Kinabalu Capital Sdn Bhd (formerly known as Dataran Terbit Sdn Bhd) ( SPV or Issuer )

Transcription

1 PRINCIPAL TERMS AND CONDITIONS FOR THE PROPOSED COMMERCIAL PAPERS ( CP ) AND MEDIUM TERM NOTES ( MTN ) PROGRAMME ( CP/MTN PROGRAMME ) OF UP TO RM270 MILLION IN NOMINAL VALUE FOR 7 YEARS BACKGROUND INFORMATION 1. ISSUER (i) Name : Kinabalu Capital Sdn Bhd (formerly known as Dataran Terbit Sdn Bhd) ( SPV or Issuer ) (ii) Address : Registered Office: Level 21 The Gardens South Tower Mid Valley City Lingkaran Syed Putra Kuala Lumpur (iii) Business Registration No. : W (iv) Date/Place of incorporation : 27 April 2011/Malaysia (v) Date of Listing : Not applicable (vi) Status : The Issuer is a resident non-bumiputra controlled company. The Issuer is wholly-owned by Quill Capita Trust ( QCT ), a Real Estate Investment Trust ( REIT ). (vii) Principal activities : The Issuer is a special purpose company incorporated for the purpose of raising financing on behalf of QCT. (viii) Board of Directors : (a) Lim Chee Ming (b) Emily Lee Ching Huey (ix) Structure of shareholdings and names of shareholders or, in the case of public company, names of all substantial shareholders : Shareholder Direct Interest Mayban Trustees Berhad as trustee for QCT RM2.00 comprising 2 ordinary shares of RM1.00 each (x) Authorised and paid-up share capital Authorised: Ordinary shares of RM1.00 each Issued and fully paid-up: Ordinary shares of RM1.00 each RM100, RM2.00 Page 1 of 25

2 PRINCIPAL TERMS AND CONDIT IONS OF THE CP/MTN PROGRAMME 2. Names of parties involved in the proposed transaction (where applicable) (i) Principal Adviser / Lead Arranger / Lead Manager : Hong Leong Investment Bank Berhad ( HLIB ) (ii) Co-Arranger(s) : Not applicable. (iii) Valuers : CH Williams Talhar & Wong Sdn Bhd (iv) Solicitors : Jeff Leong, Poon & Wong for the REIT Trustee (as defined hereinafter) (v) Financial Adviser : Not applicable. (vi) Technical Adviser : Not applicable. (vii) Guarantor : Not applicable. Wong & Partners for the Lead Arranger ( Legal Counsel ) (viii) Trustee : Malaysian Trustees Berhad ( Notes Trustee ) (ix) Facility Agent : HLIB (x) (xi) Primary Subscriber(s) and Amount Subscribed Underwriter(s) and Amount Underwritten : Not applicable. : Not applicable. (xii) Shariah Adviser : Not applicable. (xiii) Central Depository : Bank Negara Malaysia ( BNM ) (xiv) Paying Agent : BNM (xv) Reporting Accountant : Not applicable (xvi) Others (a) Security Agent : Malaysian Trustees Berhad (b) Issuing Agent : HLIB (c) REIT Trustee : Mayban Trustees Berhad, as the trustee for QCT, which is constituted by a REIT Trust Deed executed between the REIT Manager (as defined hereinafter) and Mayban Trustees Berhad. (d) REIT Manager : Quill Capita Management Sdn Bhd ( QCM ), as the REIT Manager for QCT. The principal activity of QCM Page 2 of 25

3 is to manage and administer REITs. 3. Facility Description : Commercial Papers ( CP ) and Medium Term Notes ( MTN ) Programme ( CP/MTN Programme ) of up to RM270 million in nominal value for 7 years. The CP and/or MTN to be issued under the CP/MTN Programme shall hereinafter be collectively referred to as the Notes. 4. Issue Size (RM) : The issue size of the CP/MTN Programme shall be up to RM270million in nominal value. 5. Issue Price (RM) : The CP shall be issued at a discount to the nominal value. The MTN shall be issued at a discount or at par to the nominal value. The issue price of the Notes shall be calculated in accordance with the Operational Procedures for Securities Services issued by Malaysian Electronic Clearing Corporation Sdn Bhd ( MyClear ), as amended or substituted from time to time ( MyClear Procedures ). The issue price of the relevant Notes shall be determined prior to each issuance. 6. Tenure of the Facility/Issue : Tenure of the CP/MTN Programme The Programme has an expected tenure of five (5) years ( Expected Tenure ) and a legal tenure of seven (7) years ( Legal Tenure ) commencing from the date of first issuance under the Programme. Tenure of the issue The CP have a minimum tenure of one (1) month and a maximum of twelve (12) months, provided always that the maturity date of the CP shall not fall after the expiry of the Legal Tenure. The MTN shall be issued for tenures of more than one (1) year up to an expected maturity of five (5) years ( Expected Maturity ) with a legal maturity falling two (2) years after the respective date of Expected Maturity ( Legal Maturity ), provided always that the Expected Maturity of the MTN shall not fall after the Expected Tenure and the Legal Maturity of the MTN shall not fall after the Legal Tenure. 7. Coupon or Equivalent Rate (%) : CP Not applicable as the CP are issued at discount to the nominal value. Page 3 of 25

