PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL

Transcription

1 PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL

2 PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL BACKGROUND INFORMATION 1. Issuer (i) Name : Sunrise Berhad ( SB or Issuer ) (ii) Address : Penthouse, Wisma Sunrise, Plaza Mont Kiara No. 2 Jalan Kiara Mont Kiara Kuala Lumpur (iii) Business Registration No. (iv) Date /Place of Incorporation : 7685-V : 5 March 1968 / Malaysia (v) Date of Listing (in case of a public listed company) : 6 February 1996 (vi) Status : Resident and Non-Bumiputera controlled company. (vii) Principal Activities : Property development and investment holding (viii) Board of Directors : Directors (as at 22 November 2007) Tong Kooi Ong Dato Allan Lim Kim Huat Dato Michael Yam Kong Choy Lum Tuck Ming Leong Chew Meng Loh Chen Peng Ong Kuee Hwa Tee Keng Hoon (ix) Structure of shareholdings and names of shareholders or, in the case of public company, names of all substantial shareholders (as at 22 November 2007) : Shareholder Casa Unggul Sdn Bhd <---Direct---> No. of Ordinary Shares <---Indirect---> No. of % 1 Ordinary Shares 84,356, % 1

3 Dato Allan Lim Kim Huat 25,853, Tong Kooi Ong 1,043, ,356, Phoenixflex Sdn Bhd Tan Sri Dato Tan Chee Sing UOB Asset Management Limited 4 United Overseas Bank Limited 5 22,089, , ,089, ,586, ,586, For the purpose of calculating the percentage of interest, the voting issued and paid-up share capital of 430,622,367 ordinary shares of RM1.00 each is used. 2. Indirect interest is held through Casa Unggul Sdn Bhd by virtue of section 6A(4) of the Companies Act Indirect interest is held through Phoenixflex Sdn Bhd by virtue of section 6A(4) of the Companies Act UOB Asset Management Limited is holding the shares for its clients and unit trust funds managed on a discretionary basis whose names are not disclosed in the relevant reporting forms. 5. The interest of United Overseas Bank Limited is held through UOB Asset Management Limited. (x) Authorised share capital (as at 22 November 2007) Paid-up share capital (as at 22 November 2007) : RM1,000,000,000 divided into 1,000,000,000 ordinary shares of RM1.00 each. : Issued and paid-up share capital RM447,874,367 divided into 447,874,367 ordinary shares of RM1.00 each. Voting issued and paid-up share capital RM430,622,367 divided into 430,622,367 ordinary shares of RM1.00 each (after excluding treasury shares amounting to 17,252,000) 2. Names of parties involved in the proposed transaction (where applicable) (i) Principal Adviser /Lead Arranger : CIMB Investment Bank Berhad ( CIMB ) 2

4 (ii) Arranger : Not applicable (iii) Valuers (iv) Solicitors : Not applicable : Messrs. Zaid Ibrahim & Co. (v) Financial Adviser : Not applicable (vi) Technical Adviser (vii) Guarantor (viii) Trustee (ix) Facility Agent : Not applicable : Not applicable : Malaysian Trustees Berhad : CIMB (x) Primary Subscribers and amount subscribed (where applicable) : The Primary Subscribers (if any) will be determined prior to the issuance of the MTNs. (xi) Underwriter(s) and amount underwritten (xii) Syariah Advisers (xiii) Central Depository (xiv) Paying Agent : The MTNs will not be underwritten. : CIMB Islamic Shariah Committee, CIMB : Bank Negara Malaysia ( BNM ) : BNM (xv) Reporting Accountant : Not applicable (xvi) Others (please specify) : Lead Manager : CIMB 3 Islamic principle used : Murabahah 4 Facility description : The Issuer proposes to issue Islamic medium term notes ( MTNs ) pursuant to an Islamic medium term notes issuance programme of RM400.0 million ( Islamic MTN Programme ). The aggregate nominal value of outstanding MTNs issued pursuant to the Islamic MTN Programme, shall not at any one time exceed RM400.0 million. The MTNs shall be issued under the financing principle of Murabahah. The Murabahah transaction may be in two forms:- (i)_ Murabahah structure whereby the assets 3

