PTC INTEREST/COUPON (%)

Transcription

1 PTC INTEREST/COUPON (%)

2 1 Background Information (a) Issuer (i) Name : GW Capital Sdn Bhd ( GW Capital or Issuer ) (ii) Address : Suite 11.1A, Level 11, Menara Weld, 76 Jalan Raja Chulan, Kuala Lumpur (iii) Business Registration No. (iv) Date/Place of Incorporation (v) Date of Listing (in case of a public listed company) : D : 9 January 2004 / Malaysia : Not applicable (vi) Status : Resident controlled company Non-Bumiputera controlled company (vii) Principal Activities : The principal activities of the Issuer are limited to acquiring from its shareholder, Goldwealth Capital Sdn Bhd ( Goldwealth ) the Identified Eligible Receivables (as defined herein) and issuing private debt securities to fund such purchase, from time to time. Identified Eligible Receivables shall mean the outstanding balance of the receivables ( the Receivables ) payable by the participating members ( Members ) of Koperasi Konsumer Malaysia Berhad ( KKMB ) to KKMB under the 1

3 sale and purchase agreements entered into between KKMB and the Members ( the Member SPAs ) which are assigned by KKMB to Goldwealth pursuant to a Supply Agreement dated 19 July 2001 and a Supplemental Agreement dated 24 April 2002 (collectively referred to as the Supply Agreement ), which meets the Eligibility Criteria as set out in Clause 2z(vii) of this Principal Terms and Conditions of the Proposal ( PTC ) and which are to be sold by Goldwealth to the Issuer. (viii) Board of Directors : i) Mr. Kong Sin Seng Executive Director ii) En. Mohd. Azlan Bin Mohammed Independent Non- Executive Director iii) Mr. Loh Chen Peng Independent Non- Executive Director (ix) Structure of shareholdings and names of shareholders (x) Authorised and paid up capital : As at 31 March 2004 Shareholder No. of Shares % Goldwealth : Authorised capital as at 31 March 2004 RM100,000 comprising 100,000 ordinary shares of RM1.00 each Paid-up capital as at 31 March 2004 RM2 comprising 2 ordinary shares of RM1.00 each 2

4 2 Principal Terms and Conditions (a) Names of the parties involved in the proposed transaction (where applicable) (i) Principal Adviser(s) /Lead Arranger(s) : Amanah Short Deposits Berhad (5305-U) ( ASD ) (ii) Arranger(s) : Not applicable (iii) Valuers : Not applicable (iv) Solicitors : Messrs Lee Hishammuddin Allen & Gledhill (v) Financial Adviser (vi) Technical Adviser : Mulpha Capital Markets Sdn Bhd ( W) : Not applicable (vii) Guarantor : Widetech (Malaysia) Berhad ( Widetech ) ( U) (viii) Trustee : AmTrustee Berhad ( V) (ix) Facility Agent : ASD (x) Primary Subscriber(s) and amount subscribed (where applicable) (xi) Underwriter(s) and amount underwritten : Not applicable : The Commercial Papers ( CPs ) will initially be underwritten by ASD. A syndicate of approved banks and/or financial institutions shall then be 3

5 invited to underwrite the CPs during the tenure of the CP Programme (as defined herein). The underwriter(s) shall underwrite the CPs for the initial total facility amount of RM50.0 million and may sell down its underwriting commitment to other financial institutions during the tenure of the CP Programme. (xii) Syariah Adviser (where applicable) (xiii) Central Depository : Not applicable : ASD (xiv) Paying Agent : ASD (xv) Reporting Accountant : Not applicable (xvi) Servicer : Goldwealth (xvii) Substitute Servicer (xviii) Collection Agent : Mr. Kong Sin Seng. In the event of a Servicer Event of Default, the Substitute Servicer shall take over all the roles and responsibilities of the Servicer as set out in Clause 2z(iv) of this PTC and all Servicing Fees (as defined in Clause 2z(vi)) shall thereafter be paid to the Substitute Servicer. : Angkatan Koperasi Kebangsaan Malaysia Berhad (National Co-operative Organisation of Malaysia) ( ANGKASA ), a co-operative society registered under the Co-operative Societies Act 1993 which acts as a collection agent for participating co-operative societies/corporations in respect of repayment of credit facilities granted by them to their members/employees and which effects payments to the participating co-operative 4

6 (b) Principle : Conventional. societies/corporations through direct deductions from salaries payable to the members/employees. (c) Facility Description : Underwritten Commercial Papers Programme ( CP Programme ). (d) Issue Size (RM) : Up to RM50.0 million (nominal value) only. (e) Issue Price (RM) : he CPs issued pursuant to the CP Programme shall be issued at a discount to face value. The issue price payable for each CP is computed in accordance with the following formula as specified in the Rules On Fully Automated System For Issuing / Tendering issued by Bank Negara Malaysia ( BNM ):- I = FV x 1 ( r x d ) where : I = Issue Price / Proceeds FV = The face value / nominal value d = The number of days in the tenor of the CP (which shall include the issue date but shall exclude the maturity date) r = The applicable yield/rate at which the offer was accepted (expressed to three decimal places) (f) Tenor of the facility/ issue : The CP Programme shall have a tenor of seven (7) years from the date of first issuance of the CPs ( Initial Issue Date ). However, CPs can only be issued to purchase Identified Eligible Receivables from Goldwealth for a period of three (3) years commencing from the Initial Issue Date ( the Receivables Purchase 5