4 MTN The coupon rates for the MTN shall be determined prior to issuance. 8. Coupon Payment Frequency and Basis : CP Not applicable. MTN Semi-annually in arrears based on actual days/365 days (when applicable). 9. Yield to Maturity ( YTM ) (%) : To be determined prior to or at issuance on a when issued basis. 10. Security/Collateral : The Notes under the CP/MTN Programme shall be jointly secured, inter-alia by the following:- a) A third party first legal charge by REIT Trustee over the Properties (as defined below); the ( Properties ) shall mean:- (i) Quill Building 1 DHL 1, a 4-storey office building together with a sub-basement and a basement carpark; and Quill Building 4 DHL 2, a 4-storey office building together with a sub-basement and 2-level basement carpark, both of which located at 3509 & 3511, Jalan Teknokrat 5, Cyberjaya, Selangor Darul Ehsan with a total market value of RM122 million as at 31 December 2010 ( QB 1 DHL 1 & QB4 DHL2); Page 4 of 25 (ii) Quill Building 2 HSBC, a 4-storey office building together with a sub-basement carpark located at 3500, Jalan Teknokrat 3, Cyberjaya, Selangor, with a total market value of RM118.0 million as at 31 December 2010; and (iii) Tesco Penang, a 3-storey building located at 1 Lebuh Tengku Kudin 1, Penang with a total market value of RM138 million as at 31 December 2010 ( Tesco Penang ). b) First party debenture over all present and future assets of the Issuer; c) An undertaking from the REIT Manager: (i) to deposit all rental cash flows generated from the Properties into the Revenue Account (as

5 described below); and (ii) that it shall not declare any dividends/distributions to QCT s unitholders if: (a) An Event of Default has occurred under the Transaction Documents (as defined hereinafter), is continuing and has not been waived; or (b) The Financial Covenants (as defined under item 24(xi)) are not met prior and after such distribution; d) First legal charge or assignment over the Designated Accounts (as described below) (Third party assignment by REIT Trustee for the Revenue Account, Operations Account and a first party assignment by the Issuer for the DSRA); e) Third party assignment of all the proceeds under the tenancy/lease agreements in relation to the Properties; f) Third party assignment over all rights and benefits under all the insurance policies in relation to the Properties; g) An irrevocable Power of Attorney to be granted by the REIT Trustee in favour of the Security Agent to dispose the Properties upon occurrence of a Trigger Event; h) First legal assignment over the financing agreements ( REIT Trustee Financing Agreement ) entered into between the Issuer and the REIT Trustee for the advancement of funds from the Issuer to the REIT Trustee; i) Third party first legal charge over 100% of the shares of the Issuer; and j) Any other securities deemed appropriate and mutually agreed between the parties prior to execution of the Transaction Documents. The security set out in items (a), (d) (except for the first party assignment by the Issuer in respect of the DSRA), (e) and (f) above will be created and perfected to secure the Notes upon the financing facilities which the securities are secured against are fully settled and the securities therein are released/discharged. 11. Details on Utilisation of Proceeds : Proceeds raised from the Notes shall be utilised to:- a) refinance maturing notes under the existing Page 5 of 25

6 12. Sinking Fund : Not applicable. 13. Rating : Unrated. 14. Form and Denomination : Form CP/MTN Programme of up to RM118.0 million ( Initial Issuance ) issued by Gandalf Capital Sdn Bhd; b) repay facilities of up to RM73 million procured by Samwise Capital Sdn Bhd, including interest to be charged upon redemption; and c) balance thereof, shall be utilized as future working capital, and to defray all relevant expenses incurred under the CP/MTN Programme. Each series of the Notes shall be represented by a Global Certificate to be deposited with BNM and shall be in bearer form. No physical delivery of the Notes is permitted. The Notes shall be issued in accordance with(a) the Participation and Operation Rules for Payment and Securities Services issued by MyClear ( MyClear Rules ) and (b) MyClear Procedures, or their replacement thereof (collectively the MyClear Rules and Procedures ) applicable from time to time. Denomination Each Notes certificate will be in the denomination of RM100,000 if issued in accordance of MyClear Rules or such other denominations as shall be agreed upon between the Lead Arranger and the Issuer for private placement. 15. Mode of Issue : The Notes will be issued by way of private placement without prospectus. 16. Selling Restriction : The Notes are non-transferable and non-tradable. The Notes may only be offered to Subscriber(s) falling within the relevant category of persons specified in section 4(6) of the Companies Act 1965 (as amended from time to time) and Schedules 6, 7 and 9 of the Capital Markets and Services Act 2007 (as amended from time to time) where applicable. 17. Listing Status : The Notes will not be listed on any exchange. 18. Minimum Level of Subscription (RM or %) : 100% of the size of each issuance. 19. Other Regulatory : Not applicable. Page 6 of 25

