Unrated fixed rate serial bonds of up to RM80.0 million in aggregate nominal value (Bonds)

Transcription

1 (A) CORPORATE INFORMATION OF ISSUER (1) Name : Jaya Persada Sdn Bhd ( JPSB or the Issuer ) (2) Address : Registered Office: Level 2, Tower 1, Avenue 5, Bangsar South City, Kuala Lumpur Business Office: B5/5/5, One Ampang Business Avenue, Jalan Ampang Utama 1/2, One Ampang Avenue, Ampang, Selangor (3) Date of incorporation: 20 November 2017 (4) Place of incorporation : Malaysia (5) Business registration: U number (6) Residence status : Resident Controlled Company (7) Place of listing : Not Listed (8) Date of listing : Not Listed (9) Principal activities : (a) To issue the Bonds (as defined herein) and/or obtain such financing as may be required by the Issuer and the Issuer s shareholders and related company for the business and operations of the Issuer and the Digistar Group (as defined herein) and (b) to undertake such matters as may be required relating to and ancillary to the issuance of the Bonds and such other financing mentioned in (a). (10) Issued and paid-up share capital : Issued and paid-up share capital as at 19 March 2018: RM2.00 comprising 2 ordinary shares. (11) Structure of shareholdings and names of shareholders or, in the case of a public company, names of : The shareholder and structure of shareholding of the Issuer as at 19 March 2018 are as follows: Shareholder No. of ordinary shares Shareholding (%) Digistar Corporation Berhad Total Page 1 of 26

2 all substantial shareholders (12) Board of directors : No. Name 1 Mejar (K) Datuk Wira Lee Wah Chong 2 Koh Yong Kun 3 Lee Jin Jean (13) Disclosure of the following : (i) (ii) If the issuer or : its board members have been convicted or charged with any offence under any securities laws, corporation laws or other laws involving fraud or dishonesty in a court of law, or if any action has been initiated against the issuer or its board members for breaches of the same, for the past ten years prior to the lodgement/ since incorporation (for issuer incorporated less than ten years) If the issuer has: been subjected Page 2 of 26

3 to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the lodgement (B) PARTIES TO THE TRANSACTION (a) Origination No. Roles Name of parties 1 Issuer Jaya Persada Sdn Bhd 2 Principal Adviser MIDF Amanah Investment Bank Berhad 3 Lead Arranger MIDF Amanah Investment Bank Berhad ( LA ) 4 Solicitors Messrs Adnan Sundra & Low 5 Trustee-Security Trustee Pacific Trustees Berhad ( PTB ) 6 Other-Security Trustee PTB (b) At the point of distribution No. Roles Name of parties 1 Issuer Jaya Persada Sdn Bhd 2 Lead Manager MIDF Amanah Investment Bank Berhad 3 Facility Agent MIDF Amanah Investment Bank Berhad 4 Central Depository Bank Negara Malaysia ( BNM ) Page 3 of 26

4 5 Paying Agent BNM (c) After distribution No. Roles Name of parties 1 Issuer Jaya Persada Sdn Bhd 2 Principal Adviser MIDF Amanah Investment Bank Berhad 3 Facility Agent MIDF Amanah Investment Bank Berhad 4 Trustee PTB 5 Other-Security Trustee PTB 6 Central Depository BNM 7 Paying Agent BNM (C) DETAILS OF FACILITY/PROGRAMME (1) Name of facility : Unrated fixed rate serial bonds of up to RM80.0 million in aggregate nominal value ( Bonds ) (2) One-time issue or programme : One-time issue (3) Shariah principles (for sukuk) : Not applicable (4) Facility description (for ringgitdenominated sukuk, to provide description as cleared by the SC) : Issuance of unrated fixed rate serial bonds Page 4 of 26

5 (5) Currency : Ringgit (6) Expected facility/ programme size : Up to MYR 80,000, (7) Option to upsize (for programme) : No (8) Tenure of facility/ programme : 14 year(s) (9) Availability period for: Not applicable debt/ sukuk programme (10) Clearing and settlement platform : PayNet (11) Mode of issue : Private/direct placement (12) Selling restrictions : (i) At issuance: Part 1 of Schedule 6 of the Capital Markets & Services Act, 2007 (CMSA) Part 1 of Schedule 7 of the CMSA Read together with Schedule 9 of CMSA Section 2(6) of the Companies Act 2016 Other-(i) Selling Restrictions at Issuance The Bonds may only be offered, sold, transf disposed directly or indirectly to persons to whom an offer or invitation to subscribe the B to whom the Bonds are issued would fall within: (i) Section 2(6) of the Companies Act, 2 time to time ( Companies Act ); and (ii) Part I of Schedule 6 (or Section 229(1)(b)) of the Schedule 7 (or Section 230(1)(b)) of the CMSA, read together with Schedule 9 (or Sectio as amended from time to time. (ii) Selling Restrictions Thereafter The Bonds may only b transferred or otherwise disposed directly or indirectly to persons to whom an offer or inv Bonds may be made and to whom the MTNs are issued would fall within: (i) Section 2(6) and (ii) Part I of Schedule 6 (or Section 229(1)(b)), read together with Schedule 9 (or Se CMSA, as amended from time to time. (ii) After issuance: (13) Tradability and transferability : Size in Ringgit which are tradable and transferable: Not applicable Size in Ringgit which are non-tradable and non-transferable: Not applicable Page 5 of 26