5 directly belong to the Issuer Under this structure, the Issuer and the Facility Agent (acting on behalf of the holders of the MTNs ( MTNholders )) execute asset purchase agreements ( Asset Purchase Agreements ) under which the Issuer will, from time to time, sell the relevant assets ( Identified Assets ) to the Facility Agent. The purchase price ( Purchase Price ) will be the amount to be disbursed. In the event the Issuer decides to use the shares in its subsidiaries (item (ii) below), the Net Tangible Asset value of the shares will be used as the reference value. Further, for each and every issuance of the MTNs, the Purchase Price will be within the range of 0.67x and 1.33x of the value of the shares to be in compliance with the SC Syariah Advisory Council s Pricing Guidelines issued on 30 April The Issuer will use the appropriate number of shares to ensure compliance with the SC Syariah Advisory Council s Pricing Guidelines issued on 30 April Further to the Murabahah arrangement, the Facility Agent (acting on behalf of the MTNholders) will then sell the Identified Assets back to the Issuer via asset sale agreements ( Asset Sale Agreements ). The obligation of the Issuer to pay the asset sale price ( Sale Price ) is evidenced by the primary notes and the secondary notes, if any. A diagrammatical illustration of the Murabahah Structure whereby the assets directly belong to the Issuer is set out in Appendix A. (ii)_murabahah structure whereby the assets belong to the Issuer s subsidiaries Under this structure, the relevant owners ( Asset Owner ) of the Identified Assets and the Facility Agent execute Asset Purchase Agreements under which the Asset Owner will, from time to time, sell the Identified Assets to the Facility Agent. The Purchase Price will be the amount to be disbursed to the Asset Owner. The Asset Owner will on-lend the proceeds to the Issuer. The on-lending will be based on the concept of Qardh (interest free loan). 4

6 For each and every issuance of the MTNs, in the event unencumbered land (item (i) below) is used as the Identified Assets, the Purchase Price will be within the range of 0.67x and 1.33x of the market value of the identified assets to be in compliance with the SC Syariah Advisory Council s Pricing Guidelines issued on 30 April Further to the Murabahah arrangement, the Facility Agent (acting on behalf of the MTNholders) will then sell the Identified Assets back to the Issuer via asset sale agreements ( Asset Sale Agreements ). The obligation of the Issuer to pay the asset sale price ( Sale Price ) is evidenced by the primary notes and the secondary notes, if any. The Issuer then will sell the Identified Assets back to the Asset Owner. The amount will offset the amount of the Qardh which is equivalent to the Purchase Price. The Identified Assets can be in the form of:- (i) unencumbered land belonging to the whollyowned subsidiaries of the Issuer; or (ii) the Issuer s shares in its subsidiaries; or (iii) other assets to be determined prior to each issuance in respect of the Islamic MTN Programme; subject always that such assets in (i), (ii) and (iii) above are shariah compliant assets and the Purchase Price for each and every issuance will comply with the SC Syariah Advisory Council s Pricing Guidelines issued on the 30 April A diagrammatical illustration of the Murabahah Structure whereby the assets belong to the Issuer s subsidiaries is set out in Appendix B. 5 Issue Size (RM) : The aggregate nominal value of the outstanding MTNs issued under the Islamic MTN Programme at any point in time shall not exceedrm400,000,000. The nominal value of the MTNs shall be the face value of the primary notes in respect to the MTNs. 6 Issue Price (RM) : The MTNs shall be issued at par or at a discount and the issue price shall be calculated in accordance with the Rules on Fully Automated System for Issuing/Tendering ("FAST") issued by BNM, as amended or substituted from time to time ( FAST 5

