1 Background Information (a) Issuer (i) Name : PBFIN Berhad ( PBFIN ), a wholly-owned subsidiary of Public Bank Berhad ( PBB ) (ii) Address : Registered Office:- 27 th Floor, Menara Public Bank 146, Jalan Ampang 50450 Kuala Lumpur Malaysia (iii) Business Registration No. (iv) Date/Place of Incorporation (v) Date of Listing (in case of a public listed company) : 6471-U : 30 December 1965 / Malaysia : N/A (vi) Status : Resident controlled company Non-bumiputra controlled company (vii) Principal Activities (viii) Board of Directors : The principal activity of PBFIN will be to issue the Subordinated Notes (as defined under item 2(b) below) which will be stapled to the Capital Securities (as defined under item 2(b) below) to be issued by PBB under the Programme (as defined under item 2(b) below) and to on-lend the proceeds from the issuance of the Subordinated Notes to PBB. : The Board of Directors of PBFIN as at 11 March 2009 are as follows:- (i) Chan Kok Kwai; and (ii) Chew Han Kang. - 1 -
(ix) Structure of shareholdings and names of shareholders or, in the case of public company, names of all substantial shareholders (x) Authorised and paid up capital : The shareholder of PBFIN as at 11 March 2009 is as follows:- Name Direct Interest No. of ordinary shares held % PBB 2 100 : Authorised capital as at 11 March 2009 :- RM1,000,000,000 comprising 1,000,000,000 ordinary shares of RM1.00 each Paid-up capital as at 11 March 2009 :- RM2.00 comprising 2 ordinary shares of RM1.00 each 2 Principal Terms and Conditions (a) Names of the parties involved in the proposed transaction (where applicable) (i) Principal Advisers / Lead Arrangers : Public Investment Bank Berhad (Company No. 20027-W) ( PIVB ) (ii) Arranger(s) : Not applicable. (iii) Valuers : Not applicable. (iv) Solicitors : Messrs. Adnan Sundra & Low (v) Financial Adviser : Not applicable. (vi) Technical Adviser : Not applicable. (vii) Guarantor : Not applicable. (viii) Trustee : AmanahRaya Trustees Berhad (Company No. 766894-T) - 2 -
(ix) Facility Agent : PIVB (x) Primary Subscriber(s) and amount subscribed (where applicable) (xi) Underwriter(s) and amount underwritten (xii) Central Depository : The Primary Subscriber(s) (if any) shall be determined prior to each issuance of the Stapled Securities (as defined under item 2(b) below) in the event that the Stapled Securities are issued via a bought deal basis (where applicable). Not applicable for issuance via book building and direct placement. : PBB may consider appointing underwriters for each issuance of the Stapled Securities. The Securities Commission ( SC ) will be advised accordingly in the event PBB is able to secure any underwriting commitment. : Bank Negara Malaysia ( BNM ) (xiii) Paying Agent : BNM (xiv) Reporting Accountant : Not applicable. (xv) Others : Joint Lead Managers (i) PIVB; (ii) CIMB Investment Bank Berhad (Company No. 18417-M) ( CIMB ); and (iii) RHB Investment Bank Berhad (Company No. 19663-P) ( RHBIB ). PBB, at its discretion, may consider appointing additional joint lead manager(s) to assist in the issuance (by way of book-building and/or direct placement) of the Stapled Securities (as defined under item 2(b) below) under the Programme (as defined under item 2(b) below). The SC will be advised accordingly in the event PBB appoints additional joint lead manager(s). - 3 -
Market Makers (for retail tranche only) (i) CIMB; and (ii) RHBIB. The role of the Market Maker is : (i) to provide a two-way price quotation for the Stapled Securities (as defined under item 2(b) below); and (ii) to buy and sell the Stapled Securities based on the price quoted. Prior to the issuance of the Stapled Securities to retail investors, PBB and the Market Makers shall enter into agreements with regard to the market making arrangements. PBB, at its discretion, may consider appointing additional market maker(s). The SC will be advised accordingly in the event PBB appoints additional market maker(s). Tax Advisor KPMG Tax Services Sdn Bhd (Company No. 96860-M), appointed to provide an opinion to PBB on the tax implications of the Programme. Rating Agency RAM Rating Services Berhad (Company No. 763588-T) ( RAM Rating ) (b) Facility Description : A non-innovative Tier 1 stapled securities programme ( Programme ) established by PBB comprising the issuance of non-cumulative perpetual capital securities (Capital Securities ) by PBB that are stapled to the subordinated notes ( Subordinated Notes ) to be issued by PBFIN. (The Capital Securities and the Subordinated Notes shall collectively hereinafter be referred to as the Stapled Securities ). The Capital Securities will qualify as non- - 4 -