7 Period ). After the Receivables Purchase Period, CPs can only be issued for the purpose of rollover of CPs, to be issued upon the maturity of such existing CPs. During the tenor of the CP Programme, the Issuer shall have the option of issuing various CPs with tenor of one (1), two (2), three (3) or six (6) months. (g) Interest or equivalent rate (%) (please specify) (h) Interest Payment Frequency (i) Interest Payment Basis (j) Yield to Maturity (%) (k) Security/ Collateral (if any) : The Interest rate or its equivalent rate will only be known on the proposed issue day/tender day when the Issuer confirms the acceptance of the allocated tender bids/private placement. : The frequency of interest payment is dependent on the frequency of issuance of CPs by the Issuer for maturities of one (1), two (2), three (3) or six (6) months at a discounted basis, which shall be payable in arrears upon the respective maturity dates of the CPs. : Actual number of days elapsed on a 365 days basis. : The Yield to Maturity of the CP Programme will only be known on the proposed issue day/tender day when Issuer confirms the acceptance of the allocated tender bids/private placement. : The CPs issued by the Issuer will constitute direct, unconditional and secured obligations of the Issuer, ranking pari-passu without preference or priority among themselves, and shall be secured by the following: (a) First legal charge by Goldwealth in favour of the Trustee over the entire issued and paidup share capital of the Issuer; 6

8 (b) Assignment by the Issuer in favour of the Trustee of the Identified Eligible Receivables of not less than 1.38 times the aggregate CPs outstanding and such assignments shall include all of the Issuer s rights, title, benefit and interest in, to and under the Identified Eligible Receivables and any payments or amounts due from time to time to the Issuer thereunder; (c) Assignment in favour of the Trustee of all rights, title, benefit and interest in, to and under the Designated Accounts (as defined herein); (d) Assignment by Goldwealth in favour of the Issuer free from any prior security interest or claims of any nature whatsoever, the entire and all of Goldwealth s rights, title, interest and benefit in and to the credit balance and all moneys now and hereafter or from time to time received in the bank account opened by KKMB with Malayan Banking Berhad, ( KKMB s Account ) into which ANGKASA deposits from time to time all collections from the Receivables deducted by ANGKASA (net of commission paid to ANGKASA) together with all of Goldwealth s interest therein and thereto and the rights of enforcement thereof (which have been assigned by KKMB to Goldwealth pursuant to a Supply Agreement dated 19 July 2001), with the consent of KKMB, together with a power of attorney therein contained (Goldwealth Designated Bank Account Assignment); (e) Assignment by the Issuer in favour of the Trustee free from any prior security interest 7

9 or claims of any nature whatsoever, the entire and all of the Issuer s rights, title, interest and benefit in and to the credit balance and all moneys now and hereafter or from time to time received in the KKMB s Accounts into which ANGKASA deposits from time to time all collections from the Receivables deducted by ANGKASA (net of commission paid to ANGKASA) together with all of the Issuer s interest therein and thereto and the rights of enforcement thereof (which have been assigned by Goldwealth to the Issuer pursuant to Goldwealth Designated Bank Account Assignment) together with a power of attorney therein contained (Issuer Designated Bank Account Assignment). (f) Debenture in favour of the Trustee creating a first fixed and floating charge over the whole of the Issuer s undertaking, property, assets and rights, both present and future; (g) Undertaking from Goldwealth, the Shareholder of the Issuer (Please refer to Clause 2z(ix) for the details on the undertaking by Goldwealth); (h) Debenture in favour of the Trustee creating a first fixed and floating charge over the whole of Goldwealth s undertaking, property, assets and rights, both present and future; (i) Irrevocable corporate guarantee ( CG ) from Widetech guaranteeing all amounts due and payable under the CP Programme; and (j) Assignment by the Issuer in favour of the Trustee of all the Issuer s rights, interest, title 8

10 and benefits, in, to and under all the Financing Documents. (l) Details of utilisation of proceeds (m) Sinking Fund (if any) : The proceeds of the CPs shall be utilized towards payment to Goldwealth for the purchase of Identified Eligible Receivables of up to RM50.0 million and to rollover the CPs previously drawndown for the purchase of Identified Eligible Receivables. : The following designated accounts ( Designated Accounts ) shall be opened and maintained with a bank acceptable to the Lead Arranger :- (i) (ii) (iii) Disbursement Account; Master Collection Account; and Debt Service Reserve Account. Upon enforcement of the security, the holders of the CPs ( Noteholders ) shall have priority in respect of amounts standing to the credit of all Designated Accounts, in priority over other creditors of the Issuer. i) Disbursement Account The Issuer shall open a Disbursement Account to remit and/or deposit all proceeds from the issuance of the CPs. All proceeds from the issuance of CPs shall be utilized to pay Goldwealth for the Identified Eligible Receivables purchased save for the first issuance of the CP whereby the following sums payable by Goldwealth shall be deducted and paid on behalf of Goldwealth towards the following purposes: a) Payment to relevant parties for the fees and expenses incurred in relation to the issuance of the CPs; and b) To transfer an amount equal to the 9