7 Approvals Required in Relation to the Issue, Offer or Invitation and Whether or not Obtained 20. Conditions Precedent : Conditions precedent relevant for issuance of this nature as advised by the Legal Counsel including but not limited to the following:- 1. Receipt of valuation report on the Properties indicating a combined current market value of at least RM378.0 million, in form and substance acceptable to the Lead Arranger; 2. Receipt of undertaking cum redemption letter from the existing trustee/financier/lender confirming the redemption amount, and its undertaking to release the Properties upon full repayment/settlement; 3. Board resolution from the Issuer authorising the acceptance and issuance of the Notes by the Issuer and for the Issuer to enter into and execute the Transaction Documents in relation to the issuance of the Notes; 4. Board resolution from the Issuer authorising the acceptance of the REIT Trustee Financing Arrangement and for the Issuer to enter into and execute the REIT Trustee Financing Agreement; 5. Relevant consents and approvals and resolution empowering the REIT Trustee has been obtained and remain valid (i) to provide security under the CP/MTN Programme, (ii) to enter into and execute all the relevant agreements in relation to the REIT Trustee Financing Agreement and (iii) to do all that is necessary for Issuer to enter into and execute all relevant agreements in relation to the CP/MTN Programme; 6. All approvals and waivers required in relation to the implementation of the CP/MTN Programme and its terms and conditions, not limited to that from Securities Commission Malaysia ( SC ) shall have been obtained and remain valid; 7. Execution of Transaction Documents (save for the security documents which shall be executed in escrow) including the Power of Attorney granting the Security Agent powers as set out therein including the disposal of the Properties; 8. Satisfactory legal due diligence on the Properties and the tenancy agreements with respect to the Properties shall have been completed and acceptable to the Lead Arranger; Page 7 of 25

8 9. Confirmation that the Designated Accounts have been established in accordance with the provisions of the Transaction Documents; 10. Consent from the state authority for the legal charge of the Properties to the CP/MTN Programme shall have been obtained and any conditions imposed by the state authority shall have been agreed by the Lead Arranger, if applicable and procedurally possible; 11. Legal opinion from the Legal Counsel confirming that (1) the Transaction Documents are legally valid and binding; and (2) all conditions precedent to the Notes have been duly complied with by the Issuer; and 12. Such other Conditions Precedence as may be stipulated by the Lead Arranger and/or the Legal Counsel prior to execution of the Transaction Documents. The continuing availability of the Programme is subject to the following conditions subsequent being met:- 1. the security documents pursuant to the security set out in items 10(a), (d), (e) and (f) above have been duly executed by the parties thereto and endorsed as exempted from stamp duty; 2. the third party first legal charge over the Properties has been presented for registration at the relevant land office; 3. the filing of the relevant Forms 34 with the Companies Commission of Malaysia in respect of charges created pursuant to the securities set out in paragraph 1 above; 4. the registration of the power of attorney clauses in the relevant security documents with the High Court of Malaya set out in paragraph 1 above; 5. the service of the relevant notices of assignment on the relevant counterparties and the receipt of the relevant acknowledgements by the Security Agent. Conditions Precedent for subsequent issuance(s):- 1. Issuer s certification that it is in compliance with all Representations and Warranties and Covenants under the Transaction Documents at the time of issuance and will continue to comply with such; Page 8 of 25

9 2. Documentary evidence that it has achieved the minimum Security Cover Ratio; 3. No Event of Default has occurred and continues to subsist; and 4. Such other subsequent Conditions Precedent as may be stipulated by the Lead Arranger and/or the Legal Counsel prior to execution of the Transaction Documents. 21. Representations and Warranties Representations and warranties normal for a facility of this nature as advised by the Solicitors and/or the Legal Counsel and the SC under its REIT guidelines, including but not limited to the following: 1. the Issuer is a company duly established and existing under Malaysian law and has the power and authority to enter into the business in which it is engaged; 2. the Issuer have the power to enter into, exercise its rights under and perform its obligations under the Transaction Documents; 3. all necessary actions, authorisations and consents required for its performance under the Transaction Documents by the Issuer have been taken, fulfilled and obtained and remain in full force and effect; 4. the Issuer s entry into, exercise of its rights under and performance of the Transaction Documents do not and will not violate any existing law or any agreements to which it is a party; 5. the Issuer s audited financial statements will be and are prepared (if any) in accordance with approved accounting principles and standards in Malaysia and fairly represent its financial position; 6. no event that would constitute a contravention of or default under the Transaction Documents has occurred; 7. no litigation or arbitration is current or, to the best of the Issuer s knowledge, information and belief, is threatened, which if adversely determined would have a Material Adverse Effect (defined hereinafter); and 8. any other representations and warranties as advised by the Legal Counsel. Material Adverse Effect means, in relation to any event, the occurrence of which would materially and Page 9 of 25