innovative Tier 1 capital of PBB for purposes of BNM s capital adequacy regulations. For the avoidance of doubt, at the point of issuance until the occurrence of an Assignment Event (as defined under item 2(x)(vi) below), the Capital Securities to be issued shall be stapled to the Subordinated Notes. Pursuant to the occurrence of an Assignment Event and upon the assignment of the Subordinated Notes to the Assignment Right Holder (as defined under item 2(x)(vii) below) under the Note Assignment (as defined under item 2(x)(v) below), the corresponding Capital Security ceases to be stapled to the Subordinated Note that is assigned. For the avoidance of doubt, the Subordinated Note does not cease to be stapled to the corresponding Capital Security which forms part of the Stapled Security in any other circumstances. Once un-stapled, the Subordinated Notes may not be assigned to any person other than the Assignment Right Holder. (c) Issue Size (RM) : Up to RM5.0 billion in nominal value. For avoidance of doubt, at any point in time up to RM5.0 billion in nominal value of Capital Securities stapled to the equivalent amount in nominal value of Subordinated Notes may be issued. (d) Issue Price (RM) : The Subordinated Notes shall be issued at par. (e) Tenor of the facility / issue : Tenor of Programme Perpetual, subject to cancellation by the Issuer or the Facility Agent in accordance with the terms and conditions of the Subordinated Notes. Availability Period for Utilisation The Programme shall be available for utilisation for a period of seven (7) years from the first issuance of the Stapled Securities. The first issuance of the Stapled Securities under the - 5 -
Programme will be made within two (2) years of SC approval of the Programme. Tenor of Issue Up to fifty (50) years from the issuance of each Subordinated Notes. (f) Interest / Coupon (%) : To be determined prior to each issuance of Subordinated Notes. (g) Interest / Coupon Payment Frequency (h) Interest / Coupon Payment Basis : Subject to the Interest Deferral Right (as defined under item 2(x)(i) below) and the Mandatory Interest Deferral (as defined under item 2(x)(ii), interest shall be payable quarterly or semiannually in arrears, to be determined prior to each issuance of Subordinated Notes. For the avoidance of doubt, the Capital Securities which are stapled to the Subordinated Notes shall have the same corresponding Distribution Date (as defined under item 2(g) of the Principal Terms and Conditions of Capital Securities under the Programme) and interest payment date respectively. : Actual number of days elapsed on a 365-day basis. (i) Yield to Maturity (%) : Each issuance of Subordinated Notes will be priced on the basis of yield to the first Optional Redemption Date (as defined under item 2(x)(iv) of the Principal Terms and Conditions of the Capital Securities) of the Capital Securities. The applicable yield for the Subordinated Notes will be determined prior to each issuance of the Subordinated Notes. (j) Security / Collateral (if any) : None. - 6 -
(k) Details of utilisation of proceeds : The proceeds from each issuance of the Subordinated Notes shall be on-lent to PBB pursuant to an inter-company subordinated loan ( Subordinated Loan ) based on terms and conditions similar to those for the Subordinated Notes, to finance the working capital, general banking and other corporate purposes of PBB. (l) Sinking Fund (if any) : Not applicable. (m) Rating - Credit Rating Assigned - Name of Rating Agency (n) Form and Denomination : The long term rating for the Subordinated Notes is AA 2 assigned by RAM Rating. : The Subordinated Notes shall be issued in bearer form in denominations of not less than RM1,000 each or such other denomination in accordance with the rules and regulations issued by BNM. The Subordinated Notes will be represented at all times by global certificates to be deposited with BNM and will be traded under the Real Time Electronic Transfer of Funds and Securities ( RENTAS ) System operated and maintained by BNM. The Subordinated Notes shall be issued in accordance with the Rules on the Fully Automated System for Issuing/Tendering ( FAST ) issued by BNM ( FAST Rules ). (o) Mode of Issue : The Subordinated Notes which are stapled to the Capital Securities, may be issued via private placement on a best efforts basis, or on a bought deal basis, or book building on a best efforts basis, with an information memorandum or a prospectus, as may be applicable, for the intended subscribers. - 7 -