11 required Minimum Interest Reserve (as defined herein) into the Debt Service Reserve Account. The Disbursement Account shall be operated solely by the Trustee or such other person appointed by the Trustee. ii) Master Collection Account All collections from the Receivables deducted by ANGKASA (net of commission paid to ANGKASA) shall be transferred on a weekly basis but at least two (2) business days prior to each Payment Date (as defined herein) from KKMB s Account directly into the Master Collection Account. On a weekly basis, the Issuer shall transfer to Goldwealth all collections other than collections received in relation to the Identified Eligible Receivables sold to the Issuer by transferring the same collections into the Goldwealth s account. Payment Date shall mean the last business day of each month, commencing in the next calendar month following the Initial Issue Date. All funds deposited into this account shall be maintained herein and can only be withdrawn in the following manner: (a) On each Payment Date, to be utilized in the following order of priority: 1) To transfer into the Debt Service Reserve Account such amount necessary to achieve the required Minimum Interest Reserve (as defined herein); and 10

12 2) Towards payment of the Servicing Fee; and (b) Upon the maturity of any CP, towards redemption of the nominal value of the CPs outstanding from time to time. Any surplus shall be retained in the account and shall be utilized in accordance with the order of priority set out above on the next Payment Date or upon maturity of any CP. The Master Collection Account shall be operated solely by the Trustee or such other person appointed by the Trustee. iii) Debt Service Reserve Account ( DSRA ) The Issuer shall open a DSRA to deposit transfers from the Disbursement Account and Master Collection Account for the Minimum Interest Reserve (as defined herein). Goldwealth and the Issuer shall maintain at all times a Minimum Interest Reserve which is the sum of (a) the interest reserve of 6.30% or the prevailing interest rate for the CPs to be issued (whichever is higher) multiplied by (b) the aggregate nominal value outstanding of the CPs, divided by 2. All funds deposited into this account shall be maintained herein and can only be withdrawn on each Payment Date and will be utilized only towards payment of the difference between the nominal value of that CP and the proceeds received from the issuance of that CP in the case of rollover ( Interest Portion ). In the event of an Early Amortization Event 11

13 (n) Rating : Credit Rating Assigned Programme or an Event of Default being declared, all moneys in the DSRA shall be transferred to the Master Collection Account. The DSRA shall be operated solely by the Trustee or such other person appointed by the Trustee. CP Indicative Rating P2 Name of Rating Agency Rating Agency Malaysia Berhad ( RAM ). (o) Form and Denomination : The CPs shall be represented by Global Certificates in bearer form to be deposited with the Depository and are exchangeable for Definitive Certificates only in certain limited circumstances. The denomination of the CPs shall be RM1,000,000 or any integral multiples thereof at the time of issuance. (p) Mode of Issue : Tender with the Tender Panel Members ( TPM ) and/or private placement via Fully Automated System For Issuing / Tendering ( FAST ) by BNM, without prospectus. (q) Selling Restriction : The CPs 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 specified under Section 4(6) of the Companies Act, 1965 (as amended from time to time). (r) Listing Status : The CPs shall not be listed on the Bursa Securities or on any other stock exchange. 12

14 (s) Minimum Level of Subscription (RM or %) (t) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) : Not applicable. The CP Programme shall be fully underwritten. : No other approval required. (u) Additional information PDS (v) Conditions Precedent for : (i) Islamic Principle Not applicable (ii) Identified Assets Not applicable (iii) Purchase and selling price/rental (where applicable) Not applicable : To include but not limited to the following: A B Execution of documents (i) The Financing Documents have been signed and stamped or endorsed as exempted from stamp duty under the relevant orders. The Issuer (i) The majority of the board of directors of the Issuer comprise of directors who are not employees or major shareholders or persons connected to the non-independent directors and major shareholders of Goldwealth and Widetech. 13

15 C (ii) Certified true copies of the Certificate of Incorporation, and the Memorandum and Articles of Association, Forms 13, 24 and 49 of the Issuer. (iii) A certified true copy of a board resolution and shareholders resolution of the Issuer authorising, among others, the execution of the Financing Documents. (iv) A certified true copy of a list of the Issuer s authorised signatories and their respective specimen signatures. (v) A report of the companies search conducted at the Companies Commission of Malaysia ( CCM ) confirming that save for those charges which have been disclosed in writing to and approved by the Lead Arranger prior to the issue date of the CPs, there are no other charges that have been registered in the CCM against the Issuer s assets. (vi) A report of the winding up search conducted at the Official Receiver s office confirming that the Issuer, Goldwealth and Widetech have not been wound up. General (i) The CP Programme shall be subject to the approval of the Securities Commission ( SC ). (ii) A confirmation from RAM that the rating is at least P2 for the CP Programme. 14

16 (iii) A legal opinion from the Lead Arranger s solicitors addressed to the Lead Arranger and the Trustee advising with respect to, among others, the legality, validity and enforceability of the Financing Documents that all the conditions precedent have been fulfilled or waived and where required, all the necessary Financing Documents have been presented for registration with the relevant registries including but not limited to the CCM and the High Court of Malaya. (iv) Confirmation that the Designated Accounts have been opened for the purposes stated herein with a financial institution (the Financial Institution ) licensed under the Banking and Financial Institution Act, 1989 holding a minimum rating of at least A3/P1 or such other equivalent rating and approved by the Lead Arranger and the particulars of such accounts together with acknowledgement (in form and substance acceptable to the Lead Arranger) from the Financial Institution and mandates have been provided by the Issuer to the Trustee, the Lead Arranger and/or the Goldwealth. (v) The Lead Arranger shall have received confirmation from the Trustee that cash deposit has been received or an irrevocable Bank Guarantee in favour of the Issuer (in form and substance acceptable to the Lead Arranger) ( Bank Guarantee ) 15