10 adversely affect (i) the ability of the Issuer to perform any of its obligations under the CP/MTN Programme and/or any of the Transaction Documents to which they are a party and/or (ii) the financial position and/or the business of the Issuer. 22. Events of Default : Events of Default normal for a facility of this nature as advised by the Legal Counsel and those required to comply with the SC s Guidelines on the Minimum Contents Requirements for Trust Deeds, including but not limited to the following: 1. the Issuer fails to pay any sum due and payable under the Transaction Documents and/or any of the Notes on due date under the CP/MTN Programme or upon written demand by the Notes Trustee in accordance with the Transaction Documents. Page 10 of 25 For avoidance of doubt, any non-repayment of the MTN on the date of the Expected Maturity of such MTN does not constitute an Event of Default but a Trigger Event; 2. any representation or warranty made or implied under any provision of the Transaction Documents or any information, notice, opinion or certificate or other document delivered pursuant to the terms of the Transaction Documents proves to have been incorrect or misleading by the Notes Trustee as of the date at which made or deemed made and which would have a Material Adverse Effect; 3. any consent referred to in the Transaction Documents is revoked or withheld or modified or is otherwise not granted or fails to remain in full force and effect, to the extent that such shall have a Material Adverse Effect; 4. the Issuer enters into or proposes to enter into, or there is declared by any competent court or authority, a moratorium on the payment of indebtedness or other suspensions of payments generally (other than for the purposes of and followed by a reconstruction previously approved in writing by the Notes Trustee, unless during or following such reconstruction it becomes or is declared to be insolvent); 5. any provision of the Transaction Documents is or becomes (or is bona fide claimed by the Issuer or any other person to be or to have become) unenforceable for any reason whatsoever; 6. any step or action is taken for the winding up,

11 Page 11 of 25 dissolution or liquidation of the Issuer (including, without limitation, the presentation of a petition for the winding up against the Issuer or the making of any order or the passing of any resolution for the winding up, dissolution or liquidation of the Issuer unless it is contested in good faith within 30 days and dismissed, struck off, discharged, stayed, suspended, withdrawn or set aside within 90 days (or such longer period as may be agreed by the Notes Trustee) from the date of service of such winding-up petition or if a winding-up order has been made against it). For the avoidance of doubt, the grace period of 90 days is only relevant in the event the action or dissolution has not been conclusively determined or adjudged by the courts to be final; 7. a distress, execution, attachment or other legal process is levied, enforced or sued out against any of the assets of the Issuer or any part thereof, unless it is contested in good faith within 30 days and dismissed, struck off, withdrawn, suspended, set aside discharged or stayed within 90 days. For the avoidance of doubt, the grace period of 90 days is only relevant in the event such legal process has not been conclusively determined or adjudged by the courts to be final; 8. a receiver, manager, liquidator, trustee, administrator, bailiff or similar officer (other than any officer appointed by BNM) is appointed in respect of the Issuer or in respect of all or any part of the respective assets, properties or undertaking of the Issuer (other than those contemplated or permitted under the Transaction Documents) which may for the time being affect the whole or a substantial part of the assets becomes enforceable, unless it is contested in good faith within 30 days and dismissed, struck off, discharged, stayed, withdrawn or set aside discharged, suspended or set aside by the Issuer within 90 days from the date of such taking of possession or appointment or of service of notice of execution or enforcement; 9. the Issuer ceases or threatens to cease to carry on all or a substantial part of its business; 10. the Issuer becomes insolvent or commits an act of insolvency or is unable to pay its debts as they fall due or any judgment or judgments is or are obtained against the Issuer; 11. the Issuer repudiates any of the Transaction Documents or the Issuer does or causes to be done any act or thing evidencing an intention to

12 repudiate any of the Transaction Documents; 12. the Issuer stops, suspends or threatens to stop or suspend payment of all or any part of its debts, begins negotiations or takes any proceeding or other step with a view of readjustment, rescheduling or deferral of all of its indebtedness (or of any part of its indebtedness which it will or might otherwise be unable to pay when due) or proposes or makes a general assignment or any arrangement or composition with or for the benefit of its creditors (other than for the purposes of and followed by a reconstruction previously approved in writing by the Notes Trustee, unless during or following such reconstruction it becomes or is declared to be insolvent) or where a scheme of arrangement under section 176 of the Companies Act 1965 has been initiated by or against it; 13. an event of default has been declared under the REIT Trustee Financing Agreement; 14. an event of total loss occurs on any of the Properties which in the reasonable opinion of the Notes Trustee would significantly impair the ability of the Notes to be serviced (e.g. earthquake, fire, war etc); 15. 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 reasonable opinion of the Trustee has a Material Adverse Effect; 16. the Issuer defaults on any other provision of the Transaction Documents (other than any covenant to pay) which is not capable of remedy or which, being capable of remedy, is not remedied within 30 days after the Issuer became aware of or having been notified in writing by the Notes Trustee of the event or situation or such other longer remedy period as may be allowed under the Transaction Documents for the relevant event or situation as may be agreed between the Trustee and the Issuer; and 17. such other event as may be advised by the Legal Counsel and to be mutually agreed between the Lead Arranger and the Issuer. Upon the declaration of an Event of Default, the Security Agent shall act upon the instruction of the Note holders to enforce the rights accruing to it under the security documents. Page 12 of 25

