunyaan Chintamani Sdn Bhd, Kepunyaan Moden Sdn Bhd, London & Pacific Holdings Sdn Bhd, LPI Capital Bhd, Lonpac Insurance Bhd, Luhur Management Sdn Bhd, Magnificient Equities Sdn Bhd, Tong Meng Industries Ltd, Tong Meng Company (Malaya) Sdn Bhd and TMI Securities Pte Ltd. *2 Deemed to have interest in PBB Shares held by Syarikat Kepunyaan Khas Sdn Bhd and Kepunyaan Perindustrian Sdn Bhd by virtue of Section 6A(4) of the Act. *3 Deemed to have interest in PBB Shares held by Selected Holdings Sdn Bhd, Securities Holdings Sdn Bhd and Kayakita Corporation Sdn Bhd by virtue of Section 6A(4) of the Act. *4 Excluding a total of 129,709,800 PBB Shares bought-back by PBB and retained as treasury shares as at 30 April

5 10. AUTHORISED AND PAID-UP SHARE CAPITAL The authorised issued and paid-up capital of PBB as at 30 April 2004 are as follows: No. of PBB Shares Par Value RM Authorised 10,000,000, ,000,000, Issued and paid-up 6,587,126, ,293,563, * Within 7 market days from 28 May 2004, the consolidation of PBB Shares would be effected to reflect the consolidation of par value RM0.50 to RM1.00 RM - 5 -

6 PRINCIPAL TERMS AND CONDITIONS 1. NAMES OF PARTIES INVOLVED IN THE PROPOSED TRANSACTION 1.1 Principal Adviser Public Merchant Bank Berhad ( PMBB ) 1.2 Arranger 1.3 Valuer 1.4 Solicitors To the Joint Lead Managers as to English Law Allen & Overy Shook Lin & Bok, Joint Law Venture To the Issuer as to Malaysian Law Adnan Sundra & Low 1.5 Financial Adviser 1.6 Technical Adviser 1.7 Guarantor 1.8 Trustee. Exempted since the Proposed Bond Issue falls within Schedule 4 of the Securities Commission Act, Facility Agent 1.10 Primary Subscriber(s) and Amount Subscribed - 6 -

7 1.11 Underwriter(s) and Amount Underwritten The Proposed Bond Issue was not underwritten Syariah Adviser (applicable to Islamic PDS) 1.13 Central Depository Euroclear System and Clearstream Banking, société anonyme, Luxembourg 1.14 Fiscal and Paying Agent Citibank, N.A. 5 Carmelite Street London 1.15 Reporting Accountant 1.16 Others External Auditors KPMG Joint Lead Managers and Joint Bookrunners Barclays Bank PLC and Citigroup Global Markets Limited 2. PRINCIPLE Conventional 3. FACILITY DESCRIPTION Subordinated Notes due 2014 Callable with step-up in 2009 in the form of a Regulation S Eurobond in registered form. 4. ISSUE SIZE USD350 million - 7 -

8 5. ISSUE PRICE per cent 6. TENOR OF THE FACILITY/ISSUE 10 years and 3 months from 22 June 2004 with an option for the Issuer to redeem the Notes on 22 September INTEREST/COUPON/PROFIT OR EQUIVALENT RATE (%) The Notes will bear interest at the rate of per cent per annum from (and including) 22 June 2004 to (but excluding) 22 September 2009 and, thereafter, at a rate per annum equal to the US 5-year Treasury Rate as at 22 September 2009 plus 3.10 per cent. 8. INTEREST/COUPON/PROFIT PAYMENT FREQUENCY Semi-annually in arrears except for the first interest period of 9 months to 22 March INTEREST/COUPON/PROFIT PAYMENT BASIS 30/ YIELD TO MATURITY (%) % p.a. to 22 September 2009 (optional redemption date) 11. SECURITY/COLLATERAL (IF ANY) Nil 12. DETAILS ON UTILISATION OF PROCEEDS The net proceeds of the Proposed Bond Issue (which will be classified as Tier 2 capital of PBB) will be utilised for general banking and other corporate purposes. 13. SINKING FUND (IF ANY) Nil - 8 -