6 (14) Secured/combinatio n of unsecured and secured, if applicable : The Bonds shall be secured, inter-alia, by the following security ( Security ), in favour of the Security Trustee: 1. First party assignment and charge by the Issuer over the BPA (as defined in Details of designated accounts(s) ) and the DSRA (as defined in Details of designated accounts(s) ); 2. First priority assignment and charge by the Issuer of all its rights, benefits and interests in relation to the intercompany loan granted by the Issuer to Seni Pujaan Sdn Bhd (Company No U) ( SPSB ) and Digistar Corporation Berhad (Company No K) ( Digistar Corporation ) for the on-lending of the proceeds of the Bonds (as set out in Other terms and conditions (i) Details on utilisation of proceeds by Issuer ); 3. Third party assignment and charge by SPSB over the HPA (as defined in Details of designated accounts(s) ) and HOA (as defined in Details of designated accounts(s) ) which will include an undertaking from SPSB not to open or maintain any other bank accounts other than the relevant Designated Accounts and the JKR Hostel Maintenance Account (as defined in Other terms and conditions (xli) JKR Hostel Maintenance Account ); 4. A specific debenture by SPSB over all of its rights, interest, title and benefits under the Property (as defined in Other terms and conditions (xlviii) Property ); 5. A third party fixed legal charge ( Charge ) by SPSB (via a power attorney granted by Yayasan DMDI (Company No M) ( Yayasan DMDI ) to it) over the master title held under Lot No , Title No. PN (formerly PT Nos 15 & PT 20, HS(D) & HS(D) 69473), Town Area XXVII (27), District of Melaka Tengah, State of Melaka, with a leasehold interest for a term of 99 years and expiring 29 June 2107, which includes its rights, title and interests in and to the Property; 6. A third party fixed legal charge by SPSB over strata titles of the Property upon the issuance of the same; 7. A third party assignment and charge by SPSB over all relevant insurance policies and proceeds (where applicable) in respect of the Hotel in favour of the Security Trustee and the Security Trustee shall be named as the loss payee, mortgagee and co-insured for the Property; 8. A third party assignment and charge by Matang Makmur Holdings Sdn Bhd (Company No P) ( MMHSB ) over the contractual rights, interest, title and benefits under (a) the IPSB Subordinated Bonds (as defined in Other terms and conditions (xxxix) IPSB Subordinated Bonds ) held by it, including, but not limited to, the assignment of rights, title and cashflows under the CA (as defined in Other terms and conditions (xxxii) Designated accounts under the IPSB Bonds and IPSB Subordinated Bonds ) pertaining to the JKR Project (as defined in Other terms and conditions (xlii) JKR Project ), to the extent of the value of the IPSB Subordinated Bonds held by it; and (b) the extension agreement entered or to be entered into between Indera Persada Sdn Bhd (Company No T) ( IPSB ), MMHSB and LWC Capital Sdn Bhd (Company No X) ( LWCSB ) wherein the parties agree to extend the repayment date of the IPSB Subordinated Bonds issued by IPSB and held by MMHSB and LWCSB upon the terms and subject to the conditions appearing therein; 9. A third party fixed deposit pledge of RM4.0 million (which shall not include Page 6 of 26

7 interest accrued thereon) by Digistar Corporation in favour of the Security Trustee and the fixed deposit account shall at all times be operated solely by the Security Trustee; 10. A letter of undertaking by LWCSB whereby LWCSB irrevocably and unconditionally undertakes to waive its rights to the negative pledge under the IPSB Subordinated Bonds upon the redemption of the IPSB Bonds (as defined in Other terms and conditions (xxxviii) IPSB Bonds); 11. A third party first legal charge by Digistar Corporation over all of its shares in Issuer; 12. A third party first legal charge by Digistar Corporation over all of its shares in SPSB; 13. A third party first legal charge by Digistar Corporation over all of its shares in MMHSB; 14. A letter of undertaking by Digistar Corporation whereby Digistar Corporation irrevocably and unconditionally undertakes to: (a) authorise the trustee for the IPSB Bonds ( Trustee (IPSB Bonds) ) to pay the sum of RM16.71 million due to Digistar Corporation under the DB Agreement (as defined in Other terms and conditions (xxxi) DB Agreement ) ( Contract Sum ) from IPSB into the DSRA; (b) upon the transfer by Kumpulan Melaka Berhad s (Company No H) ( KMB ) and/or Pembinaan Sujaman Sdn Bhd s (Company No A) ( PSSB ) of their respective shares in IPSB to MMHSB ( Share Transfer ) and within 30 days from the completion of such Share Transfer, procure the deposit of MMHSB s shares of up to 60% in IPSB with the Security Trustee; (c) not to change the beneficial ownership of its shares in the Issuer and SPSB during the tenure of the Bonds; (d) not to change or permit any changes in its beneficial ownership (directly or indirectly) of its shares in IPSB during the tenure of the Bonds except for the Share Transfer; (e) in the event of any shortfall, within 3 days upon the receipt of the top up notice from the Security Trustee, to top up the Minimum Balance (as defined in Details of designated account(s), if applicable) for payment of coupons and principal of the Bonds; (f) ensure that all payment of the Contract Sum from IPSB to be directly deposited into the DSRA; (g) ensure that all dividends declared by IPSB to MMHSB to be directly deposited into the DSRA; and (h) ensure that all payments in respect of the KMB s Entitlement to KMB (which shall include MMHSB s and PSSB s obligations under the KMB Entitlement) shall be paid promptly from the bank accounts maintained by the Digistar Corporation and/or the Digistar Group, as the case may be; 15. A letter of undertaking by MMHSB whereby MMHSB irrevocably and unconditionally undertakes to: Page 7 of 26

