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Cypark Ref IMTN Sukuk RM550 Million - Other Terms and Conditions

IM Insights
By IM Insights
3 years ago
Cypark Ref IMTN Sukuk RM550 Million - Other Terms and Conditions

Murabahah, Shariah, Sukuk, Tawarruq


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  1. CYPARK REF SDN BHD (COMPANY NO. 1287000-T) AN ISLAMIC MEDIUM TERM NOTES ("SRI SUKUK MURABAHAH") PROGRAMME OF UP TO RM550.0 MILLION IN NOMINAL VALUE UNDER THE SHARIAH PRINCIPLE OF MURABAHAH (VIA TAWARRUQ ARRANGEMENT) ("SRI SUKUK MURABAHAH PROGRAMME") BASED ON THE SECURITIES COMMISSION MALAYSIA ("SC")'S SUSTAINABLE AND RESPONSIBLE INVESTMENT ("SRI") SUKUK FRAMEWORK. Other terms and conditions (i) (ii) Identified assets Purchase and selling price/rental (where applicable) : Shariah-compliant commodities (excluding ribawi items in the category of medium of exchange such as currency, gold and silver) available at Bursa Suq al-Sila' or such other independent commodity broker as approved by its Shariah adviser which will be identified on or prior to the time of issuance of the SRI Sukuk Murabahah ("Commodities"). : The "Commodity Purchase Price" shall be equivalent to the proceeds of the SRI Sukuk Murabahah based on the issue price of the relevant SRI Sukuk Murabahah and shall comply with the asset pricing requirement stipulated under the LOLA Guidelines. The "Deferred Sale Price" shall be equivalent to the Commodity Purchase Price of the relevant SRI Sukuk Murabahah plus the Profit Margin (as defined below) which shall be payable on a deferred payment basis and the Deferred Sale Price will be determined prior to the sale of the Commodities to the Issuer prior to each issuance of the SRI Sukuk Murabahah. "Profit Margin" is defined as: (i) In the case of SRI Sukuk Murabahah issued at discount, the aggregate Periodic Profit Payments plus the Discounted Amount; (ii) In the case of SRI Sukuk Murabahah issued at par, the aggregate Periodic Profit Payments; and (iii) In the case of SRI Sukuk Murabahah issued at a premium, the aggregate Periodic Profit Payments less the Premium Amount (as defined below), provided that for the purposes of calculating the aggregate of the Periodic Profit Payments in determining the Deferred Sale Price in respect of the SRI Sukuk Murabahah which are issued on floating rate basis, the Periodic Payment Rate shall be based on the Ceiling Profit Rate. "Discounted Amount" means in the case of SRI Sukuk
  2. Murabahah issued at a discount , the difference between the nominal value and the issue proceeds of the relevant SRI Sukuk Murabahah. "Premium Amount" means in the case of the SRI Sukuk Murabahah issued at premium, the difference between the issue proceeds and the nominal value of the relevant SRI Sukuk Murabahah. (iii) Profit/coupon/rental rate (fixed or floating) : The periodic payment rate per annum (if applicable) ("Periodic Payment Rate") for each Series of the SRI Sukuk Murabahah, either on a fixed rate basis or floating rate basis, shall be determined prior to each issuance of the SRI Sukuk Murabahah and agreed between the Issuer and the LM. In respect of the SRI Sukuk Murabahah issued on a floating rate basis, the Periodic Payment Rate shall be a credit spread (%) per annum above the Kuala Lumpur Interbank Offered Rate ("KLIBOR") or such other reference benchmark to be agreed between the Issuer and the LM at the point of issuance and expressed as a rate in per cent. per annum ("Effective Rate"), for the purposes of calculating the Periodic Profit Payments on each Periodic Payment Date. The Effective Rate may vary based on the movement of the relevant reference rate provided always that it shall not exceed the Ceiling Profit Rate. "Ceiling Profit Rate" is a rate to be mutually agreed between the Issuer and the LM for the purposes of calculating the aggregate Periodic Profit Payments in determining the Deferred Sale Price in respect of the SRI Sukuk Murabahah which are issued on floating rate basis. The Periodic Profit Payment is the profit payable on any relevant Periodic Payment Date (as defined below), is calculated at the Periodic Payment Rate on the nominal value of the relevant Series of the SRI Sukuk Murabahah for the relevant Periodic Payment Period (as defined in the (Profit/coupon/rental payment basis) paragraph below) based on the Periodic Payment Basis (as defined in the (Profit/coupon/rental payment basis) paragraph below). "Periodic Payment Date" means the last day of each Periodic Payment Period. In the event the Periodic Payment Rate exceeds the Ceiling Profit Rate, the Issuer shall be obligated to pay the Periodic Profit Payment at the Ceiling Profit Rate only. For avoidance of doubt, for the purpose of computation of the Deferred Sale Price, the Periodic Profit Payments shall be calculated based on the Ceiling Profit Rate. If the Effective Rate is higher than the Ceiling Profit Rate, the Issuer shall be obliged 2