13 23. Principal Terms and Conditions for Warrants : Not applicable 24. Other Principal Terms and Conditions for the Issue (i) Issue Date : The first issuance under the CP/MTN Programme shall be within two (2) years from the date of the SC s approval. (ii) Redemption : Unless previously redeemed, purchased and cancelled, the Notes shall be redeemed by the Issuer at par or at its respective nominal value prior to or on the applicable/relevant maturity date(s), under the CP/MTN Programme. For avoidance doubt, the non-payment of the MTN on the Expected Maturity will not in itself constitute an Event of Default under the CP/MTN Programme, but a Trigger Event is deemed to have occurred. The nonpayment of the Notes on Legal Maturity will be an Event of Default. All Notes redeemed may not be reissued. However, the Issuer can issue fresh Notes under the CP/MTN Programme provided always the maturity of the Notes shall not exceed the tenure of the CP/MTN Programme and the outstanding Notes at any time shall not exceed the limit of the CP/MTN Programme. (iii) (iv) Repurchase and Cancellation Designated Accounts : The Issuer may at any time purchase the Notes at any price in the open market or by private treaty. All Notes purchased and cancelled shall not be resold. New Notes maybe issued and subject to the limit of the CP/MTN Programme and within the tenure prescribed under the CP/MTN Programme. : Revenue Account The REIT Trustee shall open a Revenue Account to be solely operated by the REIT Trustee to capture all rental income/income/insurance proceeds received from the Properties and excess funds from the Debt Service Reserves Account ( DSRA ). Funds in the Revenue Account shall be applied to meet the following permitted expenditure in the following order of priority: (i) Payment obligations due and payable on the REIT Trustee Financing Agreement; (ii) Payment of insurance premiums on the Properties when due and payable; (iii) Transfer into the DSRA as advancement to the Issuer to meet its Minimum Required Amount (as defined under DSRA) obligations; Page 13 of 25

14 (iv) For payment of Trust expenses; (v) Transfer to the Operating Account (as defined hereinafter) on monthly basis to meet operating expenses relevant to the Properties; (vi) payment of QCT s expenses allocated for the Properties; (vii) Distribution to QCT unitholders; and (viii) To make investment under Permitted Investments (as defined hereinafter). Upon an Event of Default or Trigger Event, the REIT Trustee would act in accordance with the direction of the Security Agent, which shall be in accordance with the REIT guidelines and the REIT trust deed executed between the REIT Trustee and the REIT Manager, for payments out of the Revenue Account. Operations Account The REIT Trustee shall open an Operations Account for the purpose of managing the operating expenditure of the Properties. The Operations Account shall be operated solely by the REIT Manager. The REIT Manager shall prepare a half-yearly budget for operating expenditure of the Properties. Funds will be transferred into the Operations Accounts from the Revenue Account on a monthly basis. The funds in this account will be applied to meet the projected operating expenditure. Any variations of 10% or higher above the budgeted operating expenditure shall require the approval of the Notes Trustee. Balances standing to the credit of the Operations Account at the end of each month (if any) shall remain in the account until the end of the then prevailing halfyearly budget period ( Ending Balance ). Such amounts that are required to pay for accruals and other operating expenditures relating to the said period shall then be set aside ( Accrued Amount ) in the Operations Account. The difference between the Ending Balance and the Accrued Amount shall be referred to as the Surplus Amount. Pursuant to the next half-yearly budget, the next monthly transfer of funds from the Revenue Account shall be net of the Surplus Amount (i.e. the budgeted transfer amount for next month less the Surplus Amount shall be equal to the actual amount of funds to be transferred). Upon an Event of Default or Trigger Event, the REIT Trustee and REIT Manager would act in accordance with the direction of the Security Agent, which shall be Page 14 of 25

15 in accordance with the REIT guidelines and the REIT trust deed executed between the REIT Trustee and the REIT Manager, for payments out of the Operations Account. The funds in this account will be applied to meet the projected operating expenditure. DSRA The Issuer shall open and maintain an identifiable DSRA to be solely operated by the Security Agent for the purpose of depositing: (i) (ii) (iii) such amount sufficient to build up to the Minimum Required Amount (as defined hereinafter) and to be maintained in the DSRA; payments received pursuant to the REIT Trustee Financing Agreement; and proceeds from the disposal of the Properties pursuant to (a) the Security Agent exercising its rights under the Power of Attorney in accordance with the provisions under Trigger Events or (b) upon the occurrence of an Event of Default. Minimum Required Amount shall mean at any time, the amount equivalent to any of the following (whichever is applicable):- (A) Upon first issuance of MTN under the CP/MTN Programme:- (B) Over such period ending six (6) months from first issuance of the CP/MTN Programme:- (C) Subsequent to (A) and (B) above, but prior to the occurrence of a Trigger Event:- (D) Upon the occurrence of a Trigger Event:- Three (3) months equivalent of interest/coupon payable under the MTN. Progressive monthly build-up of a further three (3) months equivalent of interest/coupon payable under the MTN. Six (6) months equivalent of interest/coupon payable under the MTN shall be maintained at all times in the DSRA. Progressive monthly build-up (i.e. 1/6 every month) of a further six Page 15 of 25