8 (a) authorise the Trustee (IPSB Bonds) to pay dividends due to MMHSB from IPSB into the DSRA; (b) upon the maturity of the IPSB Bonds, deposit its shares in IPSB in favour the Security Trustee as security for the Bonds; (c) waive its rights to the negative pledge under the IPSB Subordinated Bonds upon the redemption of the IPSB Bonds; (d) not to change or permit any changes in its beneficial ownership (directly or indirectly) of its shares in IPSB during the tenure of the Bonds, save for the Share Transfer; (e) upon the occurrence of the Share Transfer and within 30 days from the completion of such Share Transfer, deposit such shares (being shares of up to 60% in IPSB) with the Security Trustee; (f) maximise the dividends to be declared and paid by IPSB into the DSRA, subject to the covenants under the IPSB Bonds and all applicable laws; (g) ensure that IPSB declares and pays dividends to the fullest extent possible, subject to the relevant covenants of the IPSB Bonds, such that the debt service coverage ratio of the IPSB Bonds ( DSCR (IPSB Bonds) ) is minimized or to a DSCR (as defined in the financial covenants of the IPSB Bonds) level of at most 1.50 times (on a forward-looking basis); (h) ensure that IPSB shall operate its business in accordance with good industry practice in order to maximise dividends to be transferred to the DSRA; (i) not to suspend, amend, modify, vary or agree to any suspension of, or any amendment, modification or variation to, any provision of the Shareholders Agreement (as defined in Other terms and conditions (l) Shareholders Agreement ), and to not enter into any supplemental or variation document in respect of the Shareholders Agreement without the prior written consent of the Trustee; (j) confirm that it does not and will not have any liabilities or creditor nor will it undertake any business other than investment holding in IPSB, and as a lessee of the car park pursuant to the MBMB Lease (as defined in Other terms and conditions (xvi) Conditions subsequent ) and ancillary matters in relation thereto; and (k) agree to authorise the Trustee (IPSB Bonds) to deposit the coupon and principal payment in respect of the IPSB Subordinated Bonds held by it into the DSRA in the event that the dividends to be paid by IPSB to it is insufficient to meet the Minimum Balance (as defined in Details of designated account(s), if applicable) and such dividends will not be paid into any other account without the consent of the Security Trustee; 16. A letter of undertaking by SPSB whereby SPSB irrevocably and unconditionally undertakes: (a) in relation to the HPA and HOA, to not declare or pay any dividends or make any distribution whether income or capital in nature to its shareholders, or make any payments (whether in relation to nominal value, interest or otherwise) to its shareholders, subsidiaries or associated companies in connection with any financing/loans as advances in whatever form from its shareholders where the Page 8 of 26

9 same is derived from the cashflows of the Hotel provided that SPSB is not restricted from paying dividends from earnings/cashflows derived from the JKR hostel and other businesses of SPSB which are not related to the Hotel; (b) to deposit into the HPA, all proceeds from the Hotel including any other payments, revenues, deposits, fees, charges, car park collections, restaurants earnings, proposed banquet hall profits and insurance claims received (other than insurance proceeds arising from a total loss event); (c) to deposit into the DSRA, any proceeds arising from the sale of the Property, and any insurance claims received arising from a total loss event; (d) to authorise the Security Trustee to deposit RM200, monthly into the DSRA from the HPA during the tenure of the Bonds; (e) to top up such other amounts as may be necessary to ensure that the DSRA is funded with the amount equivalent to meet the Minimum Balance (as defined under Details of designated account(s), if applicable); 17. A third party first legal assignment and charge by MMHSB in favour of the Security Trustee of its rights, interest, titles and benefits under the MBMB Lease; 18. A debenture by MMHSB comprising fixed and floating charges over all its present and future assets; 19. An irrevocable power of attorney granted by SPSB in favour of the Security Trustee in respect of the Property; 20. An irrevocable power of attorney granted by MMHSB in favour of the Security Trustee to enable the Security Trustee at any time during the tenure of the Bonds to exercise all the powers of MMHSB including control of the shares of IPSB, thus enabling the Security Trustee to exercise the power of MMHSB to vote on the board of IPSB to declare dividends and to pay the Contract Sum notwithstanding that no event of default has occurred; and 21. Such other security as may be advised by the Solicitors. Existing Security/Collateral for IPSB Bonds and IPSB Subordinated Bonds By virtue of the assignment by MMHSB of the rights, titles, interests and benefits under the IPSB Subordinated Bonds, the Bondholders are entitled to the following security to the extent of the value of the IPSB Subordinated Bonds held by it upon an occurrence of an Event of Default and if an event of default has occurred under the IPSB Subordinated Bonds: (1) First ranking fixed charge over the DSRA (IPSB Bonds), CA and MSCA (all as defined in Other terms and conditions (xxxii) Designated accounts under the IPSB Bonds and IPSB Subordinated Bonds ); (2) First priority assignment of IPSB s contractual rights, interest, titles and benefits under the Concession Agreement (as defined in Other terms and conditions (xxvii) Concession Agreement ) in respect of: (i) the Availability Charges and Maintenance Services Charges; and (ii) the amount payable to IPSB as a result of early termination of the Concession Agreement with notice of assignment to be acknowledged by the Government; (3) First priority assignment of IPSB s contractual rights, interest, title and benefits Page 9 of 26