(p) Selling Restriction : Subordinated Notes intended for Sophisticated Investors Selling Restriction at Issuance : The Subordinated Notes may not be offered, sold or transferred, directly or indirectly, nor may any document or other material in connection therewith be distributed in Malaysia other than to persons falling within Schedule 6 or Section 229(1)(b), Schedule 7 or Section 230(1)(b) and Schedule 9 or Section 257(3) of the Capital Markets and Services Act, 2007 ( CMSA ). Selling Restriction after Issuance : The Subordinated Notes may not be offered, sold or transferred, directly or indirectly, nor may any document or other material in connection therewith be distributed in Malaysia other than to persons falling within Schedule 6 or Section 229(1)(b) and Schedule 9 or Section 257(3) of the CMSA. Subordinated Notes intended for Retail Investors No selling restrictions. However, retail investors will not be able to trade their holdings of the Stapled Securities except with the Market Maker. The Market Maker will be able to trade its holdings of the Stapled Securities with any investor. For the avoidance of doubt, the Subordinated Notes may not be offered, sold or transferred, directly or indirectly on its own. The Subordinated Notes shall be offered, sold or transferred, directly or indirectly as part of the Stapled Securities being stapled to the Capital Securities. (q) Listing Status : The Subordinated Notes will not be listed on Bursa Malaysia Securities Berhad or on any other stock exchange. - 8 -
(r) Minimum Level of Subscription (RM or %) (s) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) : For issuance via book building, the minimum level of subscription for each issue of the Subordinated Notes which are stapled to the Capital Securities shall be 5% of the nominal value of each issue. For issuance via bought deal or private placement, the minimum level of subscription for each issue of Subordinated Notes which are stapled to the Capital Securities shall be 100% of the nominal value of each issue. In the event that any issue, offer or invitation is undersubscribed and does not meet the minimum level of subscription, the same shall be aborted and where applicable, any consideration received for the purpose of subscription shall be immediately returned to the respective subscribers/investors. : 1. Approval from BNM to PBB for the following :- (a) the establishment of the Programme; and (b) the classification of the Capital Securities issued from time to time under the Programme over the availability period of seven (7) years from the date of first issuance of the Capital Securities as non-innovative Tier 1 capital for the computation of the Risk Weighted Capital Adequacy Ratio ( RWCR ) of PBB and the PBB Group pursuant to the Risk Weighted Capital Adequacy Framework (General Requirements and Capital Components) issued by BNM on 20 September, 2007 (RWCA Framework). Application to BNM by PBB has been made vide a letter dated 3 March 2009 and the approval was obtained vide BNM s letter dated 16 March 2009. - 9 -
2. Approval from the SC for the following :- (a) the establishment of the Programme and the issuance of the Capital Securities by PBB and the issuance of the Subordinated Notes by PBFIN under the Programme; (b) (c) (d) the waiver from having to comply with paragraph 6.01 Other Regulatory Approvals of the PDS Guidelines to allow this submission for approval of the Stapled Securities prior to obtaining approval from BNM; the waiver from having to comply with certain provisions under the SC s Guidelines on the Minimum Contents Requirements for Trust Deeds in respect of the Stapled Securities; and the waiver from having to comply with paragraph 1.03 of Part III of the SC s Prospectus Guidelines. Application to the SC for (b), (c) and (d) above has been made vide a letter dated 27 February 2009 and the approval was obtained vide the SC s letter dated 16 March 2009. (t) Conditions Precedent : Conditions precedent shall include but not limited to the following:- (i) Certified true copies of the Issuer s Memorandum and Articles of Association, board resolution, Form 8 (Certificate of Incorporation), Form 13 (Certificate of Incorporation on Change of Name of Company), Form 24 (Return of Allotment of Shares), Form 44 (Notice of Situation of Registered Office) and Form 49 (Return Giving Particulars in Register of Directors, Managers and Secretaries and Changes of Particulars) have been furnished to the - 10 -