  3. to make Periodic Profit Payment at the Ceiling Profit Rate only . (iv) Profit coupon/rental payment frequency : Periodic Profit Payments shall be payable either six (6) months in arrears or such other frequency as may be agreed between the Issuer and the LM which shall be determined upfront by the Issuer in the issue request and provided that no periodic profit payment frequency shall extend beyond the tenure of the SRI Sukuk Murabahah Programme ("Periodic Payment Period"). (v) Profit/coupon/rental payment basis : The Periodic Profit Payment will be calculated on actual/365 days basis ("Periodic Payment Basis"). (vi) Details on utilisation of proceeds by Issuer : The proceeds raised from the SRI Sukuk Murabahah shall be utilised for the following Shariah-compliant purposes only: (a) to part finance the costs and expenses associated with the design, engineering, procurement, construction, commissioning, ownership, operation and maintenance of the Eligible SRI Projects ("Development Costs"); (b) to part finance any other Eligible SRI Project-related costs, including consultancy fees, Takaful contributions/insurance premium, lease payments and contingencies; (c) to refinance the financing facility procured and obtained to fund the Development Costs; (d) to finance the Periodic Profit Payments falling due and payable under the SRI Sukuk Murabahah up to six (6) months after the Scheduled Commercial Operation Date (as defined under the relevant PPA (as defined in the (Project Companies' Material Project Documents) paragraph of the section entitled (Other Terms and Conditions)))) of all the Eligible SRI Projects; (e) to pre-fund the Initial Minimum Required Balance (as defined in the (Details of designated account(s)) paragraph of the section entitled (Other Terms and Conditions)) via subscription of the Islamic debt securities in respect of the Proposed Subscriptions (as defined below); and (f) to finance fees and expenses relating to the SRI Sukuk Murabahah and issuance of the Islamic debt securities and/or Shariah-compliant preference shares in respect of the Proposed Subscriptions. The Eligible SRI Projects are renewable energy projects (solar), included as one of the sectors in Clause 7.04(b)(i) of Chapter 7 3
  4. Sustainable and responsible Investment (SRI) Sukuk in Part 3 Corporate Bonds and Sukuk of the LOLA Guidelines. "Proposed Subscriptions" means the subscription of the Islamic debt securities and/or Shariah-compliant preference shares to be issued by the respective Project Companies to the Issuer for the Eligible SRI Projects. (vii) Listing status and types of listing, where applicable : The SRI Sukuk Murabahah will not be listed on Bursa Malaysia Securities Berhad or any other stock exchange. (viii) Status : The SRI Sukuk Murabahah shall constitute direct, unconditional, unsubordinated and secured obligations of the Issuer and shall at all times rank pari passu, without discrimination, preference or priority amongst themselves and at least pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer, subject to those preferred by law and the Transaction Documents. (ix) Form and Denomination : The SRI Sukuk Murabahah shall be issued in accordance with: (a) the Participation and Operation Rules for Payments and Securities Services issued by Paynet ("Paynet Rules"); and (b) the Operational Procedures for Securities Services issued by Paynet, as amended or replaced from time to time ("Paynet Procedures") (collectively, "Paynet Rules and Procedures"). Form The SRI Sukuk Murabahah shall be represented by a global certificate to be deposited with BNM and may be exchanged for definitive bearer form only in certain limited circumstances. Denomination The denomination of the SRI Sukuk Murabahah shall be RM1,000 or in multiples of RM1,000 at the time of issuance or, subject to PayNet Rules and Procedures, such other denominations as may be agreed between the Issuer and the Facility Agent. (x) Issue Tenure : Each SRI Sukuk Murabahah shall have a tenure of more than one (1) year and up to twenty-two (22) years from the date of the issuance, as the Issuer may elect, provided that all the SRI Sukuk Murabahah shall mature prior to the expiry of the SRI Sukuk Murabahah Programme. 4
  5. (xi) Material Adverse Effect A material adverse effect or a material adverse change to: (a) the business, operations, property, condition (financial or otherwise) or prospects of the Issuer and/or any Project Company; or (b) the ability of the Issuer and/or any Project Company to perform any of its obligations under any of the Issuer's Material Project Documents, the Project Companies' Material Project Documents or the Transaction Documents to which it is a party; (c) the legality, validity, binding effect or enforceability of the Issuer's Material Project Documents, the Project Companies' Material Project Documents or the Transaction Documents or the rights or the remedies of the parties under the Issuer's Material Project Documents, the Project Companies' Material Project Documents or the Transaction Documents; (d) the effectiveness or the priority of ranking of any Security Interest granted or purporting to be granted pursuant to any Transaction Document; or (e) the rights or remedies of the Sukuk Trustee, the Security Agent or the Sukukholders under the Transaction Documents. (xii) Power Plant : The solar photovoltaic energy generating facilities in relation to the Eligible SRI Project. (xiii) P Eligible SRI Projects : Collectively the following: (a) the financing, design, engineering, procurement, construction, installation, testing, commissioning, ownership, operation and maintenance of the solar photovoltaic energy generating facility with the capacity of 30MWAC and such associated facilities located at Kelinchi, Kuala Pilah, Negeri Sembilan to be undertaken by Cove Suria Sdn Bhd (Company No. 1261137-M) ("Project (CSSB)"); (b) the financing, design, engineering, procurement, construction, installation, testing, commissioning, ownership, operation and maintenance of the solar photovoltaic energy generating facility with the capacity of 30MWAC and such associated facilities located at Sik, Kedah to be undertaken by Viva Solar Sdn Bhd (Company No. 1262059-M) ("Project (VSSB)"); and 5