9 14. RATING Standard & Poor s Rating Services BBB+ Moody s Investors Service Limited Baa1 15. FORM AND DENOMINATION The Notes will be issued in registered form in denominations of US$10,000 or any amount in excess thereof which is an integral multiple of US$1,000. The Notes will be represented initially by a Global Certificate registered in the name of a nominee of a common depositary on behalf of Euroclear Bank S.A./N.V. as operator of the Euroclear System and Clearstream Banking, société anonyme, Luxembourg. Notes in definitive form will be available only in the limited circumstances set out in the Global Certificate. 16. MODE OF ISSUE The Proposed Bond Issue will be undertaken by way of a book-building process to be conducted by the Joint Bookrunners. 17. SELLING RESTRICTION The issue of, offer for subscription or purchase of, or invitation to subscribe for or purchase of, the Bonds shall be made exclusively to persons outside Malaysia other than investors in the United States of America. United States Regulation S Category 2, United Kingdom, Hong Kong, Singapore, Japan, and The Netherlands. 18. LISTING STATUS To be listed on the Singapore Exchange Securities Trading Limited ( Singapore Exchange ). 19. MINIMUM LEVEL OF SUBSCRIPTION There is no minimum level of subscription for the Proposed Bond Issue

10 20. OTHER REGULATORY APPROVALS REQUIRED IN RELATION TO THE ISSUE, OFFER OR INVITATION AND WHETHER OR NOT OBTAINED PBB has obtained the approval of BNM vide BNM s letters dated 9 February 2004 and 13 May 2004 for the Proposed Bond Issue. PBB has also obtained the approval of the Controller of Foreign Exchange, BNM to issue debt securities to non-resident investors vide the letters from the Controller of Foreign Exchange, BNM dated 11 February 2004 and 14 May ADDITIONAL INFORMATION FOR ISLAMIC PDS 22. CONDITIONS PRECEDENT As extracted from the Subscription Agreement dated 15 June 2004: (1) The obligation of the Joint Lead Managers under this Agreement to subscribe for the Notes is subject to the following conditions precedent: (a) (b) (c) (d) there having been, as at the Closing Date, no change or development involving a prospective change in the condition (financial or otherwise), business, properties, shareholders' equity or results of operations of the Issuer or the Group since the date of this Agreement or from that set out in the Offering Circular the effect of which is, in the sole judgment of the Joint Lead Mangers so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Notes as contemplated in the Offering Circular (exclusive of any amendment or supplement thereto); no event making any of the representations and warranties contained in clause 5 untrue or incorrect in any material respect on the Closing Date as though they have been given and made on such date and the Issuer having performed all the obligations to be performed by it under this Agreement on or before the Closing Date; the execution and delivery by all parties thereto of the Agreements on or prior to the Closing Date; the Singapore Exchange agreeing to list the Notes on or before the Closing Date;

11 (e) (f) (g) (h) the Issuer having appointed a process agent in England in respect of any legal action or proceedings arising out of or in connection with this Agreement, the Agency Agreement and the Notes and the Issuer having delivered to the Joint Lead Managers a copy of a letter signed by such process agent confirming such appointment; on or prior to the Closing Date, there having been delivered to the Joint Lead Managers an opinion, in form and substance satisfactory to the Joint Lead Managers, dated the Closing Date, of (i) Allen & Overy Shook Lin & Bok, legal advisers to the Joint Lead Managers as to matters of English law and (ii) of Adnan Sundra & Low, legal advisers to the Issuer as to matters of Malaysian law; on the date of this Agreement and on the Closing Date, there having been delivered to the Joint Lead Managers comfort letters, in form and substance satisfactory to the Joint Lead Managers, dated the date of this Agreement and the Closing Date, respectively, and addressed to the Joint Lead Managers from KPMG, the auditors of the Issuer; on or prior to the Closing Date, there having been delivered to the Joint Lead Managers a copy of: (i) (ii) (iii) the Memorandum and Articles of Association of the Issuer; the resolution(s) of the Board of Directors of the Issuer authorising the execution of the Agreements, the issue of the Notes and the entry into and performance of the transactions contemplated thereby; a certificate signed by a duly authorised officer of the Issuer to the effect stated in sub-clause 7.1(a) and subclause 7.1(b); and any other documents (including, but not limited to, any resolutions, consents and authorities) relating to the issue of the Notes which the Joint Lead Mangers may reasonably require; and (i) no rating agency having downgraded, nor given notice or made any public announcement of any intended or potential downgrading or of any review or surveillance of, the rating accorded to the Notes or any debt securities of the Issuer