7 Rules ). 7 Tenor of the Facility /Issue : MTNs Ten (10) years from the date of the first issue under the Islamic MTN Programme where the first issuance was made on 25 July The tenor of the MTNs shall be more than one (1) year and up to ten (10) years as the Issuer may select, provided that the MTNs mature prior to the expiry of the Islamic MTN Programme 8 Coupon/ profit or equivalent rate (%) (please specify) 9 Coupon/ profit Payment frequency and basis : The MTNs may be issued on a zero-coupon basis or with coupons. For MTNs issued with coupons, the coupon rate shall be determined and agreed prior to each issuance of MTNs. : In respect of MTNs which are issued with coupons, the coupons shall be payable on a semi-annual basis or such period to be agreed between the Issuer and the Lead Manager prior to each issuance of the MTNs. This clause is not applicable to non-coupon bearing MTNs. Coupon payments shall be calculated based on the actual number of days elapsed and the actual number of days basis (actual/actual). 10 Yield to Maturity (%) : To be determined at the time of issuance. 11 Security /Collateral (if any) : None 12 Details on utilisation of proceeds : The issue proceeds from the MTNs shall be utilised for the following Syariah-compliant purposes as follows: (a) to finance the capital expenditure requirements of the Issuer and/or its subsidiaries ( Group ); and (b) for the working capital purposes of the Group. 13 Sinking Fund (if any) : Not applicable 14 Rating - [Indicative] Credit Rating Assigned : The [indicative] rating for the MTNs is A+ ID. 6

8 - Name of Rating Agency - Minimum Rating : : Malaysian Rating Corporation Berhad ( MARC ) The rating for the MTNs shall be at least A- ID (or its equivalent) on each issue date of the MTNs. 15 Form and Denomination : The MTNs shall be issued in accordance with (1) the Code of Conduct and Market Practices for the Malaysian Corporate Bond Market issued by the Institut Peniaga Bon Malaysia and approved by BNM ( IPBM Code ) and (2) the Rules on the Scripless Securities under the Real Time Electronic Transfer of Funds and Securities ( Rentas ) system issued by BNM ( Rentas Rules ) and (3) the Rules on Fully Automated System for Issuing/Tendering issued by BNM, or their replacement thereof (collectively the Codes of Conduct ) applicable from time to time. The Rentas Rules shall prevail to the extent of any inconsistency between the Rentas Rules and the IPBM Code. Each tranche of the MTNs shall be represented by global certificates in bearer form to be deposited with BNM, and shall be exchanged for definitive certificates in bearer form only in certain limited circumstances. The denomination of the MTNs shall be RM1,000 or in multiples of RM1,000 at the time of issuance. 16 Mode of Issue : Via private placement on a best effort basis or a bought deal basis or book running on a best effort basis. (i) Private Placement The MTNs could be placed privately via the Lead Manager on a best effort basis to selected investors at a yield to be agreed between the Issuer and the investors. Such private placement shall be subject to terms and conditions to be agreed between the Issuer and the Lead Manager. (ii) Bought deal The MTNs may also be issued on a bought deal basis at a yield to be agreed between the Issuer and the relevant primary subscriber. (iii) Book Running The MTNs can also be placed out on a book running basis by the Lead Manager on a best effort basis. Such book running shall be subject 7

9 to terms and conditions to be agreed between the Issuer and the Lead Manager. Each issuance of the MTNs under the Islamic MTN Programme shall be in accordance with the FAST Rules, subject to such exemptions (if any) granted from time to time. The MTNs may be issued in multiples of RM1,000,000, but subject to the FAST Rules and other standard conditions including, without limitation, the following: (i) a minimum issue size of RM10,000,000 for each issue; (ii) the issue notice shall be given to the Facility Agent at least eight (8) business days (for the first issue) or six (6) business days (for subsequent issues) prior to and excluding the date of proposed issue; (iii) the rating for the MTNs is at least A- ID (or its equivalent) on each issue date of the MTNs; and (iv) any amount redeemed may be re-issued. 17 Selling Restrictions : Selling Restrictions at Issuance The MTNs may only be offered, sold, transferred or otherwise disposed directly or indirectly to a person to whom an offer or invitation to subscribe the MTNs may be made and to whom the MTNs are issued would fall within Schedule 6 or Section 229(1)(b) of the Capital Market and Services Act 2007 ( CMSA ) (previously Schedule 2 or Section 38(1)(b)) and Schedule 7 or Section 230(1)(b) of the CMSA (previously Schedule 3 or Section 39(1)(b) of the Securities Commission Act 1993 ( SCA )) and would fall within Schedule 9 or Section 257(3) of the CMSA (previously Schedule 5 or Section 66(3)of the SCA). Selling Restrictions Thereafter The MTNs may only be offered, sold, transferred or otherwise disposed directly or indirectly to a person to whom an offer or invitation to purchase the MTNs would fall within Schedule 6 or Section 229(1)(b) of the CMSA (previously Schedule 2 or Section 38(1)(b) of the SCA) and would fall within Schedule 9 or Section 257(3) of the CMSA (previously Schedule 5 or Section 66(3)of the SCA). 8