17 has been procured, guaranteeing the payment by Goldwealth in the case of the first sale of Identified Eligible Receivables, the total Estimated Annual Expenses (as defined herein) expected to be incurred by the Issuer during the period from the first issuance of the CPs until the last day of the remaining term of the Identified Eligible Receivables to be sold to the Issuer (rounded up to the nearest year), less the fees and expenses to be deducted from the proceeds of the first sale of Identified Eligible Receivables pursuant to Clause 2(m) herein. (vi) A legal opinion from the due diligence solicitors addressed to the Lead Arranger confirming that a legal due diligence review on the Issuer, its business and operations (including all material contracts entered into by the Issuer and material litigation involving the Issuer), have been conducted. (vii) All acknowledgments (in form and substance acceptable to the Lead Arranger) from the relevant parties to each of the legal assignments referred to in Clauses 2(k) and 2z(viii) have been obtained. (viii) Any other conditions as may be advised by the Lead Arranger s solicitors. (w) Representations and Warranties : The Issuer represents and warrants to the Trustee and each Noteholder that, amongst others:- 16

18 i) Status: The Issuer is a company duly incorporated and validly existing under the laws of Malaysia; ii) Power and authorisations: The Memorandum and Articles of Association of the Issuer include provisions which give power, and all necessary governmental or official authority has been obtained and action taken, for the Issuer to own its assets, carry on its transactions and operations as they are now being conducted, and to execute and deliver, and perform the transactions contemplated in the Financing Documents, and the Financing Documents constitute valid and binding obligations of the Issuer, enforceable in accordance with their respective terms; iii) Consents: No authorisation, approval, consent, license, exemption, registration, recording, filing or notarisation and no payment of any duty or tax and no other action whatsoever which has not been duly and unconditionally obtained, made or taken is necessary or desirable to ensure the validity, enforceability or priority of the liabilities and obligations of the Issuer or the rights of the Facility Agent ( FA ) under the Financing Documents; iv) Litigation: No litigation, arbitration or administrative proceeding or claim which might by itself or together with any other such proceedings or claims either have a material effect on the Issuer s business, assets or condition or materially affect its/their ability to observe or perform its/their respective obligations under the Financing Documents, is presently in progress or pending or, to the best of the knowledge, information and belief of the Issuer, threatened against the Issuer or 17

19 any of its assets; and v) Any other representations and warranties as may be advised by the Lead Arranger s solicitors. (x) Events of Default : Standard events of default clauses shall apply, including but not limited to the following:- i) Non Payment: The Issuer fails to pay any amount due under the CP Programme or any of the Financing documents on the due date or on demand, if so payable; ii) Breach of Obligation: The Issuer fails to observe or perform any of its/their the obligations under the CP Programme any Financing Documents or any undertaking or arrangement entered by the Issuer in connection herewith or other than an obligation of the type referred to in Clause 2(x)(i), and the Issuer fails to remedy such failure within the agreed cure period and/or to a FA s satisfaction; iii) Valid Ownership: The Issuer shall for any reason fail to have a valid ownership interest in the Identified Eligible Receivables and the proceeds thereof, free and clear of all adverse claims; iv) Rating: The rating of the CP Programme falls below the minimum rating of P3 from the RAM; v) Ineffective or Invalid Provision: Any material provision of the Financing Documents is or becomes, for any reason, invalid, illegal, void or unenforceable or if any law is brought into effect which would prevent the Issuer from performing any of their obligations thereunder; 18

20 vi) Mislead and/or Invalid Information: Any representation or statement made by the Issuer in the Financing Documents or in any certificate, notice, statement or report are found to be materially incorrect or misleading; vii) Cessation of Business: The Issuer changes or threatens to change the nature or scope of its business, suspends or threatens to suspend a substantial part of the present business operations which it now conducts directly or indirectly, or any governmental authority expropriates or threatens to expropriate all or part of its assets; viii) Cross Default: The Issuer stops or threatens to stop payment in respect of any of its indebtedness generally or any indebtedness of the Issuer becomes due or capable of being declared due before its stated maturity or is not repaid on its due date (or within any applicable grace period) or where the security created for such other indebtedness becomes enforceable; ix) Insolvency: The Issuer becomes unable to pay its debts within the meaning of section 218(2) of the Companies Act, 1965 or becomes unable to pay its debts as they fall due or suspends or threatens to suspend making payments (whether of principal or interest) with respect to all or any class of its debts; x) Appointment of Receiver, Legal Process: Where a receiver has been appointed over the whole or substantial part of the assets of the Issuer; 19

