Tanjung Pinang Development IMTN Sukuk RM1.5 Billion - Other Terms and Conditions

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1. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") Other terms and conditions a. Tenure of Murabahah the Sukuk More than 1 year and up to 25 years, as may be determined by the Issuer prior to each issuance, provided that the tenure of the Sukuk Murabahah shall not extend beyond the tenure of the Sukuk Murabahah Programme. b. Availability Period of First Tranche The Sukuk Murabahah under the First Tranche is available for issuance upon completion of documentation and fulfilment of all conditions precedent to the satisfaction of the JLAs (unless waived by the JLAs) up to forty two (42) months from the date of the first issuance of the Sukuk Murabahah under the First Tranche (“First Availability Period”). c. Details on Utilisation Proceeds by Issuer The proceeds raised from the issuance of Sukuk Murabahah under the Sukuk Murabahah Programme shall be utilised by the Issuer for the following purposes which shall be Shariah-compliant:- of 1) To refinance existing financing or borrowings of the Issuer and/or its subsidiaries; To part finance land reclamation, infrastructure and development costs in respect of projects undertaken by the Issuer and/or its subsidiaries; To finance conversion premium of land(s) owned by the Issuer and/or its subsidiaries; To repay amounts due to the Issuer’s and/or its subsidiaries’ related companies and/or to reimburse the Issuer’s and/or its subsidiaries’ related companies for amounts disbursed or advanced by such companies in relation to land reclamation cost of projects undertaken by the Issuer and/or its subsidiaries; To finance working capital requirements in relation to projects undertaken by the Issuer and/or its subsidiaries and/or other requirements related to the business activities of the Issuer and/or its subsidiaries; and/or To defray fees, costs and expenses in relation to the issue of the Sukuk Murabahah and the Sukuk Murabahah Programme. 2) 3) 4) 5) 6) First Tranche The proceeds raised from the issuance of Sukuk Murabahah belonging to the First Tranche shall be utilised by the Issuer for the following purposes which shall be Shariah-compliant: No 1 Item To fully repay the Existing Facilities 2 To part finance the 1 Nominal Value Up to RM750,000,000
2. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") remaining reclamation STP2A cost land of To part finance the remaining cost of Infrastructure Work and development costs of STP2A 3 To part finance the reclamation cost of STP2B and STP2C 4 To repay amount due to related companies of the Issuer in relation to the land reclamation cost of the development of STP2A (“Repayment of Amount Owing”) 5 To finance the conversion premium from leasehold to freehold status in relation to the Pledged Lands 6 Up to RM250,000,000 Up to RM170,000,000 Up to RM180,000,000 Notes: (1) The combined limit for items 1 to 6 above shall not exceed RM1,300,000,000 in nominal value at any point in time. (2) Proceeds of up to RM350,000,000 shall be earmarked for items 5 and 6 above only. (3) Any unutilised amount for item 6 above can only be utilised for other items above (subject to the respective sub-limits) upon completion of the conversion of the STP2A land from leasehold to freehold status. For avoidance of doubt, any unutilised amount for item 6 shall not be available for utilisation under item 5. (4) Reclamation costs shall include building of rock revetment wall, construction of sand bund, dredging works, installation of sheet pile, dumping/pumping of sand and shore protection works. For the avoidance of doubt, this refers to the reclamation costs of STP2A, STP2B and STP2C. (5) Proceeds raised from the issuance of Sukuk Murabahah belonging to the First Tranche shall first be utilised towards item 1 above. Thereafter, such issuance proceeds may only be utilised towards items 2, 3, 4, 5 and 6 upon fulfilment of the conditions subsequent applicable for the First 2
3. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") Tranche. d. First Tranche Issue Size The first tranche (“First Tranche”) of Sukuk Murabahah under the Sukuk Murabahah Programme will have an aggregate nominal value of up to RM1,300,000,000 and the Sukuk Murabahah belonging to the First Tranche will be issued in one or more Series. The aggregate nominal value of the outstanding Sukuk Murabahah belonging to the First Tranche shall, by reason of progressive redemption of each Series belonging to the First Tranche, be reduced by such amount and at such times as set out in the table below: Month from the date of first issuance of the first Series under the First Tranche 48 54 60 66 72 78 84 Reduction in Outstanding Nominal Value (RM Mil) Outstanding Nominal Value (RM Mil) 130 130 130 195 195 260 260 1,170 1,040 910 715 520 260 - The tenure of each Series under the First Tranche shall be subject to the following order of maturity dates: Aggregate Nominal Value of Sukuk issued under the First Tranche (RM Mil) Up to RM130 130 < x ≤ 260 260 < x ≤ 390 390 < x ≤ 585 585 < x ≤ 780 780 < x ≤ 1,040 1,040 < x ≤ 1,300 The “Commodities” means 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 acceptable to the Shariah Adviser which will be identified on or prior to the time of issuance of the Sukuk Murabahah. e. Identified Assets f. Purchase price/rental applicable) and Maturity Date (Month from the date of first issuance of the First Tranche) 48 54 60 66 72 78 84 selling (where The “Purchase Price” shall be equivalent to the proceeds raised from the issuance of the Sukuk Murabahah based on the issue price of the relevant Sukuk Murabahah and shall comply with the asset 3
4. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") pricing requirement Guidelines. stipulated under the LOLA The “Deferred Sale Price” shall be equivalent to the Purchase Price of the relevant Sukuk Murabahah plus the aggregate Periodic Profit Payments of the Sukuk Murabahah, 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 Purchaser prior to each issuance of the Sukuk Murabahah. g. Profit rate/ Profit payment frequency / Profit payment basis Periodic Profit Rate For Sukuk Murabahah with Periodic Profit Payments, the profit rate (“Periodic Profit Rate”) for the Sukuk Murabahah will be determined prior to each issuance of the Sukuk Murabahah based on either a fixed or floating profit rate. The profit rate shall not be applicable for Sukuk Murabahah without Periodic Profit Payments. Profit Payment Frequency For Sukuk Murabahah with Periodic Profit Payments, the Periodic Profit Payments shall be payable on a quarterly basis or at such other frequency to be determined prior to each issuance of the Sukuk Murabahah (each a “Periodic Profit Payment Date”). Profit Payment Basis For Sukuk Murabahah with Periodic Profit Payments, the periodic profit payment basis shall be on actual number of days based on 365-day basis. For the avoidance of doubt, for the purpose of computation of the Deferred Sale Price for any Sukuk Murabahah issued on floating profit rate basis, the Periodic Profit Payments shall be calculated based on the agreed ceiling profit rate. If the effective profit rate is higher than the ceiling profit rate, the Issuer shall be obliged to make Periodic Profit Payments at the agreed ceiling profit rate only. In relation to each Series of Sukuk Murabahah (“Future Series”) issued under the First Tranche subsequent to the issuance of the first Series belonging to the First Tranche (“First Issued Series”, and the expression shall, in the case where the First Issued Series has been redeemed and cancelled, mean such Sukuk Murabahah whose Issue Date is immediately after that of the Sukuk Murabahah belonging to the First Issued Series and remaining outstanding), the first Periodic Profit Payment Date in respect of such Future Series shall coincide with the Periodic Profit Payment Date in respect of Sukuk 4
5. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") Murabahah belonging to the First Issued Series immediately following the issuance of each Future Series. Thereafter, the Periodic Profit Payment period of the Future Series shall be coterminous with the Periodic Profit Payment period for the First Issued Series. h. Mode of Issue In addition to the section entitled “Mode of Issue”: Each Series may be issued via private placement or direct placement on a best efforts basis, or on a bought deal basis, or book building or book running on a best efforts basis. Issuance of the Sukuk Murabahah shall be in accordance with: (i) the Operational Procedures for Securities Services issued by PayNet; and (ii) the Participation and Operation Rules for Payments and Securities Services issued by PayNet, (collectively, “PayNet Rules and Procedures”) as amended or substituted from time to time, subject to such variation, amendments or exemptions (if any) from time to time. i. Selling restrictions In addition to the section entitled “Selling restrictions”: Each Sukuk Murabahah is tradable and transferable subject to the following selling restrictions: (i) Selling restrictions at issuance The Sukuk Murabahah may only be offered, sold, transferred or otherwise disposed directly or indirectly, to a person to whom an offer for subscription or purchase of, or invitation to subscribe for or purchase of the Sukuk Murabahah and to whom the Sukuk Murabahah are issued would fall within: (ii) (a) Part 1 of Schedule 6 (or Section 229(1)(b)) and Part 1 of Schedule 7 (or Section 230(1)(b)); read together with Schedule 9 (or Section 257(3)), of the CMSA as amended from time to time; and (b) Section 2(6) of the Companies Act. Selling restrictions after issuance The Sukuk Murabahah may only be offered, sold, transferred or otherwise disposed directly or indirectly, to a person to whom an offer for 5
6. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") subscription or purchase of, or invitation to subscribe for or purchase of the Sukuk Murabahah and to whom the Sukuk Murabahah are issued would fall within: (a) Part 1 of Schedule 6 (or Section 229(1)(b)); read together with Schedule 9 (or Section 257(3)), of the CMSA as amended from time to time; and (b) Section 2(6) of the Companies Act; PROVIDED THAT in the case of Sukuk Murabahah belonging to the First Tranche such person shall be a bank licensed under the Financial Services Act 2013 or the Islamic Financial Services Act 2013, as the case may be. j. Form and denomination Form The Sukuk Murabahah shall be issued in accordance with PayNet Rules and Procedures. Each issuance of Sukuk Murabahah shall be represented by a global certificate to be deposited with BNM, and is exchangeable for definitive certificates only in certain limited circumstances. Denomination The denomination of the Sukuk Murabahah shall be in RM1,000,000.00 or in multiples of RM1,000.00 or if required, such other denominations to be mutually agreed by the Issuer and the JLMs as may be allowed under the PayNet Rules and Procedures and/or any other procedures/guidelines issued by the relevant authorities at the time of issuance. k. Listing status The Sukuk Murabahah will not be listed on Bursa Securities or any other stock exchanges. l. The Sukuk Murabahah shall be issued at par to nominal value, and the issue price shall be determined prior to the issuance. Issue price The issue price shall be calculated in accordance with the PayNet Rules and Procedures. m. Redemption on maturity Unless previously redeemed, purchased or cancelled, all outstanding Sukuk Murabahah shall be redeemed at its nominal value with accrued Periodic Profit Payments due on the respective maturity dates. n. Status In respect of Sukuk Murabahah which are secured The Sukuk Murabahah secured by the Secured Assets 6
7. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") shall, pursuant to the relevant Transaction Documents, constitute direct, secured, unconditional and unsubordinated obligations of the Issuer. Each Tranche is secured by different assets and therefore will not rank pari passu with each other. Each Tranche shall at all times rank at least pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer, subject to those preferred by law or the Transaction Documents. The Sukuk Murabahah issued under a Tranche and secured by the Secured Assets pursuant to the Tranche Security for that Tranche shall rank pari passu without any preference or priority among themselves unless otherwise provided under the Transaction Documents. In respect of Sukuk Murabahah which are unsecured The Sukuk Murabahah which are unsecured, pursuant to the relevant Transaction Documents, shall constitute direct, unsecured, unconditional and unsubordinated obligations of the Issuer. The Sukuk Murabahah which are unsecured shall rank pari passu without any preference or priority among themselves unless otherwise provided under the transaction documents or those preferred by law and at least pari passu with all other present or future unsecured, unconditional and unsubordinated obligations of the Issuer. The payment obligations of the Guarantor under the Kafalah constitute direct, unconditional, unsecured and unsubordinated obligations of the Guarantor and shall at all times rank pari passu without discrimination, preference or priority amongst themselves and pari passu with all other present and future unconditional, unsecured and unsubordinated obligations of the Guarantor, subject to those preferred by law. o. Transaction Documents The issuance of the Sukuk Murabahah under the Sukuk Murabahah Programme shall be subject to the negotiation and execution of documentation satisfactory to all parties incorporating clauses customary for transactions of this nature as advised by the Solicitors and agreed by the Issuer. Such documentation shall include the following: (i) Programme Agreement; (ii) trust deed in respect of the Sukuk Murabahah Programme (“Trust Deed”); (iii) Securities Lodgement Form for Central Securities Depository and Paying Agency 7
8. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") Services; (iv) Corporate Guarantee; (v) the relevant Islamic transaction documents; (vi) Security documents constituting Tranche Security (“Security Documents”) (if applicable); (vii) Subscription Agreement(s); (viii) Pricing Supplement(s); and (ix) Any other documentation relating to the issue, offer or invitation in respect of the Sukuk Murabahah, which may be advised by the Solicitors and mutually agreed by the Issuer and the JLAs. All the documents and agreements referred to above are collectively referred to as the “Transaction Documents”. p. Taxation All payments by the Issuer shall be made subject to 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 the Malaysia, or any authority thereof or therein having power to tax unless such withholding or deduction is required by law. In the event that such withholding or deduction is required by law, the Issuer shall be obliged to gross up for such withholdings or deductions. For