10 18 Listing Status : The MTNs will not be listed on Bursa Malaysia Securities Berhad or any other stock exchange. 19 Minimum Level of Subscription (RM or %) 20 Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) : The minimum level of subscription for each issue that is not issued on a bought deal basis (which shall be fully subscribed) under the Islamic MTN Programme shall be 5% of the size of a particular issue. : None 21 Identified Assets : The Identified Assets can be in the form of:- (i) (ii) (iii) unencumbered land belonging to the whollyowned subsidiaries of the Issuer; or the Issuer s shares in its subsidiaries; or other assets to be determined prior to each issuance in respect of the the Islamic MTN Programme subject always that such assets in (i), (ii) and (iii) above are Syariah-compliant assets and the Purchase Price for each and every issuance will comply with the SC Syariah Advisory Council s Pricing Guidelines issued on the 30 April Purchase and selling price/rental (where applicable) : The Purchase Price shall at all times be in compliance with the Syariah Advisory Council Pricing Guidelines issued on 30 April 2004 (as may be amended, supplemented or replaced from time to time). The Sale Price can only be calculated once the profit rate, yield to maturity and tenor of the MTNs to be issued are determined prior to each issuance of the MTNs. 23 Conditions Precedent : To include but not limited to the following (all have to be in form and substance mutually acceptable to the Lead Manager and the Issuer) A. Main Documentation (i) The supplemental transaction documents have been executed and, where applicable, stamped and presented for registration. 9

11 B. Issuer (i) Certified true copies of the Certificate of Incorporation, and the Memorandum and Articles of Association of the Issuer. (ii) Certified true copies of the latest Forms 24 and 49 of the Issuer. (iii) A certified true copy of board resolutions of the Issuer authorising, among others, the execution of the supplemental transaction documents. (iv) A list of the Issuer s authorised signatories and their respective specimen signatures. (v) A report of the relevant company search of the Issuer. (vi) A report of the relevant winding up search or the relevant statutory declaration of the Issuer. C. General (i) The approval from the SC and, where applicable, all other regulatory authorities. (ii) The MTNs have received their requisite rating as stated in this Principal Terms and Conditions. (iii) Evidence that all transaction fees, costs and expenses have been paid in full. (iv) The Lead Manager has received from its legal counsel a favourable legal opinion addressed to it and the Trustee advising with respect to, among others, the legality, validity and enforceability of the supplemental transaction documents and a confirmation addressed to the Lead Manager that all the conditions precedent have been fulfilled. (v) The Islamic MTN Programme has received the approval of the Syariah Adviser. 24 Representations and Warranties : To include but not limited to the following: (i) the Issuer is a company with limited liability duly incorporated and validly existing under the laws of Malaysia, has full power to carry on its business and to own its property and 10

12 assets, and has full beneficial ownership of all its assets; (ii) (iii) (iv) the memorandum and articles of association of the Issuer incorporate provisions which authorise, and all necessary corporate and other relevant actions have been taken to authorise, and all relevant consents and approvals of any administrative, governmental or other authority or body in Malaysia have been duly obtained and are in full force and effect which are required to authorise, the Issuer to execute and deliver and perform the transactions contemplated in the transaction documents in accordance with their terms; neither the execution and delivery of any of the transaction documents nor the performance of any of the transactions contemplated by the transaction documents did or does as at the date this representation and warranty is made or repeated (a) contravene or constitute a default under any provision contained in any agreement, instrument, law, ordinance, decree, judgment, order, rule, regulation, licence, permit or consent by which the Issuer or any of its assets is bound or which is applicable to the Issuer or any of its assets, (b) cause any limitation on the Issuer or the powers of its directors, whether imposed by or contained in its memorandum and articles of association or in any agreement, instrument, law, ordinance, decree, order, rule, regulation, judgment or otherwise, to be exceeded, or (c) cause the creation or imposition of any security interest or restriction of any nature on any of the Issuer s assets; and each of the transaction documents is or will when executed and/or issued, as the case may be, be in full force and effect and constitutes, or will when executed or issued, as the case may be, constitute, valid and legally binding obligations of the Issuer enforceable in accordance with its terms. 25 Events of Default : To include but not limited to the following: i. the Issuer fails to pay any amount due from it under any of the transaction documents on the due date or, if so payable, on demand; 11