  6. (c) the financing, design, engineering, procurement, construction, installation, testing, commissioning, ownership, operation and maintenance of the solar photovoltaic energy generating facility with the capacity of 30MWAC and such associated facilities located at Terip, Negeri Sembilan to be undertaken by Cypark Estuary Solar Sdn Bhd (Company No. 1261058-T) ("Project (CESSB)"), each an "Eligible SRI Project". (xiv) Project Companies : (a) Cove Suria Sdn Bhd (Company No. 1261137-M); (b) Viva Solar Sdn Bhd (Company No. 1262059-M); and (c) Cypark Estuary Solar Sdn Bhd (Company No. 1261058T), each a "Project Company". (xv) Transaction Documents : The Transaction Documents in respect of the SRI Sukuk Murabahah Programme shall include the following documents: (a) the Programme Agreement; (b) the Trust Deed; (c) (d) the Security Documents; the Securities Lodgement Form; (e) the relevant Islamic transaction documents as may be advised by the Solicitors and the Shariah Adviser; and (f) all other documents of whatsoever nature executed or to be executed in connection with or pursuant to any of the above documents or otherwise in connection with the SRI Sukuk Murabahah Programme and the SRI Sukuk Murabahah, including any supplemental document(s) thereof, and references to a "Transaction Document" shall mean each or any one of them. (xvi) Total Loss : The total loss or destruction of, or damage to the whole (and not part only) of the Power Plant or any event or occurrence that renders the whole (and not part only) of the Power Plant permanently unfit for any economic use and the repair or remedial work in respect thereof is wholly uneconomical. (xvii) Issuer's Material Project Documents : The agreements, which constitute essential contracts for the construction, operation and maintenance of the Eligible SRI 6
  7. Project , including but not limited to the following: (a) engineering, procurement and construction contract(s) made or to be made between the Issuer and the respective Project Companies ("Turnkey Contracts"); (b) engineering, procurement and construction contract(s) made or to be made between the Issuer and CRE ("EPC Contracts"); (c) conditional construction contract(s) made or to be made between the Issuer and the respective Project Companies (" Project Companies' Conditional Construction Contracts"); (d) conditional construction contract(s) made or to be made between the Issuer and CRE; (e) all performance and/or maintenance bonds in respect of the Eligible SRI Project and all other guarantees, advance payment bonds and other forms of payment or performance security issued in favour of the Issuer pursuant to the relevant EPC Contracts; and (f) any other agreement and/or document entered into or to be entered into by the Issuer that is pertinent to the Eligible SRI Project, and include any amendments, variations and/or supplemental made or entered into from time to time and references to "Issuer's Material Project Document" mean each or any one of them. (xviii) Project Companies' Material Project Documents : The agreements, which constitute essential contracts for the construction, operation and maintenance of the Eligible SRI Project, including but not limited to the following: (a) power purchase agreement(s) made or to be made between each of the Project Companies and Tenaga Nasional Berhad ("PPA"); (b) lease and/or sub-lease agreement(s) entered into or to be entered into by each of the Project Companies; (c) SPP License; (d) Turnkey Contracts; (e) Project Companies' Conditional Construction Contracts; (f) operation and maintenance agreement(s) entered into or to be entered into by the respective Project Companies ("O&M Agreements"); 7
  8. (g) all performance and/or maintenance bonds in respect of the Eligible SRI Project and all other guarantees, advance payment bonds and other forms of payment or performance security issued in favour of any Project Company pursuant to the respective Turnkey Contracts; and (h) any other agreement and/or document that is pertinent to the Eligible SRI Project, and include any amendments, variations and/or supplemental made or entered into from time to time and references to "Project Company's Material Project Document" mean each or any one of them. (xix) P Project Completion : In respect of the relevant Eligible SRI Project, the date on which the following conditions have been satisfied: (a) the completion certificates under the relevant Turnkey Contract and the relevant EPC Contract have been issued and accepted by the ITA; (b) all the conditions precedent to initial operations and to commercial operations, as set forth in the relevant PPA in respect to the relevant Eligible SRI Project have been satisfied as acknowledged by Tenaga Nasional Berhad; and (c) such other conditions as may be required by the PA/LA in relation to the SRI Sukuk Murabahah Programme and/or as advised by the Solicitors or the ITA. (xx) SPP License : The licence to be issued pursuant to section 9 of the Electricity Supply Act 1990 more particularly described in the PPA and the Transaction Documents. (xxi) Equity : (i) Ordinary equity; and (ii) shareholder loans including convertible loans and/or convertible bonds. (xxii) Equity BG : An unconditional, irrevocable and on demand bank guarantee(s) (or similar financial instrument issued by a financial institution, including without limitation a standby letter(s) of credit) of up to RM80,000,000 procured by CRB for the benefit of the Issuer from an Islamic financial institution with a minimum long-term rating of AA3/AA- that is licenced by Bank Negara Malaysia to conduct business in Malaysia. (xxiii) Drawing of Equity BG : The Equity BG shall provide for no recourse to the Issuer. The Security Agent shall have the right to draw on the outstanding nominal value of the Equity BG: (a) if CRB fails to inject cash equity into the DA to cover any 8