16 (6) months equivalent of applicable interest / coupon payable under the MTN, to the equivalent of twelve (12) months aggregate interest/coupon payable. The Issuer shall maintain the Minimum Required Amount at all times. Transfers from the Revenue Account to meet the Issuer s payment obligations shall be made at least three (3) business days prior to such payments falling due and payable. In the event that the balance held in the DSRA is less than/exceeds the Minimum Required Amount, the shortfall/excess shall be topped up not later than three (3) business days from/released to the Revenue Account as the case may be. Funds held in the DSRA may be utilised for investments in Permitted Investments, provided always that such Permitted Investments shall mature and the proceeds be remitted into the DSRA no later than five (5) business days before any payment obligations become due and payable. The funds in this account will be applied to meet payment obligations of the CP/MTN Programme as and when due if no Event of Default or Trigger Event has occurred, in the following order of priority:- a) taxes (if any) falling due and payable; b) fees, commissions and expenses of the Issuer; c) interest/coupon payment under the MTN falling due and payable; d) principal payment under the CP/MTN falling due and payable; e) thereafter, any excess funds in the DSRA are to be deposited into the Revenue Account. Upon Trigger Event Upon occurrence of a Trigger Event and the disposal of the Properties by the Security Agent pursuant to the Power of Attorney, the Security Agent shall set aside the proceeds of the disposal of the Properties to meet the obligations of the Issuer in the following order of priority:- (i) (ii) (iii) (iv) taxes (if any) falling due and payable; fees, commissions and expenses of the Issuer; interest/coupon payment under the MTN falling due and payable; principal payment under the CP/MTN falling due and payable; Page 16 of 25

17 (v) thereafter, any excess funds in the DSRA are to be deposited into the Revenue Account. Upon Event of Def ault Upon occurrence of an Event of Default, the REIT Trustee shall transfer funds from the Revenue Account and Operations Account to the DSRA, to meet the obligations of the Issuer in the following order of priority:- (i) (ii) (iii) (iv) (v) taxes (if any) falling due and payable; fees and expenses of the Issuer falling due and payable; interest/coupon payment under the MTN falling due and payable; principal payment under the CP/MTN falling due and payable; thereafter, any excess funds in the DSRA are to be deposited into the Revenue Account. (v) (vi) Permitted Investments Transaction Documents : Permitted Investments shall mean:- a) Securities guaranteed by the Government of Malaysia; b) Fixed income securities issued in Malaysia with the approval of the Government of Malaysia by any authority established under federal or state law; c) investment in money market instruments where there is the flexibility of early withdrawal without incurring any penalty such as bankers acceptance or promissory notes or certificates of deposit issued by any bank licensed pursuant to the Banking and Financial Institutions Act 1989 and having a minimum long term rating of AA1 and short term rating of P1 or its equivalent; d) Deposits with any bank licensed pursuant to the Banking and Financial Institutions Act 1989 and having a minimum long term rating of AA1 and short term rating of P1 or its equivalent; and e) other debt or capital market instruments of private entities having a long term rating of at least AA1 and short term rating of P1 as determined by RAM Rating Services Berhad or its equivalent by Malaysian Rating Corporation Berhad, Provided that the Permitted Investments shall mature no later than five (5) business days before any payment obligations are due and payable. : Standard documentation for a facility of this nature, which would include, inter alia: Page 17 of 25

18 a) Trust Deed; b) Programme Agreement; c) REIT Trustee Financing Agreement; and d) Security Documents. (vii) Status : The Notes shall constitute direct, secured, unconditional debt obligations of the Issuer ranking pari passu in all respects without discrimination, preference or priority among themselves and shall rank 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. (viii) Early Redemption : The Issuer may at any time after thirty six (36) months upon issuance of the relevant MTN, early redeem the MTN in whole on any coupon payment dates at the nominal value of the MTN, provided that:- a) the Issuer has given the MTN holder(s) not less than thirty (30) business days written notice stating the nominal value to be early redeemed; b) the Issuer has paid to the MTN holder(s) an early redemption premium of one point zero per centum (1.0%) flat on the amount to be early redeemed by the MTN holder(s) as a result of such early redemption ( Early Redemption Penalty ); and c) the Issuer has paid in full all accrued coupon and other amount due on such early redemption date. For the avoidance of doubt, the Early Redemption Penalty may be waived by the MTN holder(s) at its sole discretion. In the event the Issuer undertakes and the MTN holder(s) participate(s) (in its capacity as lender, investor or otherwise) in a fund raising exercise which refinances the MTN, the MTN holder(s) shall not unreasonably withhold in waiving the Early Redemption Penalty. (ix) Positive Covenants Positive Covenants normal for facility of this nature as advised by the Legal Counsel and those required to comply with the SC s Guidelines on the Minimum Contents Requirements for Trust Deeds, including but not limited to:- 1) it shall provide to the Notes Trustee at least on an annual basis, a certificate confirming that it has complied with all its obligations under the Transaction Documents and that there does not Page 18 of 25