13 ii. iii. iv. any representation or warranty made or given by the Issuer under the transaction documents or which is contained in any certificate, document or statement furnished at any time pursuant to the terms of the MTNs and/or any of the transaction documents proves to have been incorrect or misleading in any material respect on or as of the date made or given or deemed made or given, and in the case of a failure which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the failure within a period of seven (7) days after the Issuer became aware or having been notified by the Trustee of the failure; the Issuer fails to observe or perform its obligations under any of the transaction documents or the MTNs or under any undertaking or arrangement entered into in connection therewith other than an obligation of the type referred to in paragraph (i) above, and in the case of a failure which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the failure within a period of thirty (30) days after the Issuer became aware or having been notified by the Trustee of the failure; there has been a breach by the Issuer of any obligation under any of the Issuer s existing contractual obligations which may materially and adversely affect the Issuer s ability to perform its obligations under the transaction documents and, if in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy the breach within a period of seven (7) days after the Issuer became aware or having been notified by the Trustee of the breach; v. any indebtedness for borrowed moneys of the Issuer becomes due or payable or capable of being declared due or payable prior to its stated maturity or any guarantee or similar obligations of the Issuer is not discharged at maturity or when called and such declaration of indebtedness being due or payable or such call on the guarantee or similar obligations is not discharged or disputed in good faith by the Issuer in a court of competent jurisdiction within thirty (30) days from the date of such 12

14 declaration or call, or the Issuer goes into default under, or commits a breach of, any agreement or instrument relating to any such indebtedness, guarantee or other obligations, or any security created to secure such indebtedness becomes enforceable; vi. an encumbrancer takes possession of, or a trustee, receiver, receiver and manager or similar officer is appointed in respect of the whole or substantial part of the business or assets of the Issuer, or distress, legal process, sequestration or any form of execution is levied or enforced or sued out against the Issuer and is not discharged within seven (7) days after being levied, enforced or sued out, or any security interest which may for the time being affect any of its assets becomes enforceable; For the purpose of this paragraph (vi), references to substantial shall mean such value equivalent to or more than 5% of the Issuer s aggregate consolidated net tangible assets as reflected in its latest quarterly unaudited financial statements which shall be duly certified by the Issuer's external auditors. vii. viii. ix. the Issuer fails to satisfy any judgement passed against it by any court of competent jurisdiction and no appeal against such judgement or an application for a stay of execution has been made to any appropriate appellate court within the time prescribed by law or such appeal or application for a stay of execution has been dismissed; any step is taken for the winding up, dissolution or liquidation of the Issuer or a resolution is passed for the winding up of the Issuer or a petition for winding up is presented against the Issuer and the Issuer has not taken any action in good faith to set aside such petition within thirty (30) days from the date of service of such winding up petition or a winding up order has been made against the Issuer; the Issuer convenes a meeting of its creditors or proposes or makes any arrangement including any scheme of arrangement or composition or begins negotiations with its creditors, or takes any proceedings or other 13