10 under the Concession Agreement in respect of any reimbursement cost (which shall not exceed 2.5% of the Construction Cost (as defined in Other terms and conditions (xxix) Construction Cost )) incurred in relation to or for the purpose of implementation of the Concession Agreement; (4) Debenture over all of the IPSB s present and future assets, fixed and floating, save for the Asset Management Programme Account (as defined in Other terms and conditions (xix) Asset Management Programme Account ); (5) Negative pledge by PSSB and MMHSB respectively not to pledge their shares held by it to any parties during the tenure of the IPSB Bonds and the deposit of the share certificates evidencing such issued and paid-up share capital of IPSB with the security trustee for the IPSB Bonds ("Security Trustee (IPSB Bonds)"); (6) Negative pledge by KMB not to pledge the issued and paid-up share capital of IPSB held by it to any parties during the tenure of the IPSB Bonds; (7) First priority assignment of insurance policies, if any, required to be undertaken under the JKR Project with the Security Trustee (IPSB Bonds) designated as coinsured, loss payee and mortgagee, to the extent permitted by prevailing laws; and (8) Deed of subordination of shareholder s present and future advances. (15) Details of guarantee, : Not guaranteed if applicable (16) Convertibility of : Non-convertible issuance and details of the convertability (17) Exchangeability of issuance and details of the exchangeability : Non-exchangeable (18) Call option and details, if applicable : No call option (19) Put option and details, if applicable : No put option (20) Details of covenants : Positive Covenants Including but not limited to the following: 1. The Issuer shall cause Digistar Corporation to procure IPSB to carry on and operate its business and affairs with due diligence, in proper and efficient manner which should include, amongst others, that all necessary approvals Page 10 of 26

11 or relevant licences are obtained and/or being obtained; 2. The Issuer shall cause Digistar Corporation to procure IPSB to comply with all provisions of the transaction documents of the IPSB Bonds ( Transaction Documents (IPSB Bonds) ); 3. The Issuer shall cause Digistar Corporation to procure IPSB to perform all its obligations under the Concession Agreement and shall immediately notify the Trustee of any breach or default under the Concession Agreement and ensure that all consents, approvals, licenses and other authorisations required to ensure the validity and enforceability of the Concession Agreement are obtained and kept in full force and effect; 4. The Issuer shall cause Digistar Corporation to ensure that IPSB shall operate its business in accordance with good industry practice in order to maximise revenues to be transferred to MMHSB (in the form of dividends which are to be deposited directly) into the DSRA; 5. The Issuer shall preserve and keep in force and effect all licenses, consents and rights (where applicable) necessary for the conduct of its business; 6. The Issuer shall cause SPSB to maintain all insurances necessary for the Hotel in accordance with common industry practice (as applicable); 7. The Issuer shall procure SPSB to provide to the Trustee updated valuations on the Property, car park and banquet hall at least once every 3 years; 8. The Issuer shall comply with its obligations under the Central Securities Depository and Paying Agency Rules issued by PayNet and, without prejudice to the generality of the foregoing, at all times maintain a Paying Agent with a specified office in Malaysia; 9. The Issuer shall comply with the provisions of the CMSA, the notes, circulars, conditions or guidelines issued or published by the SC and/or other regulatory agencies from time to time and all relevant laws and regulations; 10. The Issuer shall cause Digistar Corporation to procure each of IPSB, SPSB and MMHSB to supply to the Trustee with its audited financial statements within 120 days from the end of the relevant Financial Year and its unaudited semi-annual financial statements within 90 days from the end of the relevant semi-annual period, prepared in accordance with Malaysian generally accepted accounting principles ( GAAP ) and including compliance certificates signed by an authorised signatory evidencing compliance with the covenants imposed herein and details of calculation thereof; 11. The Issuer shall cause Digistar Corporation to procure IPSB to provide to the Trustee monthly report on its Asset Management Services (as defined in Other terms and conditions (xxii) Asset Management Services ) key performance index score pursuant to the Asset Management Service Manual Services (as defined in Other terms and conditions (xx) Asset Page 11 of 26

12 Management Services Manual ) and any deduction made in relation to the JKR Project; 12. The Issuer shall cause Digistar Corporation to procure IPSB to provide to the Trustee the Project Monitoring Committee s minutes of meeting (held to discuss on variation of scope of maintenance services, and remedial services required, if any) in relation to the JKR Project; 13. The Issuer shall cause Digistar Corporation to procure IPSB to provide to the Trustee the annual budget for undertaking Asset Management Programme (as defined in Other terms and conditions (xviii) Asset Management Programme ) in relation to the JKR Project; 14. The Issuer shall cause Digistar Corporation to procure IPSB to provide to the Trustee such information as and when reasonably requested by the Bondholders and/or Trustee; 15. The Issuer shall cause Digistar Corporation to procure IPSB to submit an invoice not later than the tenth (10th) day of every month from the relevant due date to the Government for the payment of the Asset Management Services Charges (as defined in Other terms and conditions (xxiii) Asset Management Services Charges ) in relation to the JKR Project; 16. The Issuer shall procure SPSB to submit to the Trustee the Hotel s annual budget for the forthcoming Financial Year (as defined in Other terms and conditions (xxxv) Financial Year ) 60 days prior to the end of each Financial Year; 17. The Issuer shall procure SPSB to provide to the Trustee updates on the termination, changes and amendments of any of the management agreements entered into between SPSB and the Hotel suite owners ( Management Agreements ) on annual basis (concurrently with the submission of the Hotel s annual budget for approval); 18. The Issuer shall cause SPSB to not open or maintain any accounts other than the Designated Accounts, the JKR Hostel Maintenance Account pertaining to the management of the JKR hostels and such other accounts as may be required by law; 19. The Issuer shall cause SPSB not to declare or pay any dividends or make any distribution whether income or capital in nature to its shareholders, or make any payments (whether in relation to nominal value, interest or otherwise) to its shareholders, subsidiaries or associate companies in connection with any financing or loans as advances (in whatever form) from its shareholders where the same is derived from the cashflow of the Hotel provided that SPSB is not restricted from paying dividends from earnings or cashflow derived from the JKR hostels and other businesses of SPSB which are not related to the Hotel; and 20. Any other positive covenants as may be advised by the Solicitors. Page 12 of 26