21 xi) Event of Default under the CP s Trust Deed: An Event of Default shall have been declared by the Trustee under the Trust Deed and /or a cancellation event shall have been declared by the FA under the CP Programme; xii) Invalidity: At any time it becomes unlawful by the laws of Malaysia or by the laws of any applicable jurisdiction for the Issuer to perform any of its obligations under the Financing Documents or due to the fault or omission of the Issuer the Financing Documents becomes unenforceable against the Issuer; xiii) Material Adverse Change: Any other event occurs or circumstances arises which, in the reasonable opinion of the Trustee has or will materially and adversely affect the ability of the Issuer to perform all or any of its obligations under or otherwise comply with the terms of the Financing Documents; xiv) Section 176: The Issuer, its creditors or any of its shareholders or any other person on its behalf takes any step or legal proceedings or applications or creditors scheme of arrangement are started or threatened under section 176 of the Companies Act 1965 against the Issuer; xv) License: Any license, permits, authorisation, approval, consent, order, exemption, registration, filing or notarisation is revoked or withheld or modified or is otherwise not granted or fails to remain in full force and effect which has or will impair or prejudice the Issuer s ability to comply with the provisions 20

22 of the CP Programme or any of the Financing Documents; or xvi) Composition of 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 or a meeting is convened for the purpose of considering a resolution or other steps are taken for making an administration order against or for winding up, dissolution or liquidation of the Issuer or a petition for winding up is presented against the Issuer, unless during or following such reconstruction the Issuer becomes or is declared to be insolvent; xvii) other such events of default deemed necessary as may be advised by the solicitors. Upon the issuance of a written notice of the occurrence of an Event of Default from the Trustee, the Issuer and/or Goldwealth shall have a period of seven (7) days to remedy such Event of Default, failing which an Event of Default shall automatically be declared without any further notice and the CP Programme shall immediately terminate and all moneys shall be applied in the manner provided for under the heading Application of Proceeds Event of Default. (y) Principal terms and conditions for warrants (where applicable) : Not applicable 21

23 (z) Other principal terms and conditions for the issue z(i) z(ii) Underwriting Fee Underwritten Rate : The Underwriting Fee for the CPs shall be payable on each Underwriter s commitment amount yearly in advance to the Underwriter(s), the first commencing and payable upon signing of the Financing Documents based on the ratings by RAM as follows: P1 : 0.50% p.a. P2 : 0.75% p.a. : The Underwritten Rate shall be the aggregate of (i) the margin stipulated herein below; and (ii) the weighted average Cost of Funds ( COF ) (as defined below) of the Underwriters. For the avoidance of doubt, unless at any time the Underwriters comprise solely of discount houses, the COF of any underwriter that is a discount house shall not be included in calculating the weighted average COF of the underwriters. The margins herein below mentioned shall be based on the credit ratings assigned by RAM, as follows :- P1 : 0.50% + COF P2 : 0.75% + COF COF is hereby defined as the cost of borrowings of the respective Underwriter(s) for the relevant period of maturity in addition to which shall be added the cost of maintaining Statutory Reserves and Liquid Assets (if applicable) and/or complying with any other requirements as may from time to time be imposed by BNM or any other regulatory authorities. 22

24 z(iii) No Petition : The agreements to be entered into between the Issuer and all the service providers will contain clauses to the effect that during the period when the CPs are outstanding and for a period of one (1) year and one (1) day thereafter, the counterparties will not bring any proceedings for the winding up or bankruptcy of the Issuer. z(iv) Role of Servicer : The main functions of the Servicer include: 1. monitoring the collections of the Identified Eligible Receivables and promptly identifying and monitoring the Delinquent Receivables and the Defaulted Receivables (as defined in Clause 2z(vii)(23)); 2. informing the Issuer, Trustee and KKMB promptly as soon as the Servicer is aware of any Delinquent Receivable or Defaulted Receivable and working closely with KKMB to ensure that all necessary steps are taken promptly to collect such receivables; 3. segregating the collections of the Receivables received in the Master Collection Account into the collections related to the Identified Eligible Receivables purchased by the Issuer and the collections related to the Receivables owned by Goldwealth and upon the concurrence of the Trustee, transfer the collections related to the Receivables owned by Goldwealth to Goldwealth; and 4. preparing and issuing monthly servicer reports in respect of the matters set out in items 1, 2 and 3 of this section and any other roles or functions carried out by the Servicer 23

25 in relation to the Receivables, such monthly reports to be in a format approved by the Lead Arranger. z(v) Collection Commission : 0.60% of the amount collected under the Identified Eligible Receivables is chargeable by ANGKASA. All collections from the Receivables deducted by ANGKASA will be the amount net of commission due to ANGKASA. z(vi) Servicing Fee : 1.43% of the amount collected under the Identified Eligible Receivables. z(vii) Eligibility Criteria : The Receivables to be identified and sold to the Issuer must fully meet certain eligibility criteria including but not limited to the eligibility criteria set out below ( Eligibility Criteria ) which must exist on each Assignment Date (as defined herein): 1. The Receivable (save for those Receivables that have been assigned by Goldwealth to the existing financier) must be absolutely and beneficially owned by Goldwealth free from all encumbrances; 2. The Receivable must have been created in accordance with existing credit standards no less stringent than those generally applied by Goldwealth; 3. The Receivable must be one with respect to which no selection procedures materially adverse to the Issuer or Noteholders have been authorized in selecting the account; 4. The Receivable must be one to which Goldwealth is not prohibited or restricted by 24