Facility Agent and the Trustee; (ii) Each of the transaction documents (as advised by the Solicitors) shall have been duly executed and stamped where applicable; (iii) Written approval from BNM to PBB for the following:- (a) the establishment of the Programme; and (b) the classification of the Capital Securities Notes issued from time to time under the Programme over the availability period of seven (7) years from the date of first issuance of the Capital Securities as non-innovative Tier 1 capital for the computation of the RWCR of PBB and the PBB Group; (iv) Written approval from the SC for the establishment of the Programme and the issuance of the Capital Securities by PBB and the issuance of the Subordinated Notes by PBFIN; (v) A legal opinion from the Solicitors addressed to the Principal Adviser/Lead Arranger advising with respect to, inter-alia, the validity, legality and enforceability of the Stapled Securities and the transaction documents, and a written confirmation from the Solicitors to the Principal Adviser/Lead Arranger that all conditions precedent have been fulfilled; (vi) Evidence that the Subordinated Notes under the Programme have been assigned a minimum long-term rating of AA 2 by RAM Rating; and (vii) Such other conditions precedent as may be advised by the Solicitors for the Principal Adviser/Lead Arranger (if any). - 11 -
(u) Representations and Warranties : Representations and warranties shall include but not limited to the following: - (i) The Issuer is a company duly incorporated and validly existing under the laws of Malaysia; (ii) The Issuer has the power to enter into, exercise its rights and perform its obligations under the transaction documents; (iii) 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 agreement to which it is a party; (iv) The Issuer has all licences, franchises, permits, authorisations, approvals, orders and other concessions of and from all governmental and regulatory officials and bodies that are necessary to own or lease its properties and conduct its business, other than where the failure to obtain such licences, franchises, permits, authorisations, approvals, orders and other concessions would not have a material adverse effect on the ability of the Issuer to comply with its obligations under the transaction documents; (v) The transaction documents create valid and binding obligations which are enforceable on and against the Issuer; (vi) All necessary actions, authorisations and consents required under the transaction documents have been taken, fulfilled and obtained and remain in full force and effect; (vii) that no Enforcement Event (as defined in item 2(x)(xi) below) has occurred; (viii) The audited accounts of the Issuer are prepared in accordance with generally accepted accounting principles and standards and give a true and fair view of the financial - 12 -
condition of the Issuer; (ix) No litigation or arbitration is current or, to the Issuer s knowledge, is threatened, which if adversely determined would have a material adverse effect on the ability of the Issuer to comply with its obligations under the transaction documents; (x) The financial statements and other information supplied in respect of the financial statements are true and accurate in all material aspects and not misleading; (xi) No step has been taken by the Issuer, its creditors or its shareholder or any other person on its behalf, nor have any legal proceedings or applications been started, under Section 176 of the Companies Act, 1965; (xii) There has been no change in the business or condition (financial or otherwise) of the Issuer since the date of its last audited financial statements which might have a material adverse effect on the ability of the Issuer to comply with its obligations under the transaction documents; and (xiii) Such other representations and warranties as may be advised by the Solicitors for the Principal Adviser/Lead Arranger (if any). (v) Events of Default : There are no events of default under the Subordinated Notes. Please refer to item 2(x)(xi) below for Enforcement Events. (w) Principal terms and conditions for warrants (where applicable) : Not applicable. - 13 -