15 steps, with a view to a rescheduling or deferral of all or any part of its indebtedness or a moratorium is agreed or declared by a court of competent jurisdiction in respect of or affecting all or any part of its indebtedness or any assignment for the benefit of its creditors (other than for the purposes of and followed by a reconstruction previously approved in writing by the Trustee, unless during or following such reconstruction the Issuer becomes or is declared to be insolvent) or where a scheme of arrangement under section 176 of the Companies Act 1965 has been instituted against the Issuer; x. where there is a revocation, withholding or modification of any license, authorisation, approval or consent which in the opinion of the Trustee may materially and adversely impair or prejudice the ability of the Issuer to comply with the terms and conditions of the MTNs or the transaction documents; xi. xii. xiii. xiv. xv. the Issuer is deemed unable to pay any of its debts or becomes unable to pay any of its debts as they fall due or suspend or threaten to suspend making payments with respect to all or any class of its debts; any creditor of the Issuer exercises a contractual right to take over the financial management of the Issuer and such event in the opinion of the Trustee may have a Material Adverse Effect on the Issuer; the Issuer changes or threatens to change the nature or scope of a substantial part of its business, or suspends or threatens to suspend or cease or threatens to cease the operation of a substantial part of its business which it now conducts directly or indirectly and such change or suspension or cessation in the opinion of the Trustee may have a Material Adverse Effect on the Issuer, at any time any of the provisions of the transaction documents is or becomes illegal, void, voidable or unenforceable; the Issuer repudiates any of the transaction documents or the Issuer does or causes to be done any act or thing evidencing an intention 14

16 to repudiate any of the transaction documents; xvi. xvii. any of the assets, undertakings, rights or revenue of the Issuer are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any governmental body which in the opinion of the Trustee may have a Material Adverse Effect on the Issuer; any event or events has or have occurred or a situation exists which in the opinion of the Trustee may have a Material Adverse Effect on the Issuer, and in the case of the occurrence of such event or situation which in the opinion of the Trustee is capable of being remedied, the Issuer does not remedy it within a period of seven (7) days after the Issuer became aware or having been notified by the Trustee of the event or situation. Material Adverse Effect means: 1. any material adverse effect on the business or condition (financial or otherwise) or results of the operations of the Issuer; or 2. any material adverse effect on the ability of the Issuer to perform any of its obligations under any of the transaction documents. Upon the occurrence of an Event of Default, the Trustee may at its discretion or upon the MTNholders instructions declare that an Event of Default has occurred and that payments under the MTNs are due and payable. 26 Principal terms and conditions for warrants (where applicable) : Not applicable 27 Other principal terms and conditions for the issue 27.1 Financial Covenants : Debt to Equity Ratio ("D:E Ratio") The Issuer shall maintain an annual D:E Ratio not exceeding 1.0 time throughout the tenure of the Islamic MTN Programme. The D:E Ratio is the ratio of indebtedness of the Group represented by: 15

17 (i) (ii) all amounts outstanding under the MTNs; all other indebtedness for borrowed monies (be it actual or contingent), hire purchase obligations, finance lease obligations, irredeemable convertible unsecured loan stocks (if any), net exposure determined on a marked to market basis under any derivative instrument and obligations/ contingent liabilities under guarantees/call or put options of the Group but excluding any inter company loans which are subordinated to the MTNs, to its consolidated shareholders funds of the Issuer including, if any, preference equity, subordinated shareholders advances/loans, and retained earnings/losses less intangibles (if any). For avoidance of doubt, contingent liabilities shall not include any contingent liabilities due to legal suits undertaken by external parties against the Group. The D:E Ratio calculations shall be duly confirmed by the Issuer s external auditors and based on the latest audited consolidated financial statements of the Issuer. The Issuer shall arrange for the external auditor s confirmation to be forwarded to the Facility Agent for its distribution to the Trustee and the Rating Agency. For the avoidance of doubt, any double counting shall be disregarded Information Covenants : To include but not limited to the following: i. the Issuer shall provide to the Trustee at least on an annual basis, a certificate confirming that it has complied with all its obligations under the transaction documents and the terms and conditions of the MTNs and that there does not exist or had not existed, from the date the MTNs were issued, any Event of Default, and if such is not the case, to specify the same; ii. the Issuer shall deliver to the Trustee the following: (a) as soon as they become available (and in any event within one hundred and eighty (180) days after the end of each of its financial years) copies of its audited annual report for that year which shall contain the income statements and 16