26 law, contract or otherwise from effecting the transfer free from all encumbrances; 5. The Receivable has been originated in the ordinary course of business of Goldwealth and KKMB and in accordance with its standard policies; 6. The Receivable must be in relation to a Member who is a resident of Malaysia, and each item of goods or services relating to the Receivable has been delivered or provided in Malaysia; 7. The Receivable must be one which all amounts payable thereunder are denominated in Ringgit Malaysia; 8. To the best of Goldwealth s knowledge and belief, the Receivable is not the subject of any adverse claim or set-off or security claim by any party and there are no circumstances which exist which would give any Member the right to refuse to make any payment under the relevant contract relating to the Receivable; 9. The contract relating to the Receivable does not require Goldwealth to be responsible for any loss or damage or any maintenance services with respect to the relevant goods upon delivery thereof and there is documentary proof evidencing the delivery thereof; 10. The Receivable has arisen under a contract that conforms in all material respects and represents the entire agreement between KKMB and the relevant Member covering the Receivables; 11. The Receivable has a term of between twelve (12) and sixty (60) months, with a weighted 25

27 average remaining term of the pool of Receivables of no more than fifty four (54) months for each Assignment Date save and except for the Assignment Date in respect of the first issuance of the CPs, and the contract relating to the Receivable provides for equal monthly payments after the date of the assignment; 12. Goldwealth has received at least one (1) monthly payment from ANGKASA since the commencement of the contract relating to the Receivable; 13. There is only one (1) original contract relating to the Receivable. 14. The relevant contract relating to the Receivable, and all other documentation relating to the relevant goods or services, have been duly authorized and executed, are in full force and effect upon stamping, and constitute the legal, valid and binding obligation of the relevant Member enforceable against the relevant Member in accordance with its terms; 15. The contract relating to the Receivable does not contravene any applicable laws, rules or regulations; and no party to the contract will be in violation of any such law, rule or regulation; 16. The contract relating to the Receivable is not invalid, voidable or terminable for any reason whatsoever; 17. There is no prohibition or restriction on, or requirement for consent to be obtained or notice to be given (other than pursuant to Section 4(3) of the Civil Law Act 1956) for, any assignment, transfer or sale of, or the 26

28 grant of any participation in the Receivable; 18. There is documentary proof that the relevant Member has instructed ANGKASA to make payment under the contract relating to the Receivable by way of salary deduction; 19. To the best knowledge of Goldwealth, no litigation has been instituted by any third party against the relevant Member with respect to the Receivable, the related contract relating to the Receivable or any other loan whatsoever granted to the relevant Member; 20. The Receivable is not at the time of its transfer to the Issuer subject to any right of rescission, set-off, counterclaim or defence, other than applicable bankruptcy and insolvency defences and does not provide for the substitution, addition or exchange of any of the related goods that would result in a reduction in any payments due thereunder; 21. The contract relating to the Receivable has not been modified, extended or rewritten in a material respect which may have a material adverse effect on the payment and collection of the Receivables, and Goldwealth has not waived any material terms of the contract from the time of the initial creation; 22. The Member has no funds or other assets subject to the management or control of Goldwealth and no payment in respect of the Receivables scheduled to be received after the relevant Assignment Date has been received on or before such Assignment Date; 23. The Receivable is not a Defaulted Receivable or Delinquent Receivable; where: (a) a Defaulted Receivable is a Receivable (i) more than five (5) months in arrears in 27

29 accordance with the repayment dates as set out in the related contract; (ii) with respect to which an Event of Bankruptcy has occurred with respect to the relevant Member; (iii) Goldwealth has determined is non-recoverable under its standard policies; or (iv) which the terms of the related contract thereof have been amended more than once or Goldwealth has waived a material term more than once. (b) a Delinquent Receivable (other than a Defaulted Receivable) is a Receivable more than four (4) months in arrears in accordance with the repayment dates as set out in the related contract.; 24. The Receivable has not been included in any other pool of receivables for the purpose of any securitization or financing facility; 25. The Receivable will be, and will at all times be capable of being, segregated and identified for ownership purposes; 26. The relevant Member is not an affiliate or employee of Goldwealth; 27. No Event of Bankruptcy shall have occurred with respect to the relevant Member, where an Event of Bankruptcy means, with respect to any person: (i) that such person: (a) shall generally not pay its debts as such debts become due; (b) shall admit in writing its inability to pay its debts generally; or (c) shall make a general assignment for 28

30 the benefit of creditors; (ii) any proceeding shall be instituted by or against such person or any subsidiary of such person seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, authorization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or authorization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property under any bankruptcy, insolvency, reorganization or similar law; or (iii) such person shall take any corporate, partnership or other similar appropriate action to authorize any of the actions set forth in the preceding sub-clauses (i) (a) or (i) (b).; 28. either: (a) The Member is a salaried employee of an Eligible Employer (as defined herein); or (b) The guarantor of the Member is a salaried employee of an Eligible Employer. 29. Insurance has been taken out in relation to the relevant Member insuring against injuries which renders the Member incapable of fulfilling his/her payment obligations or against death and KKMB as the named beneficiary under the insurance policy has assigned the rights, interest and benefits relating to such insurance to Goldwealth; 30. Any other criteria deemed necessary as may 29