  9. shortfall in total Equity Contribution in respect of the total project costs of the Eligible SRI Projects as indicated in the base case financial model of the Issuer ; (b) upon occurrence of an Event of Default; (c) if CRB fails to renew the Equity BG within twenty (20) business days prior to the expiry of the Equity BG; (d) if the rating of the issuing bank of the Equity BG is downgraded by two (2) or less notches from the SRI Sukuk Murabahah Programme's rating and CRB fails to replace the existing Equity BG with a new Equity BG from an Islamic financial institution with a minimum longterm rating of AA3/AA- that is licenced by Bank Negara Malaysia to conduct business in Malaysia within forty-five (45) days from the date of the rating downgrade; or (e) if the rating of the issuing bank of the Equity BG is downgraded by more than two (2) notches from the SRI Sukuk Murabahah Programme’s rating. (xxiv) sEquity Contribution : All Equity contributions and commitments made directly or indirectly by CRE and/or CRB for the Eligible SRI Projects. (xxv) : The Sukuk Trustee (on behalf of the Issuer) shall open and maintain a Shariah-compliant TRA with an Islamic bank to be appointed by the Issuer which is acceptable to the Sukuk Trustee with a sum of RM30,000. Sukuk Trustee's Reimbursement Account for Sukukholders' Actions ("TRA") The TRA shall be operated by the Sukuk Trustee and the monies shall only be used strictly by the Sukuk Trustee in carrying out its duties in relation to the occurrence of an Event of Default or enforcement events in the manner as provided in the Trust Deed. This sum of money shall be maintained in the TRA at all times throughout the tenure of the SRI Sukuk Murabahah Programme. The monies in the TRA may be invested in Islamic based account, Shariah-compliant instruments or Shariah-compliant securities in the manner prescribed in the Trust Deed, with any income from such investment to be accrued to the Issuer. These monies shall be returned to the Issuer upon full redemption of the SRI Sukuk Murabahah if no Event of Default or enforcement takes place under the SRI Sukuk Murabahah Programme. (xxvi) Taxation : All payments by the Issuer shall be made without withholding or deductions for or on account of any present or future tax, duty or charge of whatsoever nature imposed or levied by or on behalf of Malaysia or any other applicable jurisdictions, or any authority thereof or therein having power to tax, unless such withholding or deduction is required by law, in which event the Issuer shall 9
  10. be required to make such additional amount so that the payee would receive the full amount which the payee would have received if no such withholding or deductions are made . (xxvii) No Payment of Interest : (xxviii) Redemption : Unless previously redeemed, purchased and cancelled, all SRI Sukuk Murabahah then outstanding will be redeemed by the Issuer at 100% of their nominal value on their respective maturity date(s). (xxix) Jurisdiction : The Issuer shall unconditionally and irrevocably submit to the exclusive jurisdiction of the courts of Malaysia. (xxx) : The designated accounts shall be Shariah-compliant. Details of the designated account(s) For the avoidance of doubt and notwithstanding any other provision to the contrary herein contained, it is agreed and declared that nothing in this PTC and the Transaction Documents shall oblige or entitle any party nor shall any party pay or receive or recover interest on any amount due or payable to another party pursuant to the principal terms and conditions or the transaction documents and the parties hereby expressly waive and reject any entitlement to recover such interest. Name of account Disbursement Account ("DA") Opened/To be opened by Issuer Maintained/Operated or to be maintained/operated by Party responsible for maintaining the account: Issuer Party responsible for operating the account: Security Agent Signatories to the Account Security Agent Sources of funds The following shall be deposited or cause to be deposited into the DA: (i) all balance proceeds from the issuance of the SRI Sukuk Murabahah after deducting: (a) 10 all fees, expenses and all other amounts in connection with the SRI Sukuk Murabahah accrued prior to the
  11. issuance of SRI Sukuk Murabahah ; (ii) 11 (b) such part of the Development Costs and any other Eligible SRI Project-related costs incurred and paid by the Issuer or its shareholders prior to the issuance of SRI Sukuk Murabahah which shall be reimbursed to the Issuer or its shareholders, as the case may be, subject to the receipt of documentary evidence, such as (.1) billing or claims in relation to the Eligible SRI Project as approved and certified by the ITA appointed for that Eligible SRI Project and/or such other certification or documentary evidence as provided by the Issuer and (.2) the receipts evidencing such payment has been made by the Issuer or its shareholders; and (c) such part of the proceeds from the issuance of the SRI Sukuk Murabahah for purpose of refinancing the financing facility procured and obtained by the Issuer to fund the Development Costs which shall be paid directly to the existing financier(s); and all equity injection (including the proceeds from the Equity BG) and/or inter-company loan, financing or advances by CRB, CRE and/or other shareholder(s) of the Issuer;