(x) Other principal terms and conditions for the issue x(i) x(ii) Interest Deferral Right Mandatory Interest Deferral : PBFIN may, at its option, defer the payment of interest on any interest payment date (other than the maturity date of the relevant Subordinated Notes). Any such deferral will not constitute or be deemed a default by PBFIN for any purpose whatsoever. : If the following events exist: (a) on the fifteenth (15 th ) business day prior to an interest payment date of the Subordinated Loan; and (b) continues to be met on (and including) such interest payment date of the Subordinated Loan or payment of interest on such interest payment date of the Subordinated Loan would result in the following event existing, PBFIN will correspondingly defer the payment of all interest payable under the relevant Subordinated Notes on such interest payment date: (i) PBB is in breach of BNM s minimum capital adequacy ratio requirements as applicable to PBB; or (ii) If PBB would, immediately after an interest payment date of the Subordinated Loan, be in breach of BNM s minimum capital adequacy ratio requirements applicable to PBB as a result of the payment of interest on that interest payment date of the Subordinated Loan. Any such deferral will not constitute or be deemed a default by PBFIN for any purpose whatsoever. - 14 -
x(iii) Payment of Deferred Interest : Deferred interest amounts will be payable on the next interest payment date, subject to the Interest Deferral Right and the Mandatory Interest Deferral at that time. All deferred interest amounts will be due and payable no later than the maturity date of the relevant Subordinated Notes. No interest will accrue on any deferred interest amount. x(iv) Dividend and Capital Stopper : In the event that any amount of interest has been deferred on an interest payment date, an Assignment Event will be triggered and until such deferred interest amount has been paid in full, PBB may not: (1) Pay any dividend to ordinary shareholders of PBB or make any interest payment or distribution on any securities or instruments ranking pari passu with or junior to the Subordinated Loan/Capital Securities; and (2) Redeem, purchase, reduce or otherwise acquire any of its ordinary shares, preference shares or other securities or instruments ranking pari passu with or junior to the Subordinated Loan/Capital Securities, or any of its subsidiary undertakings benefiting from a guarantee from PBB, ranking, as to the right of repayment of principal, or the case of any such guarantee, as to the right of payment of sums under such guarantee, pari passu with or junior to the Subordinated Loan/Capital Securities. x(v) Note Assignment : In respect of each issue of the Subordinated Notes, if an Assignment Event occurs: (1) all amounts which become due and payable in respect of each issue of Subordinated Notes after the occurrence of an Assignment Event ( Assignment Event Date ) (including any previously deferred interest amounts and whether or not relating to the interest periods - 15 -
prior to the Assignment Event Date) will be payable to the Assignment Right Holder; (2) all rights, title and interests of the relevant Subordinated Note holders are automatically assigned and transferred to the Assignment Right Holder on the Assignment Event Date; and (3) the Assignment Right Holder may at its option redeem the Subordinated Notes accordingly. Each Subordinated Note holder irrevocably appoints the Assignment Right Holder to be the agent of the Subordinated Note holder to do all such acts and things (including signing all documents or transfers) as may in the opinion of the Assignment Right Holder be necessary or desirable to be done in order to record or perfect the transfer of the Subordinated Notes from the Subordinated Note holder to the Assignment Right Holder under the Note Assignment. Such acts and things shall include the execution and delivery of irrevocable standing instructions by each Subordinated Note holder to its Authorised Depository Institution ( ADI ) to effect the transfer of the Subordinated Notes to the Assignment Right Holder and the delivery by the Subordinated Note holder of a copy of such instruction to the Assignment Right Holder and the Issuer. x(vi) Assignment Events : An assignment event means the occurrence of any of the following events: (i) the Assignment Right Holder in its absolute discretion elects that an Assignment Event occurs; or (ii) BNM in its absolute discretion determines that a Note Assignment should occur; or (iii) the redemption of the Capital Securities by PBB pursuant to a Tax Redemption (as defined under item 2(x)(v) in the Principal - 16 -