18 balance sheets of the Issuer and which are audited by a firm of independent certified public accountants acceptable to the Trustee; (b) as soon as they become available (and in any event within ninety (90) days after the end of the first half of its financial year) copies of its unaudited half yearly consolidated financial statements for that period (as announced quarterly to Bursa Malaysia Securities Berhad) which shall contain the income statements and balance sheets of the Issuer which are duly certified by any one of its directors; (c) promptly, such additional financial or other information relating to the Issuer s business and its operations as the Trustee may from time to time reasonably request; and (d) promptly, all notices or other documents received by the Issuer from any of its shareholders or its creditors which contents may materially and adversely affect the interests of the MTNholders, and a copy of all documents dispatched by the Issuer to its shareholders (or any class of them) in their capacity as shareholders or its creditors generally at the same time as these documents are dispatched to these shareholders or creditors, iii. iv. the Issuer shall promptly notify the Trustee of any change in its board of directors and/or substantial shareholders; the Issuer shall promptly notify the Trustee of any change in its condition (financial or otherwise) and of any litigation or other proceedings of any nature whatsoever being threatened or initiated against the Issuer before any court or tribunal or administrative agency which may materially and adversely affect the ability of the Issuer to perform any of its obligations under any of the transaction documents; and v. the Issuer shall promptly give notice to the Trustee of the occurrence of any Event of Default or any event which, upon the giving of 17

19 . notice and/or lapse of time and/or the issue of a certificate and/or the fulfilment of the relevant requirement as contemplated under the relevant transaction document would constitute an Event of Default ( Potential Event of Default ) forthwith upon becoming aware thereof, and it shall take all reasonable steps and/or such other steps as may reasonably be requested by the Trustee to remedy and/or mitigate the effect of the Event of Default or the Potential Event of Default Positive Covenants : To include but not limited to the following: (a) (b) (c) the Issuer shall maintain in full force and effect all relevant authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) and will promptly obtain any further authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) which is or may become necessary to enable it to own its assets, to carry on its business or for the Issuer to enter into or perform its obligations under the transaction documents or to ensure the validity, enforceability, admissibility in evidence of the obligations of the Issuer or the priority or rights of the financiers under the transaction documents and the Issuer shall comply with the same; the Issuer shall at all times on demand execute all such further documents and do all such further acts reasonably necessary at any time or times to give further effect to the terms and conditions of the transaction documents; the Issuer shall exercise reasonable diligence in carrying out its business and affairs in a proper and efficient manner and in accordance with sound financial and commercial standards and practices; (d) the Issuer shall promptly perform and carry out all its obligations under all the transaction documents (including but not limited to redeeming the MTNs on the relevant maturity date(s) or any other date on which the MTNs are due and payable) and ensure that it shall 18

20 immediately notify the Trustee in the event that the Issuer is unable to fulfil or comply with any of the provisions of the transaction documents; (e) the Issuer shall prepare its financial statements on a basis consistently applied in accordance with approved accounting standards in Malaysia and those financial statements shall give a true and fair view of the results of the operations of the Issuer for the period to which the financial statements are made up and shall disclose or provide against all liabilities (actual or contingent) of the Issuer; (f) the Issuer shall promptly comply with all applicable laws including the provisions of the CMSA and/or the MTNs, circulars, conditions or guidelines issued by SC from time to time Negative Covenants : To include but not limited to the following: i. the Issuer shall not (without the prior written consent of the MTNholders and subject always to the provisions of the transaction documents) create or permit to exist any encumbrance, mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment by way of security, trust arrangement for the purpose of providing security or other security interest of any kind including, without limitation, title transfer and/or retention arrangements having a similar effect or any agreement to create any of the foregoing, but excluding liens arising in the ordinary course of business by operation of law and not by way of contract and those security already granted by the Issuer at the date of this Application in relation to the Existing Facilities (as defined below). For avoidance of doubt, should any of the security for the Existing Facilities be released or if any of the Existing Facilities matures or is terminated, all security granted by the Issuer thereto shall be subject to the negative pledge above. Existing Facilities means: 1. the RM100,000,000 Bai Bithaman Ajil Notes Issuance Facility granted to the 19