13 Negative covenants The Issuer where relevant, shall not, without the prior written consent of the Trustee, do the following, which are including but not limited to: 1. Amend its constitution, save for amendments required by law or regulation or for increase in share capital; 2. Undertake any business other than the business of issuing the Bonds and ancillary matters pertaining thereto; 3. Enter into any amalgamation, consolidation, merger, reconstruction, dissolution or winding up of itself which may materially affect its ability to perform its obligation under the Transaction Documents; 4. Assign its rights or transfer its obligations under the Transaction Documents; 5. Dispose of major assets that contribute substantially to its revenue unless in the ordinary course of business and on an arm s length basis or which are neither obsolete or worn out; 6. Surrender, transfer, assign, relinquish, dispose or create any security interest over any of its rights and interest under the security documents in respect of the Bonds; 7. Do or suffer to be done any act, matter or thing whereby any insurance may be rendered void, voidable or incapable of being effected, maintained or renewed; 8. Reduce its issued paid-up capital; 9. Declare or pay any dividends or make any distribution whether income or capital in nature to its shareholders, or make any payments (whether in relation to nominal value, interest or otherwise) to its shareholders, subsidiaries or associated companies in connection with any financing/loans as advances in whatever form from its shareholders; 10. Save for the amount to be on-lent to SPSB and Digistar Corporation under the Bonds, grant any loans, advances, guarantees, indemnities or similar assurances against financial loss in respect of any indebtedness of any affiliate or third party, other than those given in the ordinary course of business; 11. Incur, assume, guarantee or permit to exist any further financial indebtedness save for those raised for the purposes of refinancing the Bonds; 12. Terminate, suspend, or enter into negotiations to, in any way, alter, amend, change, vary, delete, waive or relinquish any of the terms or conditions of any agreement pertaining to the Transaction Documents or grant any time or indulgence to or release or vary the liability of any person under the Transaction Documents; 13. Create or permit to subsist any security interest over the Property save for Page 13 of 26

14 those security interest created pursuant to any of the Transaction Documents; and 14. Any other negative covenants as may be advised by the Solicitors. Financial Covenants The Issuer shall maintain the debt service coverage ratio ( DSCR ) of at least 1.00 time during the tenure of the Bonds. In the event that the DSCR is not maintained, the Issuer shall rectify it within 60 days from the date of the said occurrence, failing which, it shall constitute an Event of Default. A) Computation of DSCR for coupon payments and principal redemption of Bonds in the next 12 months: DSCR = (Total Opening Cash Balances + Incoming Cash Flow in the next 12 months Operating Expenses in the next 12 months) / (Principal Due + Coupon Payments Due on the Bonds for the next 12 months) where: Total Opening Cash Balances = the total cash balances in the Designated Accounts as at the point of the calculation of the DSCR. Incoming Cash Flow in the next 12 months are the:- 1. Contract Sum to be paid by IPSB to Digistar Corporation which shall be deposited directly into the DSRA; 2. Dividends to be paid by IPSB to MMHSB which shall be deposited directly into the DSRA; 3. Hotel proceeds to be earned or received by SPSB which shall be deposited directly into the HPA; 4. Interest income to be earned from the Permitted Investments; and 5. Any advances or equity injection from shareholders or related companies. For the avoidance of doubt, the total cash balances referred to above shall exclude cash in IPSB s designated accounts in respect of the IPSB Bonds ( Designated Accounts (IPSB Bonds) ). Operating Expenses in the next 12 months are the:- 1. Issuer s running costs (including the Issuer s tax payments, if any); 2. Insurance payment if any; 3. Bonds fees and expenses (excluding principal redemption and coupon payments); and 4. The Hotel s operating expenditure, capital expenditure, profit sharing to hotel suites owners pursuant Management Agreements and tax payment. Principal Due and Coupon Payments Due in the next 12 months are the total repayments (principal and coupon payments) pertaining to the Bonds to be paid by Page 14 of 26

15 the Issuer during the next 12 months. For the avoidance of doubt, the DSCR shall be computed at the beginning of every Financial Year of the Issuer. The computation of the DSCR shall be verified and duly confirmed in writing by the Issuer s external auditors and the Trustee within 90 days from the end of each Financial Year. B) Computation of DSCR for coupon payments and principal redemption of Bonds in the last 12 months: DSCR = (Total Opening Cash Balances + Incoming Cash Flow in the past 12 months Operating Expenses in the past 12 months / (Principal Due + Coupon Payments Due on the Bonds in the past 12 month period) where: Total Opening Cash Balances = the total cash balances in the Designated Accounts 365 days prior to the calculation of the DSCR. Incoming Cash Flow in the past 12 months are the: 1. Contract Sum paid by IPSB to Digistar Corporation which was deposited into the DSRA; 2. Dividends paid by IPSB to MMHSB which was deposited directly into the DSRA; 3. Hotel proceeds earned or received by SPSB which was deposited into the HPA; 4. Interest income earned from the Permitted Investments; and 5. Any advances or equity injection from shareholders or related companies. For the avoidance of doubt, the total cash balances referred to above shall exclude cash in IPSB s Designated Accounts (IPSB Bonds). Operating Expenses in the past 12 months are the: 1. Issuer s running costs (including the Issuer s tax payments, if any); 2. Insurance payment, if any; 3. Bonds fees and expenses (excluding principal redemption and coupon payments); and 4. The Hotel s operating expenditure, capital expenditure, profit sharing to hotel suites owners pursuant to the Management Agreements and tax payment. Principal Due and Coupon Payments Due in the past 12 months are the total repayments (principal and coupon payments) pertaining to the Bonds paid by the Issuer during the Financial Year. For the avoidance of doubt, the DSCR shall be computed at the beginning of every Financial Year of the Issuer. The computation of the DSCR must be verified and duly confirmed in writing by the Issuer s external auditors and the Trustee within 90 days from the end of each Financial Year. Information Covenants The Issuer where relevant, shall provide covenants, including but not limited to the following: Page 15 of 26