Terms and Conditions of the Capital Securities under the Programme) or a Regulatory Redemption (as defined under item 2(x)(vi) in the Principal Terms and Conditions of the Capital Securities under the Programme) or a Optional Redemption (as defined under item 2(x)(iii) in the Principal Terms and Conditions of the Capital Securities under the Programme); or (iv) the deferral of any interest on the Subordinated Notes in accordance with the Interest Deferral Right and the Mandatory Interest Deferral; or (v) PBB is in breach of BNM s minimum capital adequacy ratio requirements applicable to PBB; or (vi) commencement of a Winding-Up Proceeding (as defined in item 2(x)(xi) below) in respect of PBFIN or PBB; or (vii) appointment of an administrator in connection with a restructuring or similar arrangements of PBB or all or substantially all of its properties; or (viii) an Enforcement Event under the terms of the Subordinated Notes; or (ix) the occurrence of an Optional Redemption Date (as defined under item 2(x)(iv) in the Principal Terms and Conditions of the Capital Securities under the Programme); or (x) PBFIN ceases to be, directly or indirectly, a wholly-owned subsidiary of PBB. x(vii) Assignment Right Holder : PBB. - 17 -
x(viii) Issuer Redemption : Following the occurrence of an Assignment Event, PBFIN may give a redemption notice to the Assignment Right Holder causing redemption of all Subordinated Notes at the Redemption Amount (as defined below), on any interest payment date. Similarly, following the occurrence of an Assignment Event, PBB may at its option redeem the Subordinated Loan from PBFIN. Redemption Amount means 100% of the face value of the Subordinated Notes together with accrued but unpaid interest (if any) under the Subordinated Notes. x(ix) Stapling : Transfer Restriction Each Capital Security will be stapled to a Subordinated Note. Each Subordinated Note and Capital Security together will constitute a Stapled Security. Until an Assignment Event occurs and the Subordinated Notes have been transferred to the Assignment Right Holder, the Subordinated Notes cannot be transferred without the Capital Securities also being transferred to the same transferee. Unstapling Pursuant to the occurrence of an Assignment Event and upon the assignment of the Subordinated Notes to the Assignment Right Holder under the Note Assignment, the corresponding Capital Security ceases to be stapled to the Subordinated Note that is assigned. For the avoidance of doubt, the Subordinated Note does not cease to be stapled to the corresponding Capital Security which forms part of the Stapled Security in any other circumstances. Once un-stapled, the Subordinated Notes may not be assigned to any person other than the Assignment Right Holder. - 18 -
x(x) x(xi) Note Assignment Agreement Enforcement Events : Investors will subscribe for the Stapled Securities by paying PBB the consideration equal to the principal amount of the Capital Securities. PBB will then enter into a note assignment agreement ( Note Assignment Agreement ) with such investors pursuant to which: (i) PBB pays such investor upfront (in an amount equal to the principal amount for the Capital Securities purchased by such investors) for the right to require the assignment of the Subordinated Notes to PBB (as Assignment Right Holder) upon an Assignment Event, whereby upon an Assignment Event, the Subordinated Notes will be automatically transferred to PBB. (ii) Such investors apply this upfront amount to subscribe for the relevant amount of Subordinated Notes from PBFIN, at par. (iii) Such investors shall execute and deliver irrevocable standing instructions to their respective ADIs to effect the transfer of the Subordinated Notes to the Assignment Right Holder and deliver a copy of such instruction to the Assignment Right Holder and the Issuer. Upon occurrence of any of the following events (each an Enforcement Event ) in respect of a tranche of the Subordinated Notes: (a) a default made in the payment of any nominal value of the relevant Subordinated Notes on the due date for payment thereof; or (b) a default made in the payment of interest on the relevant Subordinated Notes on the due date for payment thereof, which default continues for fourteen (14) days consecutively (other than the non-payment of interest as provided under the Interest - 19 -