21 Issuer; and 2. the RM70,000,000 Murabahah Notes Issuance Facility/Islamic Medium Term Notes Facility granted to the Issuer; ii. the Issuer shall not (without the prior written consent of the MTNholders and subject always to the provisions of the transaction documents) dispose any assets in excess of 5% of the aggregate consolidated net tangible assets ("NTA") in any financial year save and except for those arising out of the ordinary course of business; iii. the Issuer shall not add, delete, amend or substitute its Memorandum or Articles of Association in a manner inconsistent with the provisions of the transaction documents; iv. the Issuer shall not declare or pay any dividends (save for such minimum dividends as may be required to maintain the trustee status of the Issuer) if : (a) (b) an Event of Default has occurred, is continuing and has not been waived, or if following such payment or distribution an Event of Default would occur; or the Financial Covenant is breached or will be breached if calculated immediately following such payment or distribution; v. the Issuer shall not obtain or permit to exist any loans or advances from its shareholders or directors unless these loans and advances are subordinated to the MTNs; For avoidance of doubt, the Issuer shall be permitted to obtain loans or advances from its subsidiaries or its associated companies. The repayment of such loans and advances need not be subordinated to the MTNs PROVIDED THAT (I) the aggregate value of such loans and advances is not more than five per cent (5%) of the NTA of the Issuer; and (II) the repayment of such loans or advances will not result in a Material Adverse Effect on the Issuer. vi. subject to paragraph (v) above, the Issuer shall not enter into any agreement with its shareholders, subsidiaries or associated 20

22 companies unless such agreement is entered into: (a) in the ordinary course of its business; (b) on an arms-length basis; and (c) will not have a Material Adverse Effect on the Issuer, save and except agreements between the Issuer and its shareholders, subsidiaries or associated companies for tax optimalisation purposes PROVIDED THAT such agreements shall not have a Material Adverse Effect on the Issuer; vii the Issuer shall not use the proceeds of the MTNs except for the purposes set out in this Application; viii ix the Issuer shall not change the nature of its present business; and the Issuer shall not lend any money to any party other than to (a) the Issuer's directors, officers or employees as part of their terms of employment; and (b) the Issuer s subsidiaries and/or associated companies PROVIDED THAT such lending specified in (a) and (b) above will not result in a Material Adverse Effect on the Issuer Status : The MTNs shall constitute direct, unconditional and unsecured obligations of the Issuer and shall at all times rank pari passu, without discrimination, preference or priority amongst themselves and at least pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer, subject to those preferred by law and the transaction documents 27.6 Redemption : Unless previously redeemed or purchased and cancelled, the MTNs will be redeemed by the Issuer at 100% of their nominal value on their respective maturity dates Repurchase and Cancellation : The Issuer or any of its related corporations may at any time purchase the MTNs at any price in the open market or by private treaty, but these repurchased MTNs shall be cancelled and cannot be reissued Availability : Upon completion of documentation and, unless waived by the Lead Manager, compliance of all 21

23 conditions precedent and other applicable conditions to the satisfaction of the Lead Manager Compensation ( Ta widh ) : In the event of any overdue payments of any amounts due under the Islamic MTN Programme, the Issuer shall pay to the MTNholders compensation on such overdue amounts at an amount and manner prescribed by the SC s Syariah Advisory Council or such other relevant regulatory authority from time to time in accordance with Shariah principles Taxation : All payments by the Issuer shall be made without withholding or deductions for or on account of any present or future tax, duty or charge of whatsoever nature imposed or levied by or on behalf of Malaysia or any other applicable jurisdictions, or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law, in which event the payer shall not be required to gross up for any such deductions or withholdings Other Expenses : All costs, charges and expenses including trustee fee, legal and other professional fees, rating fees, stamp duties (if any), penalties, SC and BNM fees, and other incidental costs, charges and expenses shall be borne by the Issuer Governing Laws : Laws of Malaysia Jurisdiction : The Issuer shall unconditionally and irrevocably submit to the non-exclusive jurisdiction of the courts of Malaysia Other Conditions : The MTNs shall at all times be governed by the guidelines issued and to be issued from time to time by the SC, BNM and/or any other authority in Malaysia having jurisdiction over matters pertaining to the MTNs, and the FAST Rules. 22