  12. and (iii) all monies transferred from the accounts of the Issuer upon closure of such accounts in accordance of the terms of the Transaction Documents. Utilisation of Funds Amounts standing to the credit of the DA may only be used subject to terms and conditions to be agreed upon between the Issuer and the LA which include the following: (i) payments for the Development Costs and any other Eligible SRI Project-related costs prior to Project Completion; (ii) for transfers to the Issuer’s OA (as defined below) for payment of taxes and duties; (iii) for annual transfers to the Issuer's OA in accordance with the approved Budget for payment of administrative expenses, recurring fees (save and except for fees due and payable to the Facility Agent, Security Agent and/or paying agent, which are to be remitted directly to the account as directed by the Facility Agent) and any other payment obligations in connection with the Issuer's Material Project Document; (iv) payments and/or reimbursement to the Issuer or its shareholders for part financing the Development Costs, any other Eligible SRI Project-related costs, taxes and duties; (v) 12 payments of the Periodic Profit Payments falling due and payable under the SRI Sukuk Murabahah prior to Project Completion;
  13. (vi) payments of the subscription price in respect of the Proposed Subscriptions in such amount equivalent to the Initial Minimum Required Balance to be deposited into the relevant Project Company's FSRA (as defined below); (vii) payment of all fees and expenses in relation to the SRI Sukuk Murabahah and issuance of the Islamic debt securities and Shariahcompliant preference shares in respect of the Proposed Subscriptions; (viii) payment of RM30,000 to be deposited into the TRA; and (ix) such withdrawal(s) to invest in the Permitted Investments provided that (a) such monies utilised for Permitted Investments shall be remitted back into the DA at least three (3) business days prior to the date on which the Issuer's payment obligations under the Transaction Documents becoming due and payable; (b) such Permitted Investments shall be denominated in Ringgit Malaysia; and (c) no Event of Default has occurred and is continuing. The DA shall be closed upon Project Completion of all the Eligible SRI Projects and any unutilised funds in the DA shall be transferred to the Revenue Account. Name of account Revenue Account ("RA") Opened/To be opened by Issuer Maintained/Operated Party responsible for maintaining 13
  14. or to be maintained /operated by the account: Issuer Party responsible for operating the account: Security Agent Signatories to the Account Security Agent Sources of funds The following shall be deposited or cause to be deposited into the Revenue Account: (i) all payments received under the Issuer's Material Project Documents after the Project Completion which shall be transferred from the relevant Project Companies' CA (as defined below)' and the relevant Cash Deposit Account; (ii) any excess unutilised funds transferred from the DA upon closure of the DA; (iii) proceeds of Takaful/insurance claims received by the Issuer; (iv) any claims received by the Issuer in respect of third party performance bonds, liquidated damages or any other compensation received; and (v) Utilisation of Funds 14 all other receipts or incomes of the Issuer (such amounts to include but not limited, where relevant, any proceeds or income of Permitted Investments made by utilising the monies in the Cash Deposit Accounts). Unless an Event of Default has occurred and is continuing, credit balances in the RA shall be utilised by the Issuer for application in accordance with the priority application of cash flow ("RA Cashflows Priority") as follows:
  15. (i) for transfers to the Issuer’s OA for payment of taxes and duties; (ii) for monthly transfers to the Issuer's OA in accordance with the approved Budget for payment of administrative expenses, recurring fees (save and except for fees due and payable to the Facility Agent, Security Agent and/or paying agent, which are to be remitted directly to the account as directed by the Facility Agent) and any other payment obligations in connection with the SRI Sukuk Murabahah and the Issuer's Material Project Documents; (iii) for payment of Periodic Profit Payments falling due and payable under the SRI Sukuk Murabahah; (iv) for payment of all principal obligations under the SRI Sukuk Murabahah; (v) for payment of principal and profit, fees, costs and expenses related to Permitted Indebtedness and the issuance of Shariah-compliant preference shares in respect of the Proposed Subscriptions; and (vi) for payment of dividends and/or permitted distributions or payments to the Issuer's shareholder, subject to all Restricted Conditions having been met; and (vii) such withdrawal(s) to invest in the Permitted Investments provided that (a) such monies utilised for Permitted Investments shall be remitted back into the RA at least three (3) business days prior to the 15
  16. date on which the Issuer 's payment obligations under the Transaction Documents becoming due and payable; (b) such Permitted Investments shall be denominated in Ringgit Malaysia; and (c) no Event of Default has occurred and is continuing. In the event the balance in the RA is insufficient to make payment in full of any amount required on such date pursuant to paragraphs (i) to (v) of the RA Priority Cashflows, the Issuer shall immediately notify the Sukuk Trustee, the Facility Agent and/or the Security Agent of such insufficiency. Name of Account Issuer Operating Account ("Issuer's OA") Opened/to be opened Issuer by Maintain/operate or to Party responsible for maintaining be maintained the account: by/operated by Issuer Party responsible for operating the account prior to the occurrence of an Event of Default: Issuer Party responsible for operating the account upon the occurrence of an Event of Default: Security Agent Signatories account to the Prior to the occurrence of an Event of Default: Issuer Upon the occurrence of an Event of Default: Security Agent Sources of funds 16 All amounts which are transferable from the DA and/or RA into the Issuer's OA in accordance with the approved Budget.