16 1. Deliver to the Trustee a copy of (a) the annual audited financial statements of the Issuer within 120 days from the end of the relevant Financial Year and (b) the unaudited semi-annual financial statements of the Issuer within 90 days from the end of the relevant semi-annual period, prepared in accordance with Malaysian GAAP and including compliance certificates signed by an authorised signatory evidencing compliance with the covenants imposed herein and details of calculation thereof; and 2. Deliver to the Trustee a copy of the statement of the Designated Accounts on quarterly basis. (21) Details of : Name of account: designated account, Bonds Proceeds Account ( BPA ) if applicable Parties responsible for opening the account: Issuer Parties responsible for maintaining/operating account: Maintained by: Issuer Operated by: Security Trustee Signatories to account: Security Trustee Sources of funds: (1) Proceeds raised from the issuance of the Bonds; (2) Equity injection and/or shareholder s advances from Digistar Corporation; (3) Proceeds from the repayment of the inter-company loan by SPSB and Digistar Corporation pursuant to the inter-company loan agreement to be entered into between the Issuer, SPSB and Digistar Corporation; and (4) Any proceeds, income and/or interest earned from Permitted Investments arising out of the BPA. Utilisation of funds: The funds in the BPA shall be utilised in the following order of priority: (1) To make payment of taxes of the Issuer (if any); (2) To make payment of fees and expenses relating to the issuance of the Bonds; (3) To pay annual operating costs and expenses of Issuer based on documentary evidences in the form and substance acceptable to the Trustee; (4) To pre-fund the DSRA (as defined below) at the point of Bonds issuance with an amount equivalent to 1 year s coupon payment in respect of the Bonds in the DSRA; (5) To maintain a minimum amount in the DSRA equivalent to the Minimum Balance (as defined in Details of designated account(s), if applicable) during the tenure of the Bonds; (6) To finance the utilisation in accordance with the utilisation schedule based on the amount stated in the issue notice/certificates in form as set out in the relevant Transaction Documents; and (7) Towards Permitted Investments. (22) Details of : Name of account: designated account, Hotel Proceeds Account ( HPA ) if applicable Page 16 of 26

17 Parties responsible for opening the account: SPSB Parties responsible for maintaining/operating account: Maintained by : SPSB Operated by: Security Trustee Signatories to account: Security Trustee Sources of funds: (1) Proceeds from the Hotel including any other payments, revenues, deposits, fees, charges, car park collections, restaurants earnings, proposed banquet hall profits and insurance claims received (other than insurance proceeds arising from a total loss event); and (2) Any proceeds, income and/or interest earned from the Permitted Investments arising out of the HPA. Utilisation of funds: The funds in the HPA shall be utilised in the following order of priority: (1) To transfer to the DSRA an amount of RM200, per month during the tenure of the Bonds; (2) To top up such other amounts necessary to ensure that the DSRA is funded with the amount equivalent to meet the Minimum Balance (as defined below); (3) To transfer the balance to the HOA for tax payments, the operations and capital expenditure of the Hotel based on the Hotel s annual budget to be approved by the Trustee in consultation with the Bondholders and to pay profit to the Hotel suites owners pursuant to the terms of the Management Agreements; (4) To transfer to the DSRA proceeds from any insurance claims received (save for claims arising from a total loss event which shall be directly deposited into the DSRA); and (5) Towards Permitted Investments. For the avoidance of doubt, in the event that the DSRA is not sufficiently funded to meet the Minimum Balance, the Security Trustee shall transfer such amount from the HPA to the DSRA as may be required to comply with the Minimum Balance. (23) Details of : Name of account: designated account, Hotel Operations Account ( HOA ) if applicable Parties responsible for opening the account: SPSB Parties responsible for maintaining/operating account: Maintained by: SPSB Operated by: SPSB save for upon an occurrence of an Event of Default, the HOA shall be operated by the Security Trustee Signatories to account: Prior to occurrence of Event of Default SPSB Upon the occurrence of Event of Default Security Trustee Sources of funds: (1) Proceeds from the HPA for purposes of the operations and capital expenditure of the Hotel based on the Hotel s annual budget to be approved by the Trustee in consultation with the Bondholders; and (2) Any proceeds, income and/or interest earned form the Permitted Investments arising out from the HOA. Utilisation of funds: Page 17 of 26