the avoidance of doubt, the Issuer’s obligation to gross up does not apply to tax on the general income of the Sukukholder(s). q. No Set-Off Subject to applicable law, no Sukukholder may exercise, claim or plead any right of set-off, deduction, withholding or retention in respect of any amount owed to it by the Issuer in respect of, or arising under or in connection with the Sukuk Murabahah, and each Sukukholder shall, by virtue of its holding of any Sukuk Murabahah, be deemed to have waived all such rights of set-off, deduction, withholding or retention against the Issuer. Notwithstanding the above, if any of the amounts due and payable to any Sukukholder by the Issuer in respect of, or arising under or in connection with the Sukuk Murabahah is discharged by set-off, such Sukukholder shall, subject to applicable law, immediately pay an amount equal to the amount of such discharge to the Issuer (or, in the event of its windingup or administration, the liquidator or as appropriate, administrator of the Issuer) and, until such time as payment is made, shall hold such amount in trust for the Issuer (or the liquidator or as appropriate, administrator 8
9. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") of the Issuer) and accordingly any such discharge shall be deemed not to have taken place. r. Costs and expenses s. Jurisdiction All costs and expenses including legal fees, out-ofpocket expenses and reasonable expenses incurred in connection with the Sukuk Murabahah Programme shall be for the account of the Issuer or be reimbursable by the Issuer. The Issuer shall unconditionally and irrevocably submit to the non-exclusive jurisdiction of the courts of Malaysia. t. Sukuk Trustee’s Reimbursement Account for Sukukholders’ Actions The Issuer shall set up or procure the setting up of a Shariah-compliant account designated as “Sukuk Trustees’ Reimbursement Account for Sukukholders’ Actions” (the “Sukuk Trustees’ Reimbursement Account”) with a sum of RM30,000.00 deposited therein (which shall be maintained at all times throughout the tenure of the Sukuk Murabahah Programme). The Sukuk Trustees’ Reimbursement Account shall be operated solely by the Sukuk Trustee and the money shall only be used strictly by the Sukuk Trustee in carrying out its duties in relation to the occurrence of an Event of Default which are provided in the Trust Deed. u. Other conditions The Sukuk Murabahah Programme shall at all times be governed by the guidelines issued and to be issued from time to time by the SC, BNM and/or other relevant authority in Malaysia having jurisdiction over matters pertaining to the Sukuk Murabahah Programme. v. Specific covenants In respect of each Tranche that is secured by Tranche Security, that Tranche may be subject to additional specific covenants as stated in the Pricing Supplement of that Tranche and in the relevant Transaction Documents for that Tranche. In respect of the First Tranche, the following specific covenants shall apply:(a) The Issuer shall cause all advances, if any, made by its shareholders to be subordinated to the Sukuk Murabahah belonging to the First Tranche and no repayment and/ or prepayment of such advances shall be made save for the Repayment of Amount Owing from the proceeds of the issuance of Sukuk Murabahah belonging to the First Tranche. (b) The Issuer shall submit to the Sukuk Trustee and the Security Agent on a quarterly basis a budget outlining its forecasted operating costs, expenses and capital costs (including incidental costs of the STP2 Project including but not limited to items such as salary and rental costs) to be incurred for 9
10. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") the next forthcoming financial quarterly period (“Operating Budget”) from the first date of issuance of Sukuk Murabahah under the First Tranche, the first Operating Budget is to be submitted on or immediately prior to the first issue date under the First Tranche and subsequent Operating Budget to submitted on every consecutive 3 months thereafter. (c) The Issuer shall use its best efforts to procure the consent of the Penang State Government for the creation of the Third Party Share Charge to secure the First Tranche and shall on quarterly basis commencing from the date of first issuance of the Sukuk Murabahah provide the Sukuk Trustee the status of procuring such consent. (d) In the event that consent of the Penang State Government for the creation of the Third Party Share Charge to secure the First Tranche is successfully procured, the Issuer shall forthwith cause the Shareholder to take all steps necessary for the perfection of the Third Party Share Charge. (e) The Issuer shall be permitted to request for a substitution of land(s) charged as security for the First Tranche (subject to prior written consent of the Security Agent acting on the instructions of the Sukukholders of the First Tranche by way of special resolution) (“Land Substitution”). (f) Notwithstanding the STP2A Land Charge, the Issuer may