  17. Utilisation of funds The credit balances in the Issuer 's OA shall be utilised by the Issuer in the following order of priority: (i) for application towards taxes, duties, administrative expenses, recurring fees and any other payment obligations in connection with the SRI Sukuk Murabahah and the Issuer's Material Project Documents, in accordance with the approved Budget; and (ii) such withdrawal(s) to invest in the Permitted Investments provided that (a) such monies utilised for Permitted Investments shall be remitted back into the Issuer's OA at least three (3) business days prior to the date on which the Issuer's payment obligations under the Transaction Documents becoming due and payable; (b) such Permitted Investments shall be denominated in Ringgit Malaysia; and (c) no Event of Default has occurred and is continuing. Prior written consent of the Sukuk Trustee (acting on the instructions of the Sukukholders) shall be obtained in the event the actual expenses (save for taxes and duties) incurred by the Issuer exceeds or would exceed by more than 5% of the amount specified for the corresponding period in the base case financial model. 17
  18. Name of Account Opened /to Opened by Three Cash Deposit Accounts (one account for each Eligible SRI Project), which shall be Shariah-compliant (collectively, the "Cash Deposit Accounts" and each a "Cash Deposit Account") be Issuer Maintain/operate or Party responsible for to be maintained maintaining the account: Issuer by/operated by Party responsible for operating the account: Security Agent Signatories to the Security Agent account Sources of funds The Issuer shall cause the relevant Project Company to deposit into the relevant Cash Deposit Account, prior to or on Project Completion, an amount which is equivalent to the Initial Minimum Required Balance which shall be withdrawn from the relevant Project Company's FSRA. The Issuer shall, at all times, maintain an amount not less than the Initial Minimum Required Balance in the relevant Cash Deposit Account. In the event of shortfall, the Issuer shall cause the relevant Project Company to deposit an amount sufficient to maintain the Initial Minimum Required Balance into the relevant Cash Deposit Account within 21 days from the date of such shortfall which shall be withdrawn from the relevant Project Company's FSRA. 18
  19. Utilisation of funds Unless an Event of Default has occurred , the monies standing to the credit of the relevant Cash Deposit Account shall be utilised in the following order of priority: (i) in the event there is insufficient funds in the relevant Project Company's CA and the FSRA to meet the relevant Project Company's payment obligations under the relevant Turnkey Contract, such withdrawal(s) of an amount equivalent to the shortfall amount to be transferred into the 'RA; (ii) such withdrawal(s) to invest in the Permitted Investments provided that (a) such monies utilised for Permitted Investments shall be remitted back into that Cash Deposit Account at least three (3) business days prior to the date on which any of the relevant Project Company's payment obligations under the relevant Turnkey Contract becoming due and payable; (b) such Permitted Investments shall be denominated in Ringgit Malaysia; and (c) no Event of Default has occurred and is continuing. Name of Account Opened/to Opened by Finance Service Reserve Account which shall be Shariahcompliant ("FSRA") be Each Project Company Maintain/operate or Party responsible for to be maintained maintaining the account: The relevant Project Company by/operated by Party responsible for operating the account: 19
  20. Security Agent Signatories to the Security Agent account Sources of funds The relevant Project Company shall deposit and maintain or cause to be deposited in the FSRA , prior to or on Project Completion, an amount which is equivalent to the Initial Minimum Required Balance. The Project Company shall, at all times, maintain an amount not less than the then prevailing Minimum Required Balance (as defined below) in the FSRA (after taking into account the balance in the corresponding Cash Deposit Account designated for that Project Company). In the event of shortfall, the Project Company shall deposit an amount sufficient to maintain the then prevailing Minimum Required Balance (after taking into account the balance in the corresponding Cash Deposit Account designated for that Project Company) into the FSRA within 21 days from the date of such shortfall. "Initial Minimum Required Balance" means RM8,000,000. "Minimum Required Balance" means, at any time, an amount equivalent to the Project Company's next six (6) months deferred payment obligations under the relevant Turnkey Contract. Utilisation of funds 20 The monies standing to the credit of the FSRA shall be
  21. utilised in the following order of priority : (i) on or after the Initial Minimum Required Balance has been deposited into the FSRA, such withdrawal(s) of an amount equivalent to the Initial Minimum Required Balance to be transferred into the corresponding Cash Deposit Account designated for that Project Company, towards payment of cash deposit by the relevant Project Company to the Issuer pursuant to the relevant Turnkey Contract; (ii) in the event there is insufficient funds in the relevant Project Company's CA to meet the relevant Project Company's payment obligations under the relevant Turnkey Contract, such withdrawal(s) of an amount equivalent to the shortfall amount to be transferred into the relevant Project Company's CA; (iii) such withdrawal(s) of an amount to be transferred into the corresponding Cash Deposit Account designated for that Project Company to maintain the Initial Minimum Required Balance; and (iv) such withdrawal(s) to invest in the Permitted Investments provided that (a) such monies utilised for Permitted Investments shall be remitted back into the FSRA at least three (3) business days prior to the 21
  22. date on which any payment obligations under the relevant Turnkey Contract becoming due and payable ; and (b) such Permitted Investments shall be denominated in Ringgit Malaysia. Any excess amounts (for the avoidance of doubt, such amounts to include, where relevant, any proceeds realized from the Permitted Investments) exceeding the aggregate of the then prevailing Minimum Required Balance in the FSRA for any relevant period (after taking into account the balance in the corresponding Cash Deposit Account designated for that Project Company), may be credited into the relevant Project Company's CA. 22