18 (1) To pay tax payments, the operations and capital expenditure of the Hotel based on the Hotel s annual budget to be approved by the Trustee in consultation with the Bondholders and any profit to the Hotel suites owners pursuant to the terms of the Management Agreements; and (2) Towards Permitted Investments. (24) Details of : Name of account: designated account, Debt Service Reserve Account ( DSRA ) if applicable Parties responsible for opening the account: Issuer Parties responsible for maintaining/operating account: Maintained by: Issuer Operated by: Security Trustee Signatories to account: Security Trustee Sources of funds: (1) The Contract Sum shall be deposited into this DSRA; (2) Any dividends payments to MMHSB from IPSB; (3) a cumulative sum of RM200,000 per month (commencing from the first month upon issuance of the Bonds) shall be deposited into DSRA from the HPA during the tenure of the Bonds; (4) In the event any amount in the DSRA is utilised for the servicing of any coupon payment and principal repayment under the Bonds, the amount in the DSRA shall be replenished up to an amount equivalent to the Minimum Balance within 14 days from the date of the said utilisation, failing which, an Event of Default would have occurred. The funds in the DSRA to meet the Minimum Balance shall be transferred from or deposited by: (a) the BPA; (b) the HPA; (c) Digistar Corporation pursuant to the terms of the letter of undertaking to irrevocably and unconditionally top up any shortfall against the Minimum Balance, as may be required to comply with the Minimum Balance; and/or (d) MMHSB pursuant to the terms of the letter of undertaking to irrevocably and unconditionally agree to authorise the Trustee (IPSB Bonds) to deposit the coupon and principal payment in respect of the IPSB Subordinated Bonds held by it in the event that the dividends to be paid by IPSB to it is insufficient to meet the Minimum Balance; (5) Any proceeds from insurance claims from the security created for the Bonds; (6) Any proceeds, income and/or interest earned from the Permitted Investments arising out of the DSRA (7) Any proceeds received from the enforcement of any of the security for the Bonds including the sales proceeds obtained from the sale of the Property; and (8) Any proceeds from insurance claims received arising from a total loss event of the Property and any other proceeds from the insurance claims transferred from the HPA. For purposes of this lodgement kit, Minimum Balance shall mean the aggregated amount under: (a) In respect of coupon payment, upon issuance of the Bonds, an amount equivalent to one (1) year s coupon for the Bonds to be set aside in the DSRA from the proceeds of the Bonds and thereafter such amounts shall be maintained at all times throughout the tenure of the Bonds subject to paragraph (4) above; and (b) In respect of principal redemption, a minimum amount is maintained in the DSRA, which shall be equivalent to the following, whichever is the highest: (i) an amount equivalent to the next immediate principal repayment no later than six (6) months prior to such principal repayment date; or (ii) an amount equivalent to the final principal repayment under Tranche 3 of the Bonds no later than the expiry date of the Concession Agreement, or (iii) a Page 18 of 26

19 cumulative sum of RM200, per month (starting from the first month upon issuance of the Bonds) and the first principal repayment under the first tranche of the Bonds ( Tranche 1 ) shall be repaid from the sum accumulated as referred to herein Utilisation of funds: The funds in the DSRA shall be utilised according to the waterfall structure as follows:- (1) To pay coupons for the Bonds; (2) To redeem the principal amounts in respect of the Bonds when due and payable; and (3) Towards Permitted Investments (25) Name of credit rating: Not rated agency, credit rating and amount rated, if applicable (26) Conditions precedent : The issuance of the Bonds shall be subject to the following conditions precedent which is including but not limited to: 1. The Issuer and the Security Parties (as defined in Other terms and conditions (xlix) Security Parties ) respectively shall have furnished certified true copies of each of their constitution, certificate of incorporation, the latest Return for Allotment of Shares, Notification of Change in the Registered Address and Notification of Change in the Register of Directors, Managers and Secretaries and a list of authorised signatories and their authorised signatories specimen signatures; 2. Approvals or resolutions from the Issuer s Board of Directors authorising, amongst others, the issuance of the Bonds and the execution of all relevant documents to which it is a party; 3. Approvals or resolutions from the Security Parties board of directors authorising, amongst others, the execution of all relevant documents to which each of them is a party; 4. Satisfactory completion of the due diligence exercise, in the form and substance acceptable to the PA/LA; 5. Evidence that this lodgement form in respect of the Bonds has been lodged with the SC; 6. The Transaction Documents (save for the Charge in respect of the Property which would only be executed, stamped or endorsed as exempted from stamp duty and presented for registration upon the discharge of the same by the existing master chargee, the charge over the strata tittles in respect of the Property upon the issuance of the same, and the assignment and charge by MMHSB over the MBMB Lease), have been executed, stamped or endorsed as exempt from stamp duty, where applicable and presented for registration; 7. Evidence that the Designated Accounts have been opened with the relevant account banks in accordance with the provisions herein stated; 8. Confirmation from IPSB that no event of default under the IPSB Bonds ( Event of Default (IPSB Bonds) ) has occurred is continuing or shall occur upon the issuance of the Bonds; Page 19 of 26

20 9. Letter of authorization from the Issuer to the Security Trustee copied to the Trustee and Facility Agent authorising the Security Trustee to utilise the proceeds of the Bonds towards the payment of all fees and expenses in respect of the Bonds; 10. All relevant notices and acknowledgements (where applicable) shall have been made or received as the case may be; 11. A report of the relevant company searches conducted on each of the Issuer and the Security Parties, the results of which are satisfactory to the PA/LA; 12. A report of the winding up searches conducted on each of the Issuer and the Security Parties, the results of which are satisfactory to the PA/LA; 13. Delivery by the Issuer of documentary evidence that all dividends payable by IPSB to MMHSB will be deposited directly into the DSRA and such dividends will not be paid into any other account during the tenure of the Bonds without the prior written consent of the Security Trustee; 14. A confirmation from the board of directors of IPSB that: (a) PSSB has agreed to waive its rights to dividends from IPSB; (b) PSSB has agreed to waive all voting rights with regards to declaration and payment of dividends by IPSB ; (c) KMB has agreed to waive its rights to dividends from IPSB pursuant to the terms under the Shareholders Agreement; (d) KMB has agreed to waive all voting rights with regards to the declaration and payment of dividends by IPSB pursuant to the terms under the Shareholders Agreement; (e) KMB has agreed to waive its rights, claims or recourse against MMHSB, PSSB and IPSB in respect of KMB s Entitlement (as defined in Other terms and conditions (xliii) KMB s Entitlement ) provided that the payment to KMB shall be paid in full by Digistar Corporation without fail; (f) MMHSB has agreed to authorise the Trustee (IPSB Bonds) to make payment of the coupon and principal of the IPSB Subordinated Bonds held by it into the DSRA in the event that the dividends to be paid by IPSB to it is insufficient to meet the Minimum Balance; (g) IPSB shall operate its business in accordance with good industry practice in order to maximise revenues to be transferred to MMHSB for the purposes of the deposit of revenues (in the form of dividends) in the DSRA; and (h) the Contract Sum payable by IPSB to Digistar Holdings shall be paid to Digistar Corporation as agreed between Digistar Holdings and Digistar Corporation by depositing the same directly into the DSRA. 15. A confirmation from MMHSB that it does not and will not have, for as long as the Bonds remain outstanding, any liabilities or creditors nor will MMHSB undertake any business activities other than (a) investment holding in IPSB and (b) as a lessee of the car park pursuant to the MBMB Lease and ancillary matters in relation thereto; 16. Delivery by the Issuer of documentary evidence or a letter from KMB to Digistar Page 20 of 26