19 exist or had not existed, from the first date the Notes were issued or the date of the last certificate, as the case may be, any Event of Default, and if such is not the case, to specify the same; 2) it shall deliver to the Notes Trustee as soon as they become available (and in any event within 180 days after the end of its financial year) copies of its financial statements for that year which shall contain the income statements and balance sheets of the Issuer and which are audited and certified without qualification by a firm of independent certified public accountants acceptable to the Trustee; 3) it shall promptly notify the Notes Trustee forthwith upon it becoming aware 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 it before any court or tribunal or administrative agency which has a Material Adverse Effect; 4) it shall promptly give notice to the Notes Trustee of the occurrence of any Event of Default or any event that gives rise to any right or remedy under the Transaction Documents becoming immediately enforceable, forthwith upon becoming aware thereof, and it shall take all reasonable steps and/or such other steps as may reasonably be requested by the Notes Trustee. 5) it 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 in a reasonable diligent, proper and efficient manner or for the Issuer to enter into or perform its obligations under the Transaction Documents or to ensure the legality, validity, enforceability, admissibility in evidence of its obligations or the priority or rights of the Notes Trustee or investor(s) under the Transaction Documents and it shall comply with the same; 6) it 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; Page 19 of 25

20 7) it 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; 8) it shall promptly perform and carry out all its obligations under all the Transaction Documents (including but not limited to redeeming the Notes on the relevant maturity date(s) or any other date on which the Notes are due and payable) and ensure that it shall immediately notify the Notes Trustee in the event that it is unable to fulfil or comply with any of the provisions of the Transaction Documents; 9) it shall prepare its financial statements on a basis consistently applied in accordance with the generally approved accounting standards in Malaysia and those financial statements shall give a true and fair view of its results of the operations 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; 10) it shall keep proper books and records at all times and will permit upon reasonable request by the Notes Trustee or its agent and servants and any person appointed or authorised by it at all reasonable times to have access to and to inspect its books of accounts and records relating to its business at any office, branch or place of business of the Issuer and all records kept by any other persons; 11) it shall promptly comply with all applicable laws including the provisions of the CMSA and all circulars, conditions or guidelines issued by the SC from time to time; 12) it shall maintain a paying agent in Malaysia and shall procure that the Paying Agent to notify the Notes Trustee in the event that the Paying Agent does not receive payment from the Issuer on the relevant due dates; and 13) such other undertakings as may be advised by the Legal Counsel and to be mutually agreed between the Lead Arranger and the Issuer. (x) Negative Covenants Negative covenants normal for facility of this nature as advised by the Legal Counsel and those required to comply with the SC s Guidelines on the Minimum Contents Requirements for Trust Deeds, including but not limited to the following, without the prior written Page 20 of 25

21 consent of the Notes holders: 1) the Issuer will not incur, assume or permit any additional indebtedness except in connection with the Notes issuance, shareholders advances (if any) which are to be subordinated to the Notes or in connection with any indebtedness relating to invoices issued by service providers ancillary to the Notes or related to the Transaction Documents; 2) QCT (via the REIT Trustee) will not make any distributions out of the Revenue Accounts to QCT unitholders at any time if: (i) the DSCR (as defined hereinafter) falls below 1.5 times as a result of such distribution; or Page 21 of 25 (ii) an Event of Default has occurred, is continuing and has not been waived or an Event of Default will occur as a result of such payment or distribution. The Issuer will not declare any dividends or make any other distributions on or in respect of its share capital; 3) other than those created for the benefit of the holders of the Notes and as disclosed to the Lead Arranger todate, the Issuer and the REIT Trustee, as the security party, will not charge, pledge, assign or otherwise create or permit to exist any security interest over the Properties, and revenues present or future of the Properties save and except for the existing security interest created in favour of the existing trustee/financier/lender; 4) the Issuer will not amend its Memorandum and Articles of Association; 5) the Issuer will not assign its rights or transfer its obligations under the Transaction Documents; 6) the Issuer will not surrender, transfer, assign, relinquish or otherwise dispose of any of its rights and interest under any of the Transaction Documents; 7) the Issuer will not enter into any amalgamation, demerger, reconstruction or winding up of itself which may materially affect its ability to perform its obligations; 8) the Issuer will not make any loans to its directors,

22 shareholder(s) or its related or associated companies except for the advances to be made to the REIT Trustee; 9) the Issuer will not open any accounts other than the DSRA; 10) the Issuer will not enter into any other contracts, agreements or other arrangements or commitments other than those required under the Transaction Documents or for the purpose relating to the Notes; and 11) the Issuer will not undertake any investments other than the Permitted Investments. 12) such other undertakings as may be advised by the Legal Counsel to be mutually agreed between the Lead Arrangers and the Issuer. (xi) Financial Covenants : Financial covenants normal for a facility of this nature as may be imposed by the SC REIT guidelines, but to include a) The Issuer will maintain the Debt Service Coverage Ratio ( DSCR ) of above 1.5 times at all times. The DSCR is the ratio of the Available Cashflow to the Debt Service. Available Cashflow shall mean, at any time, in relation to the previous twelve (12) months period commencing from the calculation date, the sum of:- (a) (b) the balance standing to the credit of the Revenue Account, the Operations Account and the DSRA at the beginning of such period; and net property income from the Properties for such period prior to (i) distribution to the unitholders of QCT; and (ii) payment of the Debt Service and expenses relating thereto. Page 22 of 25 Debt Service shall mean at any time, in relation to the previous twelve (12) months period commencing from the date of calculation, the nominal value and any coupon paid and repaid under the Notes and not refinanced by the proceeds from the issuance of additional Notes calculated based on the following formula:- A + B C