31 be advised by the solicitors/lead Arranger. Assignment Date shall mean any date specified in the offer notice in connection with the sale of Identified Eligible Receivables to be made by Goldwealth to the Issuer from time to time. Eligible Employer shall mean any government body approved by KKMB and Goldwealth whose staff meet the eligibility criteria for the supply of goods under the instalment payment scheme as set out under KKMB and Goldwealth s standard guidelines for the same. z(viii) Legal Assignment : The assignment of the Identified Eligible Receivables by Goldwealth from time to time shall be by way of an absolute legal assignment and Goldwealth will represent and warrant that the assignment of Identified Eligible Receivables will be a valid assignment from Goldwealth to the Issuer of all Goldwealth s rights, title, benefit and interest therein and in the proceeds thereof. z(ix) Undertaking by Goldwealth : Goldwealth will enter into a Shareholder s Undertaking which must include but is not limited to the main terms below: (i) Goldwealth shall ensure at all times that the Identified Eligible Receivables assigned to the Noteholders shall be at least 1.38 times of the aggregate CPs outstanding; (ii) Goldwealth shall provide additional Identified Eligible Receivables and/or cash to the Issuer in the event the Issuer has insufficient cash for payment of the Interest Portion and/or the redemption of the nominal value of CP and any 30

32 payment/advances made to the Issuer in relation thereof shall be fully subordinated to the CPs; (iii) Goldwealth shall promptly pay all expenses incurred by the Issuer including any taxes owed and/or any other sums owing to the service providers engaged by the Issuer throughout the tenor of the CP Programme and any payment/advances made to the Issuer in relation thereof shall be fully subordinated to the CPs; (iv) Goldwealth shall, prior to any sale of Identified Eligible Receivables to the Issuer, either deposit cash or procure a bank guarantee in favour of the Issuer (in form and substance acceptable to the Lead Arranger) and if bank guarantee is procured, such bank guarantee shall be unconditional and irrevocable throughout the tenor of the CP Programme ( Bank Guarantee ) from a licensed financial institutions (as defined in the Banking and Financial Institutions Act 1989) with a minimum rating of A3/P1 or A-/MARC-1 as determined by RAM or Malaysian Rating Corporation Berhad ( MARC ) respectively, guaranteeing the payment by Goldwealth of: a) In the case of the first sale of Identified Eligible Receivables, the total Estimated Annual Expenses expected to be incurred by the Issuer during the period from the first issuance of the CPs until the last day of the remaining term of the 31

33 Identified Eligible Receivables to be sold to the Issuer (rounded up to the nearest year), less the fees and expenses to be deducted from the proceeds of the first sale of Identified Eligible Receivables pursuant to Clause 2(m) herein; and b) In the case of any subsequent sale of Identified Eligible Receivables, the total Estimated Annual Expenses expected to be incurred by the Issuer after the period covered by any existing Bank Guarantee until the last day of the remaining term of the Identified Eligible Receivables to be sold to the Issuer (rounded up to the nearest year). In the case where the last day of the remaining term of the Identified Eligible Receivables falls within the period covered by an existing Bank Guarantee, Goldwealth shall not be obliged to procure any further Bank Guarantee. Estimated Annual Expenses shall mean the aggregate of: (1) the taxes and public charges reasonably expected to be payable by the Issuer over a twelve (12) month period; (2) the fees and expenses payable by the Issuer to the Auditor, Trustee, Depository/Facility Agent, RAM, Underwriters and independent directors which in each case is expected to be payable by the Issuer over a twelve (12) month period; and 32

34 (3) miscellaneous expenses reasonably expected to be payable by the Issuer over a twelve (12) month period but shall not exceed RM10,000 per year. (v) Goldwealth shall notify the relevant Members of the assignment of the relevant Identified Eligible Receivables to the Issuer; (vi) (vii) Goldwealth shall repurchase all of the Identified Eligible Receivables purchased by the Issuer that are classified as Defaulted Receivables upon a written request issued by the Issuer at the amount equal to the price paid by the Issuer to Goldwealth for the purchase of such Defaulted Receivables less the amount collected as of the date of the repurchase; and In the event Goldwealth and/or Widetech are involved in any reorganization, restructuring or scheme of arrangement, Goldweath will ensure that the Issuer will not be affected, involved or a part of any such reorganization, restructuring or scheme of arrangement. z(x) Redemption : Unless previously redeemed or cancelled, the CPs shall be redeemed at the nominal value in full by the Issuer on maturity against presentation and surrender of the relevant acknowledgement of interest/a safe custody receipt/advice to the Paying Agent. The Issuer or any of its subsidiaries may also at any time purchase the CPs in the open market at any price by private treaty. Such CPs purchased must be cancelled. 33

35 z(xi) Due Diligence : (i) A legal review of the Issuer and its relevant documents will be undertaken by the Solicitors; (ii) A review of a random sample of the (iii) Member SPAs by the Solicitors; A review of Goldwealth s standard policies by the Solicitors; and (iv) Other reviews which are deemed necessary by the Lead Arranger s solicitors. z(xii) Permitted Investment : The Issuer shall be permitted from time to time to utilize funds held in the Master Collection Account and DSRA to make Permitted Investments, provided that such Permitted Investments shall mature not less than five (5) business days prior to each Payment Date to meet any payment obligations of the Issuer when due and payable. The Permitted Investments shall have a maturity date to match the utilization of the monies, and shall be denominated in Ringgit Malaysia. Upon maturity, the proceeds (i.e. principal plus interest) shall be remitted to the Master Collection Account and DSRA, respectively. Permitted Investments shall mean :- (i) deposits in income bearing accounts and negotiable certificates of deposits issued by licensed financial institutions (as defined in the Banking and Financial Institutions Act 1989) with a minimum rating of AA3/P1 or AA-/MARC-1 as determined by RAM or MARC respectively (which does not result in the Issuer incurring any penalty on the 34