Deferral Right or the Mandatory Interest Deferral); the Subordinated Note holders of such tranche may, at their discretion and without further notice, institute Winding-Up Proceedings (as defined below) against PBFIN in Malaysia (but not elsewhere) provided that, such holders shall have no right to accelerate payment of such Subordinated Notes in the case of such default in payment of interest on, or other amounts owing under, such Subordinated Notes or a default in the performance of any other covenant of PBFIN. If a Winding-Up Proceeding commences in respect of PBFIN, or an effective resolution of the shareholders of PBFIN is passed for a Winding- Up Proceeding in respect of PBFIN, the Subordinated Note holders may, at such holders option, declare the principal of and any interest amounts on the Subordinated Notes to be due and payable immediately, by a notice in writing to PBFIN. Upon such a declaration, such nominal value and any interest amounts shall become immediately due and payable. Winding-Up Proceeding means the occurrence of any of the following: (a) a court or agency or supervisory authority in Malaysia having jurisdiction in respect thereof shall have instituted a proceeding or entered a decree or order for the appointment of a receiver or liquidator in any insolvency, rehabilitation, readjustment of debt, marshalling of assets and liabilities, or similar arrangements involving PBFIN or all or substantially all of its properties, or for the winding-up of or liquidation of its affairs and such proceedings, decree or order shall not have been vacated or shall have remained in force, undischarged or unstayed for a period of sixty (60) days; or (b) PBFIN files a petition to take advantage of - 20 -
any insolvency statute. x(xii) Ranking : The Subordinated Notes constitute direct and unsecured obligations of PBFIN. The principal, interest and any other amounts payable on the Subordinated Notes will be subordinated in right of payment upon the occurrence of any Winding-Up Proceeding, to the prior payment in full of all liabilities of PBFIN (including liabilities of all offices and branches of PBFIN wherever located and any debt securities (whether subordinated or unsubordinated) of PBFIN that rank senior to the Subordinated Notes) except, in each case, to those liabilities which by their terms rank equal with or junior to the Subordinated Notes. Claims in respect of the Subordinated Notes will rank pari passu and without preference among themselves and with the most junior class of preference shares (if any) of PBFIN, but in priority to the rights and claims of holders of the ordinary equity shares of PBFIN. x(xiii) Guarantee The Subordinated Notes will not be secured or covered by a guarantee of PBFIN or any related entity of PBFIN, including PBB, or any other arrangement that legally or economically enhances the seniority of the claims of the Subordinated Note holders. x(xiv) Withholding taxes All payments in respect of the Subordinated Notes by or on behalf of PBFIN shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or government charges of whatever nature imposed or levied by or on behalf of the relevant jurisdiction, unless the withholding or deduction of the taxes is required by law. In the event such taxes are imposed, PBFIN will not have to pay additional amounts ( Additional Amounts ) as may be necessary in order that the - 21 -
net amounts received by the Subordinated Note holders after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Subordinated Notes in the absence of the withholding or deduction. x(xv) Voting Rights The Subordinated Note holders will not be entitled to receive notice of or attend or vote at a meeting of the ordinary shareholder of PBFIN or to participate in the management of PBFIN. x(xvi) Amendments to the Conditions Amendments to the terms and conditions of the Subordinated Notes shall only be made with the prior written approval of BNM, the SC and the Subordinated Note holders. x(xvii) Governing Laws The laws of Malaysia. THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK - 22 -