from time to time, and without the consent of the Sukukholders holding Sukuk Murabahah belonging to the First Tranche and without having to pay to the Security Agent for the account of such Sukukholders any redemption sum, request for the release and discharge of any of the Pledged Lands (such Pledged Land that has been successfully released and discharged pursuant to this paragraph (f) shall be referred to as “Released Land”) PROVIDED THAT such request may only be made if the following conditions are met:(i) no Event of Default has occurred and is subsisting in respect of the First Tranche and, following such release and discharge of the relevant Pledged Land, no Event of Default under the First Tranche would occur; (ii) the LTV Ratio is in compliance and, following such release and discharge of the relevant Pledged Land, the LTV Ratio would be complied; (iii) the aggregate of the Open Market Value of all 10
11. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") the Released Land (including the relevant Pledged Land proposed to be released and discharged from the STP2A Land Charge) would not exceed the Threshold Value. For the purpose of this paragraph (f), “Threshold Value” means:A minus B where: A means the aggregate Open Market Value, as at, or immediately prior to, the date of first issuance of Sukuk Murabahah belonging to the First Tranche, of all the Pledged Lands that are charged under the STP2A Land Charge. B means as at, or immediately prior to, the date of first issuance of Sukuk Murabahah belonging to the First Tranche, the requisite Open Market Value of the Pledged Lands that is necessary to meet the LTV Ratio at that relevant time of 50% (for the purpose of meeting the LTV Ratio of 50%, the maximum nominal value of the Sukuk Murabahah belonging to the First Tranche of RM1.3 billion shall be taken into account). For the avoidance of doubt, Net Cash shall be zero when computing the LTV Ratio for this purpose. (g) The Issuer shall, whenever it receives any disposal proceeds or revenue or monies due to it as a result of its dealing with the Released Land upon or subsequent to the discharge of the Released Land from the STP2A Land Charge, credit or cause to be credited such proceeds or revenue or monies into the Equity Account. (h) Subject to the release and discharge of the Released Land having the aggregate Open Market Value equal to the Threshold Value from the STP2A Land Charge pursuant to paragraph (f) above and subject further to the fulfilment of the following conditions:(i) no Event of Default has occurred and is subsisting in respect of the First Tranche and, following the redemption of such Pledged Land, no Event of Default under the First Tranche would occur; and (ii) the LTV Ratio is in compliance and, following the redemption of such Pledged Land, the LTV Ratio would be complied; the Issuer may, without the consent of the Sukukholders holding Sukuk Murabahah belonging to the First Tranche, redeem any of the remaining Pledged Lands (such Pledged Land that has been 11
12. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") redeemed pursuant to this paragraph (h) shall be referred to as “Redeemed Land”) at the relevant Redemption Sum by paying or causing to pay the relevant Redemption Sum to the Security Agent whereupon the Security Agent shall execute the relevant discharge of charge over such Redeemed Land. For the purpose of this paragraph (h), “Redemption Sum” shall mean, in respect of each Pledged Land proposed to be redeemed, an amount equivalent to 50% of the Open Market Value (as at the time of redemption) of such Pledged Land. Upon the Security Agent’s receipt of the Redemption Sum, the Security Agent shall credit the Redemption Sum into the Escrow Account whereby an amount equal to 50% of the Redemption Sum shall be earmarked for mandatory redemption of the outstanding Sukuk Murabahah belonging to the First Tranche on a Periodic Profit Payment Date immediately following the Security Agent’s receipt of the Redemption Sum in accordance with the provisions on Mandatory Early Redemption as set out herein. (i) (j) Whenever each Redeemed Land is redeemed in accordance with paragraph (h) above, the Issuer undertakes to the Sukuk Trustee and the Security Agent that whenever it receives the disposal proceeds or revenue or monies due to it as a result of its dealing with such Redeemed Land upon or subsequent to the discharge of the Redeemed Land from the STP2A Land Charge (“Proceeds from Dealing”), it shall:(1) credit into the Operating Account an amount equivalent to 50% of the Open Market Value (as at the relevant time of redemption) of such Redeemed Land; and (2) in the case where the Proceeds from Dealing exceeds the Open Market Value (as at the relevant time of redemption) of such Redeemed Land, credit such the differential sum into the Equity Account. The Issuer shall not declare or pay any dividends or make any distributions (“Restricted Distribution”) whether income or capital in nature on or in respect of its (or any class of its) share capital or make any distribution, repayment or return of capital to its shareholders unless: (i) 12 The Restricted Distributions is declared or paid after the First Availability Period or after
13. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") the First Tranche are fully issued, whichever is earlier; (ii) The reclamation and Infrastructure Works in respect of STP2A is completed in the sole and absolute determination of the Sukukholders of the First Tranche acting unanimously; (iii) The Issuer has mandatorily redeemed the Sukuk Murabahah belonging to the First Tranche with nominal value of at least the total amount of the Restricted Distribution on a Periodic Profit Payment Date (as defined herein) immediately preceding the proposed Restricted Distribution payment date in accordance with the provisions on Mandatory Early Redemption as set out herein; (iv) No Event of Default or potential Event of Default has occurred or is continuing or will occur as a result of the Restricted Distribution in the sole and absolute determination of the Sukukholders of the First Tranche acting unanimously; and (v) Following the payment of every Restricted Distribution: (1) the Equity would not be less than RM145,000,000; and (2) the Debt-to-Equity exceed 80:20. ratio would not The financial covenants referred to in subparagraphs (1) and (2) above shall be tested immediately prior to the payment of any proposed Restricted Distributions. For the purpose of this paragraph:- Debt to Equity ratio = Debt less A Equity less B “Debt” is defined as at any time, the indebtedness of the Issuer based on the then latest available audited financial statements at that time. “Equity” is defined as at any time the aggregate of the shareholders’ funds (including minority interest) and all subordinated shareholders’ advances/loans of the Issuer based on the then latest available audited financial statements at that time. 13
14. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") “A” means the nominal amount of the outstanding Sukuk Murabahah expected to be mandatorily redeemed pursuant to the provisions on Mandatory Early Redemption. “B” means the amount proposed to be distributed pursuant to the Restricted Distribution. For the avoidance of doubt, redemption of preference shares out of profits pursuant to the Repayment of Amount Owing from the proceeds of the issuance of Sukuk Murabahah belonging to the First Tranche shall not be subject to the above conditions. w. Definitions The following terms shall have the meanings given to them as follows: "E&O Group" means the Guarantor and its direct and indirect subsidiaries and including jointly controlled entities and associate companies of the Guarantor. "Existing Facilities” means the existing syndicated financing facilities of up to RM1,084 million granted by Maybank Islamic Berhad and RHB Islamic Bank Berhad to the Issuer. “Group” means the Guarantor and its subsidiaries. “Infrastructure Work” means such infrastructure work to be carried out in respect of STP2A pursuant to the terms and conditions of the SPA. “Material Adverse Effect” means: (i) an event which will materially and adversely affect the ability of the Issuer or the Guarantor or the Security Party (if applicable to that Tranche) to perform their respective obligations under the Transaction Documents to which they are a party; (ii) an event which could have a material adverse effect on the condition (financial or otherwise) of the Issuer, the Guarantor, the Security Party (if applicable to that Tranche) or the E&O Group taken as a whole; or (iii) an event which could have a material adverse effect on the validity, legality or enforceability of the Transaction Documents or the rights or remedies of the Sukuk Trustee, the Security Agent and/or the Sukukholders under the relevant Transaction Documents. “Material Subsidiaries” means a subsidiary of the 14
15. TANJUNG PINANG DEVELOPMENT SDN BHD AN ISLAMIC MEDIUM TERM NOTE PROGRAMME FOR THE ISSUANCE OF ISLAMIC MEDIUM TERM NOTES ("SUKUK MURABAHAH") OF UP TO RM1.5 BILLION IN NOMINAL VALUE ("SUKUK MURABAHAH PROGRAMME") Guarantor whose total profit after tax (consolidated in the case of a subsidiary which itself has subsidiaries) represent not less than 5% of the consolidated profit after tax of the E&O Group, and “Material Subsidiary” mean any one of them and in each case calculated by reference to the then latest: (a) audited financial statements of such subsidiary (consolidated in the case where such subsidiary has subsidiaries); and (b) audited consolidated financial statements of the E&O Group. “SPA” means the sale and purchase agreement dated 30 March 2017 and entered into between the Issuer (as vendor) and KWAP (as purchaser) (which was subsequently novated by KWAP to KWEST pursuant to the novation agreement dated 1 March 2018) in respect of the sale of certain parcels of land at Tanjung Tokong, Pulau Pinang. [The rest of this page has been intentionally left blank] 15