12 (j) there having been delivered to the Joint Lead Managers a copy of: (i) letters dated 9th February, 2004 and 13th May, 2004 from the Bank Regulation Department of Bank Negara Malaysia to the Issuer approving the application by the Issuer for the issue of the Notes and to treat the Notes as Tier II capital of the Issuer; (ii) letters dated 11th February, 2004 and 14th May, 2004 from the Exchange Control Department of Bank Negara Malaysia to the Issuer in respect of the issue of the Notes; and (iii) a letter dated 3rd June, 2004 from the Securities Commission to Public Merchant Bank Berhad approving the issue of the Notes; all other necessary governmental approvals and filings required for the issuance of the Notes, compliance by the Issuer with all the provisions of this Agreement and the other Agreements and all other agreements or documents related hereto or referred to herein having been obtained or made, as the case may be, and such approvals being in full force and effect; and (k) on or prior to the Closing Date the Issuer having furnished to the Joint Lead Managers such further certificates and documents as the Joint Lead Managers shall have reasonably requested. (2) In the event that any of the conditions set out in sub-clause 7.1 is not satisfied on or before the Closing Date, this Agreement shall (subject as mentioned below) terminate and the parties hereto shall (except for the liability of the Issuer in relation to expenses as provided under, or under any arrangements referred to in, clause 10, except as provided in clause 12 and except for any liability arising before or in relation to such termination) be under no further liability arising out of this Agreement, provided that the Joint Lead Managers may in their discretion and by notice to the Issuer waive satisfaction of any of the above conditions or any part of them

13 23. REPRESENTATIONS AND WARRANTIES As extracted from the Subscription Agreement dated 15 June 2004: (1) As a condition of the obligation of the Joint Lead Managers to subscribe and pay for or procure subscriptions and payment for the Notes, the Issuer represents and warrants to the Joint Lead Managers that, on the date of this Agreement and on the Closing Date: (a) the consolidated balance sheets of the Issuer, its subsidiaries and its associated companies (the Group) and the consolidated profit and loss accounts of the Group, in each case appearing in the Preliminary Offering Circular and the Offering Circular, were prepared in accordance with the requirements of Malaysian law and with accounting principles generally accepted in Malaysia consistently applied (Malaysian GAAP) and that they present fairly the financial condition of the Group as at the dates at which they were prepared and the results of the operations of the Group in respect of the periods for which they were prepared and that there has been no material adverse change or development involving a prospective material adverse change in the condition (financial or otherwise), business prospects, properties, shareholders' equity or results of operations of the Group since 31st December, 2003;

14 (b) (c) (i) each of the Preliminary Offering Circular (at the date of its publication) and the Offering Circular contains all material information with respect to the Issuer, the Group and the Notes (including all information which, according to the particular nature of the Issuer, the Group and of the Notes, is necessary to enable investors and their investment advisers to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer, the Group and of the rights attaching to the Notes), (ii) the Preliminary Offering Circular, at the date of its publication did not, the Offering Circular, at the date of this Agreement, does not and, if amended or supplemented, at the date of any such amendment or supplement and at the Closing Date, will not, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (iii) the statements of fact contained in (A) the Offering Circular relating to the Issuer, the Group and the Notes are, (B) the Preliminary Offering Circular, at the date of its publication were, (C) any supplement to the Offering Circular, at the date of its publication will be, and (D) any written material provided by the Issuer and used in the offering and sale of the Notes, at the date of publication of such material, was in every material particular true and accurate and not misleading and that there are no other facts in relation to the Issuer, the Group and the Notes the omission of which would in the context of the issue of the Notes make any statement in the Offering Circular and/or the Preliminary Offering Circular and/or any such other material, misleading in any material respect, (iv) the statements of intention, opinion, belief or expectation contained in (A) the Offering Circular are, (B) the Preliminary Offering Circular, at the date of its publication were, and, (C) any supplement to the Offering Circular, at the date of its publication will be, honestly and reasonably made or held and (v) all reasonable enquiries have been and will be made to ascertain such facts and to verify the accuracy of all such statements; the Issuer and each of its subsidiaries has been duly incorporated and is validly existing under the laws of the place of its incorporation with full power and authority to own, lease and operate its properties and assets and conduct its business as described in the Preliminary Offering Circular and the Offering Circular and the Issuer is able lawfully to execute and perform its obligations under the Notes and the Agreements;