  23. Collection Account ("CA") Name of Account Opened/to Opened by be Project Company Maintain/operate or Party responsible for to be maintained maintaining the account: Project Company by/operated by Party responsible for operating the account: Security Agent Signatories to the Security Agent account Sources of funds The relevant Project Company shall deposit and maintain or cause to be deposited in the CA, the following: (i) all proceeds derived under the relevant Project Companies' Material Project Documents, including proceeds from the relevant PPA; (ii) proceeds of Takaful/insurance claims received by the Project Company except any third party liability or similar insurance proceeds which are payable directly to third parties; and (iii) any claims received by the Project Company in respect of third party performance bonds, liquidated damages or any other compensation received; (iv) any amounts released from the FSRA; and (v) Utilisation of funds 23 all other cash received by the Project Company. The credit balances in the CA
  24. shall be utilised by the relevant Project Company for application in accordance with the priority application of cash flow as follows : (i) for payments due and payable under the relevant Turnkey Contracts and the relevant Project Companies' Conditional Construction Contracts to the Issuer; (ii) to top up the shortfall to maintain the Minimum Required Balance in the FSRA, as required; (iii) for transfers to the relevant Project Company’s OA (as defined below) for payment of taxes and duties; (iv) for monthly transfers to the relevant Project Company's OA in accordance with the approved annual budget of the relevant Project Company (presented on a monthly format) for payment of operating and maintenance expenditures, and any other payment obligations under the relevant Project Companies' Material Project Documents; (v) in respect of proceeds from Takaful/insurance claims received by the relevant Project Company, such proceeds to be utilised to rebuild, repair or restore the affected portion of the plant or to reimburse the relevant Project Company for the rebuilding/ repair/ restoration costs which have been paid by the relevant Project Company 24
  25. prior to the Takaful /insurance claims, save for any proceeds from third party liability and workers' compensation Takaful/insurance (if any) which shall be utilized for payment of the relevant claim; (vi) in respect of performance bonds/ guarantees, liquidated damages or any other compensation received by the relevant Project Company from third party, such proceeds to be applied in payment to the relevant third party of any damages or compensation payable by the relevant Project Company to such third party; (vii) for payment of permitted distributions or payments to the holder(s) of Islamic debt securities issued by the relevant Project Company, subject to all relevant distribution covenants having been met; (viii) for payment of permitted distributions or payments to the holder(s) of any Shariah-compliant preference shares issued by the relevant Project Company, subject to all relevant distribution covenants having been met; (ix) for payment of dividend and/or permitted distributions or payments to the ordinary shareholder(s) of the relevant Project Company, subject to all relevant distribution covenants having been 25
  26. met ; and (x) such withdrawal(s) to invest in the Permitted Investments provided that (a) such monies utilised for Permitted Investments shall be remitted back into the CA at least three (3) business days prior to the date on which any payment obligations under the relevant Turnkey Contract becoming due and payable; and (b) such Permitted Investments shall be denominated in Ringgit Malaysia. Name of Account Opened/to Opened by Project Company Operating Account ("Project Company's OA") be Project Company responsible Maintain/operate or Party maintaining the account: to be maintained Project Company by/operated by for Party responsible for operating the account prior to the occurrence of an Event of Default: Project Company Party responsible for operating the account upon the occurrence of an Event of Default: Security Agent Signatories to the Prior to the occurrence of an Event of Default: account Project Company Upon the occurrence of an Event of Default: Security Agent Sources of funds 26 All amounts which are
  27. transferable from the Project Company 's Collection Account into the Project Company's OA in accordance with the approved operating budget of the relevant Project Company. Utilisation of funds The credit balances in the Project Company's OA shall be utilised by the relevant Project Company in the following order of priority: (i) for application towards operating and maintenance costs, taxes, duties, capital expenditure (recurring or otherwise) and any other payment obligations under the relevant Project Companies' Material Project Documents; and (ii) such withdrawal(s) to invest in the Permitted Investments provided that (a) such monies utilised for Permitted Investments shall be remitted back into the Project Company's OA at least three (3) business days prior to the date on which any payment obligations under the relevant Turnkey Contract becoming due and payable; and (b) such Permitted Investments shall be denominated in Ringgit Malaysia. Prior written consent of the Sukuk Trustee (acting on the instructions of the Sukukholders) shall be obtained in the event the actual expenses (save for taxes and duties) incurred by the relevant Project Company exceeds or would exceed by more than 5% of the amount specified for the corresponding period in the base case financial 27