36 principal portion of the Permitted Investment for any withdrawal prior to maturity); (ii) bonds, treasury bills or financial instruments issued by the Government; and/or (iii) other finance or capital market instruments or private entities having a minimum rating of AA3 / P1 or AA- / MARC1 as determined by RAM or MARC respectively or such other higher rating as is capable of being issued by the said rating agencies from time to time; having a maturity date no later than the maturity of the CPs or CP Programme (as the case maybe). z(xiii) Availability Period Drawdown for In the event that such investment is downgraded to below AA3 / P1 or AA- / MARC1, whichever is applicable, such investment shall be disposed of within thirty (30) days of the rating downgrade announcement. : Upon completion of documentation and compliance of all relevant conditions to the satisfaction of the Lead Arranger, the CPs shall be issued within twenty four (24) months from the date of the SC s approval. The Issuer shall inform the Lead Arranger (in writing) forty five (45) business days before the expiry of the availability period of the CPs in the event that the Issuer is desirous to extend the availability period. If the Issuer fails to notify the Lead Arranger forty five (45) business days before the expiry of the availability period, the Lead Arranger shall have the sole discretion whether to apply to the SC for 35

37 the extension of time. z(xiv) Early Amortisation Events : The occurrence of any of the following events is an Early Amortization Event : 1. the basis of taxation submitted to the tax authorities is disputed by the tax authorities, which the Trustee deems could result in significant additional tax assessments payable and notwithstanding any objection lodged by the Issuer; 2. a material breach of representation or warranty or failure to perform or observe any term or covenant made by Goldwealth in any of the relevant Transaction Documents; 3. a failure on the part of Goldwealth: (a) to make any payment or deposit required under relevant Transaction Documents within three (3) Business Days after the day such payment or deposit is required to be made; or (b) to observe or perform any other covenant or agreement of Goldwealth set forth in the relevant Transaction Documents and, if capable of being remedied, continues unremedied for a period of fourteen (14) Business Days after the earlier of discovery thereof by Goldwealth or receipt of written notice thereof; 4. a failure on the part of the Issuer to maintain the Minimum Interest Reserve; 5. any material adverse change in the condition 36

38 or operations of Goldwealth or any other event which materially affects Goldwealth s ability to collect the Identified Eligible Receivables or to perform its obligations under the Transaction Documents, in each case in the sole discretion of the Issuer; 6. in the sole discretion of the Trustee, there occurs an event which is likely to materially and adversely affect the transactions contemplated by the Transaction Documents; 7. the Three(3) Month Collateral Ratio as at any date of measurement falls below 138%. The Collateral Ratio is obtained by dividing, at such time (a) the sum of the Net Pool Balance by (b) the nominal value of the CPs outstanding less any amount in the Master Collection Account (after deducting all payments to be made on the Payment Date for that month), computed as of the last day of each calendar month; Net Pool Balance shall mean, at any time, the aggregate outstanding balance of all Identified Eligible Receivables less, at any time, (a) the aggregate of all Defaulted Receivables, minus (b) all recoveries received in respect of all Defaulted Receivables. 8. a Servicer Event of Default occurs; and 9. any other criteria as may be advised by the solicitors or the rating agency. Upon the issuance of a written notice of an Early Amortisation Event from the Trustee, the Issuer and/or Goldwealth shall have a period of seven 37

39 (7) days to remedy such Early Amortisation Event, failing which an Early Amortisation Event shall automatically be declared without any further notice and no further Receivables will be acquired by the Issuer and all moneys shall be applied in the manner provided for under the eading Application of Proceeds Early Amortization Event. z(xv) Servicer Event of Default : The occurrence of any of the following events: 1. the Servicer fails to make any payment, transfer or deposit as required under the Servicing Agreement or any other Transaction Document to which it is a party or is binding upon it; 2. the Servicer fails to perform any of its other obligations under the Servicing Agreement or any other Transaction Document to which it is a party or is binding upon it or breaches any of the terms of the Servicing Agreement or any other Transaction Document to which it is a party or is binding upon it (including the representations and warranties) and (except where in the opinion of the Issuer such failure is not capable of remedy) does not cure such default within 10 days after the earlier of (i) receipt of notice thereof from the Issuer or (ii) having actual knowledge thereof; 3. the maturity of any indebtedness of the Servicer is accelerated by the holder thereof in accordance with the terms thereof or of any agreement relating thereto or any indebtedness of the Servicer is not paid 38

40 when due; 4. a distress or execution or other legal process is levied or enforced or sued out upon or against any part of the undertaking, property, assets or revenues of the Servicer and is not discharged or stayed within thirty (30) days of having been so levied, enforced or sued out; 5. an encumbrancer takes possession of, or a provisional injunction, order for attachment or order for preservative measure is issued in relation to, or a receiver is appointed of the whole or any part of the undertaking, property, assets or revenues of the Servicer; 6. an Event of Bankruptcy occurs with respect to the Servicer; 7. The Servicer shall enter into any transaction or merger whereby it is not the surviving entity; 8. an order is made or an effective resolution is passed for winding up or dissolution of the Servicer; 9. a moratorium is agreed or declared in respect of any indebtedness of the Servicer, or any governmental authority or agency has condemned, seized, compulsorily purchased or expropriated all or a material part of the undertaking, property, assets or revenues of the Servicer; 39