15 (d) (e) (f) (g) (h) the issue of the Notes and the execution and delivery of the Agreements by the Issuer have been duly authorised by the Issuer and that upon due execution, issue and delivery the same will constitute legal, valid and binding obligations of the Issuer enforceable in accordance with their respective terms subject to the laws of bankruptcy and other laws affecting the rights of creditors generally; the execution and delivery of the Agreements and the issue and distribution of the Notes and the performance of the terms of the Notes and the Agreements by the Issuer will not infringe any law or regulation of Malaysia or, so far as the Issuer is aware, any other law or regulation and are not contrary to the provisions of the constitutional documents of the Issuer and will not result in any breach of the terms of, or constitute a default under, any instrument, agreement or order to which the Issuer is a party or by which it or its property is bound; upon issue the Notes will constitute direct, unconditional, unsecured and subordinated obligations of the Issuer and will rank pari passu among themselves and at least pari passu in right of payment with all other present and future unsecured and subordinated obligations of the Issuer, subject as described in the conditions of the Notes; the Issuer has received confirmation from Bank Negara Malaysia that the Notes, when issued in accordance with the Agency Agreement and will qualify as Tier II Capital in accordance with the circular issued by Bank Negara Malaysia dated 11th November, 1998; all necessary actions and things required to be taken, fulfilled or done (including without limitation the obtaining of any consent, authorisation, permission, order, licence, permit or the making of any filing or registration) for the issue of the Notes, the carrying out of the other transactions contemplated by the Agreements or the compliance by the Issuer with the terms of the Agreements (including with respect to the payment of principal and interest on the Notes, as the case may be,) have been, or by the Closing Date will be, taken fulfilled or done;

16 (i) (j) (k) (l) (m) the Issuer and each of its subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorisations, (ii) transactions are recorded as necessary to (A) permit preparation of financial statements in conformity with Malaysian GAAP and (B) maintain accountability for assets, (iii) access to assets is permitted only in accordance with management's general or specific authorisation, (iv) the recorded accountability for assets is compared with existing assets as required and appropriate actions taken with respect to any differences, and (v) the Issuer and each of its subsidiaries has made and kept books, records and accounts which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of such entity and provide a sufficient basis for the preparation of the Issuer's consolidated financial statements in accordance with Malaysian GAAP; and the Issuer's current management information and accounting control system has been in operation for at least 12 months during which neither the Issuer, nor any of its subsidiaries has experienced any material difficulties with regard to (i) through (v) above; neither the Issuer nor any of its subsidiaries has any material relationships with unconsolidated entities that are contractually limited to narrow activities that facilitate the transfer of or access to assets by the Issuer or any of its subsidiaries, such as structured finance entities and special purpose entities that are reasonably likely to have a material effect on the liquidity of the Issuer or any of its subsidiaries or the availability thereof or the requirements of the Issuer or any of its subsidiaries for capital resources; neither the Issuer nor any of its subsidiaries is involved in any litigation or arbitration proceedings relating to claims or amounts which are material in the context of the issue of the Notes nor so far as the Issuer is aware, is any such litigation or arbitration pending or threatened; the Issuer is in compliance with all applicable laws and regulations of Bank Negara Malaysia and the Malaysian capital markets; no material labour dispute, work stoppage, slowdown or other conflict with the employees of the Group exists or, to the knowledge of the Issuer, is threatened or imminent;