23 A = coupon paid during such period; B = nominal value of Notes repaid during such period; C = proceeds from new additional Notes issued to refinance such amount allocated for A and B above; The DSCR is to be calculated every 30 June and 31 December by the REIT Manager, and shall be submitted to the Notes Trustee within forty five (45) days of the end of each half-yearly financial period. b) The Issuer will maintain the Security Cover Ratio ( SCR ) of at least 1.40 times at all times after the first issuance of the Notes. The SCR is defined as the market value of the Properties divided by the amount of the outstanding Notes and any new Notes to be issued; and c) QCT will maintain its gearing level in accordance to SC REIT Guidelines as amended or substituted from time to time. (xii) Trigger Events : The occurrence of any of the following events will constitute a Trigger Event:- (i) The Issuer fails to meet the Minimum Required Amount (after a grace period of three (3) business days) under the DSRA requirement. (ii) The date of the Expected Maturity of any MTN or the maturity date of any CP falls after the expiry of the Expected Tenure. (iii) The Issuer fails to redeem any of the MTN on the respective dates of the Expected Maturity. (iv) The Issuer fails to maintain a minimum DSCR as specified under paragraph 24(xi) herein (i.e. Financial Covenants ). (v) An event of default under the REIT Trustee Financing Agreement has occurred and such event of default is not capable of remedy or which, being capable of remedy, continues and is not remedied within a period of thirty (30) days after the REIT Trustee became aware or having notified in writing by the Issuer (acting upon the instruction of the Security Agent) of the event or situation or such other longer remedy period as may be allowed for the relevant event or situation as may be agreed between the Issuer(acting upon Page 23 of 25

24 the instruction of the Security Agent) and the REIT Trustee. Upon the occurrence of a Trigger Event, the Security Agent shall be entitled to declare that a Trigger Event has occurred, whereupon the Security Agent shall, whilst the Trigger Event is still subsisting have the discretion to proceed with the disposal of the Properties. The disposal process shall be managed by the Security Agent, under the rights conferred to the Security Agent pursuant to a Power of Attorney that is to be executed in favour of the Security Agent to sell the Properties. The disposal price shall be determined in accordance with a pre-agreed mechanism (i.e. with reference to a valuation by a valuer acceptable to the Security Agent) subject always to the REIT guidelines. The sale proceeds from the Properties disposal shall be deposited into the DSRA and shall be utilised for the redemption of outstanding CP/MTN in order of its ranking and thereafter any residual amount shall be returned to the REIT T rustee, as the security provider. Upon the declaration of a Trigger Event and during the period where the Trigger Event remains subsisting, there will be one percent (1.0%) per annum above the rate of interest payable on MTN chargeable on the amount unpaid from the relevant declaration date up to the date of actual payment or date of ceasing of the Trigger Event, calculated based on the actual number of days elapsed and a 365-day year. (xiii) Other Covenants : To be agreed between the Issuer and the Notes Trustee, but expected to include provisions standard to financing of this nature including but not limited to clauses such as the usual representation and warranties, conditions precedent, positive and negative covenants, etc. (xiv) Availability : Upon completion of documentation and, unless waived by the Lead Arranger, compliance of all conditions precedent and other applicable conditions to the satisfaction of the Lead Arranger. (xv) Adverse Market From the date of the provision of a formal offer until the first issue date of the Notes and for subsequent issuance of Notes, prior to the respective issuance dates, if there has been a change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which would render the issue as contemplated in the Transaction Document temporarily or permanently commercially impracticable or impossible and that such event materially and adversely affect the Issuer s ability to perform it s payment obligations under the Transaction Document, then the Lead Arranger acting Page 24 of 25

25 on the instruction of the investor(s), shall notify the Issuer and: a) whilst such circumstances exist, no issuance may be effected; b) that Lead Arranger/Facility Agent (acting on the instruction of the investor(s)) and the Issuer shall negotiate in good faith for an alternative basis mutually acceptable to the parties; and c) unless within thirty (30) days after the giving of such notice or such extended period as the parties may mutually agree in writing, such circumstances cease to exist or an alternative basis mutually acceptable to the parties hereto is arrived at, that investor s commitment in relation to the issue shall be cancelled whereupon the Issuer shall be obligated to forthwith upon demand refund to the investor(s) all monies released (if any) together with any other monies covenanted to be paid by the Issuer to the investor(s) under and in relation to the Transaction Documents. (xvi) Taxes : All payments in respect of the Notes will be made by the Issuer after deducting or withholding any amount for or on account of any present or future taxes or duties of whatsoever nature imposed or levied by the Government of Malaysia or any authority thereof or therein having power to tax and which are required by law to be deducted or withheld. The Issuer shall not be required to pay any additional amount in respect of any such deduction or withholding or payment of principal or coupon for or on account of any such taxed and duties. (xvii) Documentation : The terms and conditions of the Notes issue shall be set out in various agreements in form and substance acceptable to the Lead Arranger and the Issuer and shall include standard provisions relating to warranties and representations, positive and negative covenants, financial covenants, undertakings, mergers, acquisitions, cross default, force majeure and etc. (xviii) Governing Laws : Laws of Malaysia. Page 25 of 25