21 Corporation confirming (i) that KMB has agreed to waive its rights to dividends from IPSB pursuant to the terms of the Shareholders Agreement; and (ii) that KMB has agreed to waive all voting rights with regards to the declaration and payment of dividends by IPSB pursuant to the terms under the Shareholders Agreement; and (iii) that KMB has agreed to waive its rights, claims or recourse against each of MMHSB, PSSB and IPSB in respect of the KMB s Entitlement (as set out in Clause 7.3A of the Shareholders Agreement), provided that the payment to KMB shall be paid in full by Digistar Corporation without fail; 17. Delivery by the Issuer of documentary evidence that the Trustee (IPSB Bonds) has received irrevocable instructions/authorisation from MMHSB to pay all dividends paid by IPSB to MMHSB into the DSRA during the tenure of the Bonds together with the duly acknowledged receipt of such notice by the Trustee (IPSB Bonds); 18. A letter of undertaking by IPSB undertaking to (i) utilise 80% of the Maintenance Services Charges collected for maintenance of the JKR Project; (ii) via standing instructions given to the Security Trustee (IPSB Bonds), ensure that the deposit of the balance of 20% of the Maintenance Services Charges is deposited into the CA; and (iii) agree to release funds from the MSCA to pay for the maintenance of the JKR Projects or IPSB s operating expenses; 19. Satisfactory legal opinion from the Solicitors addressed to the PA/LA as to the validity and enforceability of the Transaction Documents and a confirmation that all conditions precedent have been fulfilled; 20. Evidence that a private caveat has been lodged over the Property; 21. Receipt of a redemption statement and letter of undertaking from the existing master chargee to deliver the duly executed discharge and release documents in respect of the charged Property and all original documents of title in respect thereof to the Security Trustee within 21 business days upon the payment of the redemption sum in respect of the SPSB s Existing Loan (as defined in Other terms and conditions (i) Details on the utilisation of proceeds by Issuer ); 22. Delivery by SPSB of a valuation report (in form and substance acceptable to the Facility Agent and addressed to the Security Trustee on the Property being valued at no less than RM67 million); 23. Evidence that the Trustees Reimbursement Account in relation to the Bonds has been established in accordance with the provisions herein stated; 24. Confirmation from the Solicitors on (i) the validity of the monthly payment of RM200,000 by SPSB into the DSRA and (ii) that they have sighted the Shareholders Agreement and a form of the Management Agreements and pursuant to confirmations given by SPSB to the Lead Arranger in respect of the Management Agreement and Digistar Corporation and MMHSB to the Lead Arranger in respect of the Shareholders Agreement, each of the Shareholders Agreement and Management Agreement is subsisting based on its terms, and 25. Such other conditions precedent as may be deemed necessary by the PA/LA and/or advised by the Solicitors and agreed the Issuer. (27) Representations and: Representations and warranties shall include but not limited to the following: Page 21 of 26

22 warranties 1. Each of the Issuer and the Security Parties (the Obligors ) 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 assets, and has full beneficial ownership of all its property and assets; 2. Where available, the constitution of each of the Obligors incorporate provisions which authorise its entry into the Transaction Documents (to which it is a party), and all necessary corporate and other relevant actions will be taken to authorise its entry into the Transaction Documents (to which it is a party), 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, each of the Obligors to execute and deliver and perform the transactions contemplated in the Transaction Documents in accordance with their terms; 3. All necessary actions, authorisations and consents required under the Transaction Documents by any of the Obligors has been taken, fulfilled and obtained and remain in full force and effect; 4. Neither the execution and delivery of any of the Transaction Documents nor the performance of any of the transactions contemplated by the Transaction Documents has or will 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 Obligors or any of its assets is bound or which is applicable to the Obligors 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 constitution 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 Obligors assets other than those covered under the Transaction Documents; 5. The Transaction Documents are or will when executed be in full force and effect and constitute valid, binding and enforceable obligations of the Issuer and/or the Security Party in accordance with its terms; 6. No Event of Default (IPSB Bonds) or Event of Default has occurred, is continuing or would occur as a result of the issuance of the Bonds or the entry into, the performance of, or any transaction contemplated by, any Transaction Documents; 7. There is no encumbrance on the assets of the Obligors except as permitted under the Transaction Documents; 8. Neither the Obligors nor any of their assets are entitled to immunity from suit, execution, attachment or legal process; 9. The Obligors are in compliance with any applicable laws and regulations; 10. There is no litigation or arbitration that will materially and adversely affect the ability of any of the Obligors to perform its obligations under the Transaction Documents; 11. The Obligors audited financial statements will be prepared and are prepared in accordance with approved accounting principles and standards in Malaysia and Page 22 of 26