17 (n) (o) (p) (q) (r) (s) except for insurance relating to collateral which it holds, the Issuer has insurance cover against risks and losses of the business carried on by it which are in the reasonable opinion of the Issuer prudent and customary for companies carrying on similar businesses in Malaysia and all such insurance is current and duly in force; subject as described in the Conditions of the Notes, payments of principal and interest on the Notes will be made by the Issuer without withholding or deducting for any taxes, duties or other charges of whatever nature of Malaysia or any political subdivision or authority thereof or therein having power to tax; no event has occurred which would constitute (after the issue of the Notes) an event of default or enforcement event under the Notes or which with the giving of notice or the lapse of time or other condition would (after the issue of the Notes) constitute an event of default or enforcement event; neither the Issuer, its affiliates (as defined in Rule 405 under the U.S. Securities Act of 1933, as amended (the Securities Act) nor any persons (other than the Joint Lead Managers, as to whom no representation or warranty is made) acting on its or their behalf have engaged or will engage in any directed selling efforts (as defined in Regulation S under the Securities Act) in respect of the Notes; the Issuer reasonably believes that there is no substantial U.S. market interest (as defined in Regulation S under the Securities Act) in the debt securities of the Issuer and that the Issuer, its affiliates and any person (other than any Joint Lead Manager, as to whom no representation or warranty is made) acting on its or their behalf have complied with and will comply with the offering restrictions requirement of Regulation S under the Securities Act; and it has not issued and will not, for a period of 30 days after the Closing Date, issue, without the prior consent of the Joint Lead Managers, any press or other public announcement referring to the proposed issue of Notes unless the announcement adequately discloses that stabilising action may take place in relation to the Notes

18 (2) Without prejudice to the other rights or remedies of the Joint Lead Managers, the Issuer undertakes to each Joint Lead Manager that if that Joint Lead Manager or any of its affiliates, directors, officers, employees, agents or controlling persons (within the meaning of section 15 of the Securities Act and Section 20 of the U.S. Securities Exchange Act of 1934, as amended) (together with the Joint Lead Managers, each a Relevant Party) incurs any liability, damages, cost, loss or expense (including, without limitation, legal fees, costs and expenses) (a Loss) arising out of, in connection with, or based on: (a) (b) any actual or alleged breach of the representations, warranties and undertakings contained in, or made or deemed to be made by the Issuer under, this Agreement; or any untrue or misleading (or allegedly untrue or misleading) statement in, or any omission (or alleged omission) from: (i) the Preliminary Offering Circular, (ii) any other materials used in the offering and sale of the Notes prepared by (A) the Issuer, or (B) the Joint Lead Managers and approved by the Issuer, or (iii) the Offering Circular (or any supplement thereto), the Issuer shall indemnify that Joint Lead Manager and shall pay to that Joint Lead Manager on demand an amount equal to such Loss. No Joint Lead Manager shall have any duty or obligation, whether as fiduciary or trustee for any Relevant Party or otherwise, to recover any such payment or to account to any other person for any amounts paid to it under this sub-clause EVENTS OF DEFAULT As extracted from Schedule 2 of the Agency Agreement dated 22 June 2004: If the Issuer shall fail to pay principal of, or interest or any other amount on, any Note when due and such default continues for seven days (each such event, an Event of Default ), the holder of such Note may, at its discretion and without further notice, institute such proceedings as it chooses to enforce the obligations of the Issuer under such Note and may institute proceedings in Malaysia (but not elsewhere) for the winding up of the Issuer; provided that such holder shall have no right to accelerate payment of such Note in the case of such default in the payment of interest on or other amounts owing under, such Note or a default in the performance of any other covenant of the Issuer in such Note or under the Fiscal Agency Agreement