  28. model . (xxxi) Other Conditions (xxxii) Conditions Subsequent : The SRI Sukuk Murabahah shall at all times be governed by the guidelines issued and to be issued from time to time by the SC, and/or BNM having jurisdiction over matters pertaining to the SRI Sukuk Murabahah. (1) Prior to the initial operation date of the relevant Eligible SRI Project, the Issuer shall provide to the Sukuk Trustee and Security Agent certified true copies of the SPP License in respect of the relevant Eligible SRI Project and documentary evidence confirming that all conditions as set out in the relevant SPP License have been complied with within the timeframe allowed under the that SPP License; (2) The Issuer shall deliver to the Sukuk Trustee and Security Agent a written confirmation issued by the IIA confirming that the agreed operational phase Takaful/insurances covers for the Eligible SRI Projects have been duly executed prior to the COD of the Eligible SRI Projects; (3) Within sixty (60) days following the first (1st) issuance of the SRI Sukuk Murabahah or such other period as may be agreed between the Issuer and the Sukuk Trustee as stipulated in the Transaction Documents, the Issuer shall deliver to the Lead Arranger and the Security Agent: (i) the relevant acknowledgements received from the respective counterparties in respect of the relevant notices of assignment under the relevant Security Documents issued by the Issuer and each of the Project Companies; and (ii) a certified true copy of the planning permission(s) issued by the relevant authority in respect of the Project (VSSB); (4) Within fourteen (14) days following the first (1st) issuance of the SRI Sukuk Murabahah or such other period as may be agreed between the Issuer and the Sukuk Trustee as stipulated in the Transaction Documents, the Issuer shall close all accounts other than the designated accounts and TRA; (5) No later than 31 March 2020, the Issuer shall deliver to the Sukuk Trustee, the Facility Agent and the Security Agent: (i) a certified true copy of (1) the temporary license 28
  29. or written consent issued by the relevant land authority for Cove Suria Sdn Bhd to commence work on the CSSB IF Land pending conversion of category of land use ; or (2) the written confirmation from the relevant land authority confirming that conversion of the category of land use in respect of the CSSB IF Land is not necessary for the purposes of the Project (CSSB); (6) (ii) a certified true copy of (1) the temporary license or written consent issued by the relevant land authority for Viva Solar Sdn Bhd to commence work on the Site 2 (VSSB) pending conversion of category of land use; or (2) the written confirmation from the relevant land authority confirming that conversion of the category of land use in respect of the Site 2 (VSSB) is not necessary for the purposes of the Project (VSSB); (iii) documentary evidence that the application for the conversion of the category of land use in respect of any of the land in relation to the Eligible SRI Projects (if required) has been submitted to the relevant authority; and (iv) a certified true copy of shared facilities agreement made between (1) Cypark Estuary Solar Sdn Bhd; and (2) Cove Suria Sdn Bhd, in relation to the sharing of the SPP Interconnection Facility and TNB Interconnection Facility constructed and operated by Cove Suria Sdn Bhd on the CSSB IF Land for the Project (CSSB) and the Project (CESSB); No later than 31 May 2021, the Issuer shall deliver to the Sukuk Trustee, the Facility Agent and the Security Agent: (i) documentary evidence that: (a) the lease contemplated under the Lease Agreement 1 (VSSB); and (b) the first ranking charge pursuant to the National Land Code 1965 over the lease contemplated under the lease agreement made between (1) the then registered proprietor of the Site 2 (VSSB) or its attorney; and (2) Viva Solar Sdn Bhd, have been presented for registration at the 29
  30. relevant land office ; (ii) in relation to the CSSB IF Land: (a) if Cove Suria Sdn Bhd exercises the option to convert the tenancy contemplated under the tenancy agreement ("Tenancy Agreement (CSSB IF Land)") made between (1) Cove Suria Sdn Bhd; and (2) the then registered proprietor of the CSSB IF Land ("CSSB IF Land Owner") into a lease, to the extent permitted by law and/or the relevant land authority, documentary evidence that: (A) the lease contemplated under the Tenancy Agreement (CSSB IF Land); and (B) the first ranking charge pursuant to the National Land Code 1965 over the lease contemplated under the Tenancy Agreement (CSSB IF Land), have been presented for registration at the relevant land office; or (b) 30 if Cove Suria Sdn Bhd exercises the option to acquire the CSSB IF Land: (A) a certified true copy of the sale and purchase agreement ("SPA") made between (1) Cove Suria Sdn Bhd as the purchaser; and (2) the CSSB IF Land Owner as the vendor; (B) documentary evidence that the memorandum of transfer in relation to the transaction contemplated under the SPA has been presented for registration at the relevant land office; and (C) to the extent permitted by law and/or the relevant land authority, documentary evidence that the first ranking charge pursuant to the National Land Code 1965 over the CSSB IF Land has been presented for registration at the relevant land office; and
  31. (7) (xxxiii) Shariah principles : Such other conditions as may be required by the PA/LA or LM in relation to the SRI Sukuk Murabahah Programme and/or as advised by the Solicitors. In addition to "Shariah principles" paragraph of the section entitled "Details of Facility/Programme": Murabahah (Cost-Plus Sale) - A contract that refers to the sale and purchase of assets whereby the cost and profit margin (mark-up) are made known. Tawarruq (Tripartite Sale) - Purchasing a Commodity on a deferred price and then selling it to a third party for cash. (xxxiv) Credit Rating Notwithstanding the "Credit rating(s) of facility/programme, if applicable" paragraph of the section entitled "Details of Facility/Programme", it is intended that the SRI Sukuk Murabahah under the SRI Sukuk Murabahah Programme may be rated and/or unrated provided that: (i) in the case of the unrated SRI Sukuk Murabahah, the aggregate nominal value shall not exceed RM550.0 million; and (ii) in the case of the rated SRI Sukuk Murabahah: (a) the aggregate nominal value (taking into account the nominal value of any matured rated SRI Sukuk Murabahah) shall not exceed RM550.0 million; and (b) each issuance of the SRI Sukuk Murabahah shall be accorded with a rating of at least AA3 with stable outlook or equivalent by the Rating Agency prior to the issuance of the relevant SRI Sukuk Murabahah. The rating shall be assigned by such credit rating agency appointed or to be appointed by Issuer at that time. The rated SRI Sukuk Murabahah issued under the SRI Sukuk Murabahah Programme cannot be refinanced by subsequent issuance(s) of unrated SRI Sukuk Murabahah and/or subsequent issuance(s) of rated SRI Sukuk Murabahah. 31