19 If (i) a court or agency or supervisory authority in Malaysia having jurisdiction in respect thereof shall have instituted a proceeding or entered a decree or order for the appointment of a receiver or liquidator in any insolvency, rehabilitation, readjustment of debt, marshalling of assets and liabilities, or similar arrangements involving the Issuer or all or substantially all of its properties, or for the winding up of or liquidation of its affairs and such proceeding, decree or order shall not have been vacated or shall have remained in force undischarged or unstayed for a period of 60 days or (ii) the Issuer shall file a petition to take advantage of any insolvency statute (any of the foregoing being a Winding Up Proceeding and an Event of Default), the holder thereof may, at such holder s option by written notice to the Issuer and the Fiscal Agent, declare the principal of, and interest on, such Note to be due and immediately payable, whereupon the principal of, and interest on, such Note shall become and be immediately due and payable. If proceedings with respect to the insolvency or liquidation of the Issuer should occur, holders of the Notes may be required to pursue their claims for payment of principal of, interest on or any other amount in respect of the Notes in proceedings in Malaysia. In addition, to the extent that holders of the Notes are entitled to any recovery with respect to the Notes in any Malaysian proceedings, such holders may not be entitled in such proceedings to a recovery in US dollars and may only be entitled to a recovery in Malaysian Ringgit which would be based on the US dollar conversion rate in effect on the date the Issuer entered into such insolvency or liquidation proceeding. A judgment obtained in a superior court in England (other than a judgment of such court given on appeal from a lower court) in respect of any suit, action or proceeding against the Issuer based upon the Notes may be registered and enforced in Malaysia under the Reciprocal of Enforcement of Judgments Act 1958 of Malaysia provided that the judgment is final and conclusive as between the parties and there is a sum of money payable thereunder. In any other case, such judgment may be sued upon and judgment obtained in the courts of Malaysia without re-examination or re-litigation of the matters adjudicated upon provided that such judgment satisfies certain conditions applicable under common law in Malaysia. 25. PRINCIPAL TERMS AND CONDITIONS FOR WARRANTS (WHERE APPLICABLE) 26. OTHER PRINCIPAL TERMS AND CONDITIONS FOR THE ISSUE As extracted from Schedule 2 of the Agency Agreement dated 22 June 2004: (i) The Notes are direct and unsecured obligations of the Issuer and are subordinated in the manner described below. The Notes rank and will rank pari passu without any preference among themselves

20 (ii) Subordination The principal of, and interest and any additional amounts payable on, the Notes will be subordinated in right of payment upon occurrence of any Winding Up Proceeding to the prior payment in full of all deposit liabilities and all other liabilities of the Issuer, except in each case to those liabilities which by their terms rank equally in right of payment with or which are subordinated to the Notes. Each Noteholder irrevocably waive its rights as a creditor to the extent necessary to give effect to the subordination provisions of the Notes. In order to implement these subordination provisions, each Noteholder agrees that at the time when a Winding Up Proceeding shall have occurred and be continuing, any amounts that would be due to such Noteholder in the absence of these subordination provisions will be applied:- (a) (b) first, to the payment in full of all claims of depositors and all other obligations of the Issuer ranking senior in the right of payment to the Notes (including interest on such claims accruing after the date of commencement of such Winding Up Proceeding); and thereafter, to the payment, equally and rateably, of amounts owing under the Notes and all obligations of the Issuer ranking equally in right of payment with the Notes. No Noteholder may exercise or claim any right of set-off in respect of any amount owed to it by the Issuer arising under or in connection with the Notes and each Noteholder shall by virtue of its subscription, purchase or holding of any Note, be deemed to have waived all such rights of set-off to the fullest extent permitted by law. The Issuer agrees that so long as any of the Notes remain outstanding, it will not create, issue, assume or otherwise incur any loan, debt, guarantee or other obligation which shall be, or shall purport to be, subordinated debt of the Issuer and which shall, at the time it is created, issued, assumed or otherwise incurred or at any time thereafter, be considered to be, capital of the Issuer for any regulatory purposes unless such obligation ranks junior to or equal in right of payment with the Notes in the case of any distribution of assets of the Issuer in any liquidation of the Issuer. As a consequence of these subordination provisions, if a Winding Up Proceeding should occur, the Noteholders may recover less rateably than the holders of deposit liabilities or the holders of other unsubordinated liabilities of the Issuer. Moreover, holders of the Notes would likely be required to pursue their claims on the Notes in proceedings in Malaysia

21 To the extent that holders of the Notes are entitled to any recovery with respect to the Notes in any Malaysian proceedings, such holders may not be entitled in such proceedings to a recovery in US dollars and may be entitled to a recovery in Malaysian Ringgit. The Issuer has agreed to indemnify the holders of the Notes against certain losses incurred as a result of any judgment or order being given or made for any amount due under the Notes and such judgment or order being expressed and paid in a currency other than US dollars. Any amounts due under such indemnification will be subordinated in right of payment as described above. (iii) Documentation Standard Euromarket documentation, including an Offering Circular dated 15 June 2004, Subscription Agreement dated 15 June 2004, Agency Agreement dated 22 June 2004, comfort letter from the Issuer s auditors and legal opinions, all such documentation to the satisfaction of Barclays and Citigroup. (iv) Governing Law The Notes are governed by, and construed in accordance with, English law save for the subordination provisions which are governed by Malaysian law