TSH Sukuk IMTN (TSH Resources Berhad) RM150 Million - Principal Terms and Conditions

Transcription

1. . PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSAL 1. BACKGROUND INFORMATION (a) Issuer (i) Name : TSH Sukuk Murabahah Sdn. Bhd. (formerly known as Restu Muhibbah Sdn. Bhd.) (“Issuer”) (ii) Address : Level 10, Menara TSH No. 8, Jalan Semantan Damansara Heights 50490 Kuala Lumpur (iii) Business Registration No. : 1132628-K (iv) Date and Place of Incorporation : 25 February 2015 / Malaysia (v) : Not applicable. Date of Listing (vi) Status on residence : Resident controlled company. (vii) Principal activities : To act as a special purpose vehicle for the purpose of undertaking the Sukuk Murabahah Programmes (as defined in item 2(c) below) (viii) Board of directors : The board of directors of the Issuer as at 30 April 2015 is as follows: (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders (a) Dato’ Tan Aik Sim (b) (c) Lim Fook Hin Chew Siew Yeng : The shareholder and shareholding structure of the Issuer as at 30 April 2015 are as follows: Name of Shareholder TSH Resources Berhad Number of Shares Held 2 % of Equity Held 100 Page 1 of 37 {KSI / 01202562 v2}
2. . (x) The  : authorised, issued and paid-up share capital of the Issuer as at 30 April 2015 are as follows: Authorised, issued and paid-up capital Authorised capital RM400,000 divided into 400,000 ordinary shares of RM1.00 each. Issued and paid-up capital RM2 divided into 2 ordinary shares of RM1.00 each. (xi) Disclosure following of the  If the issuer or its board members have been convicted or charged with any offence under the securities law, corporation laws or other laws involving fraud or dishonesty in a court of law, for the past five years prior to the date of application; and  None.  If the issuer has been subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the date of application.  Not applicable as the Issuer is not a listed company. (b) Obligor (i) Name : TSH Resources Berhad (“TSH" or the “Obligor”) (ii) Address : Level 10, Menara TSH No. 8 Jalan Semantan Damansara Heights 50490 Kuala Lumpur (iii) Business Registration No. : 49548-D (iv) Date and Place of Incorporation : 7 August 1979 / Malaysia Page 2 of 37 {KSI / 01202562 v2}
3. . (v) Date of Listing : TSH was listed on the Second Board of Bursa Malaysia Securities Berhad on 31 January 1994 and subsequently transferred its listing status to the Main Market of Bursa Malaysia Securities Berhad on 12 June 2000. (vi) Status on residence : Resident controlled company. (vii) Principal activities : The principal activities of TSH are investment holding, oil palm cultivation and forest plantation. (viii) Board of directors : The board of directors of TSH as at 20 April 2015 is as follows: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders : Datuk (Dr.) Kelvin Tan Aik Pen Dato’ Tan Aik Sim Datuk Suboh bin Md Yassin YB Datuk Nur Jazlan bin Mohamed Datuk Jaswant Singh Kler Dato’ Jasmy bin Ismail Tan Aik Kiong Lim Fook Hin Chew Siew Yeng Tan Aik Yong The substantial shareholders and shareholdings structure of the Obligor as at 20 April 2015 are as follows: Name of Substantial Shareholder Datuk (Dr.) Kelvin Tan Aik Pen Tunas Lestari Sdn. Bhd. Embun Yakin Sdn. Bhd. (x) Authorised, issued and paid-up capital Number of Shares Held 163,394,239 ordinary shares of RM0.50 each 85,500,000 ordinary shares of RM0.50 each 75,703,359 ordinary shares of RM0.50 each % of Equity Held 12.14 6.35 5.63 The: authorised, issued and paid-up share capital of the Obligor as at 20 April 2015 are as follows: Authorised capital RM1,000,000,000 divided into ordinary shares of RM0.50 each 2,000,000,000 Page 3 of 37 {KSI / 01202562 v2}
4. . (xi) Disclosure of the following Issued and paid-up capital RM672,705,721.50 divided into 1,345,411,443 ordinary shares of RM0.50 each (net of treasury shares).   If the Obligor or its board members have been convicted or charged with any offence under the securities law, corporation laws or other laws involving fraud or dishonesty in a court of law, for the past five years prior to the date of application; and  None.  If the Obligor has been subjected to any action by the stock exchange for any breach of the listing requirements or rules issued by the stock exchange, for the past five years prior to the date of application.  None. Page 4 of 37 {KSI / 01202562 v2}
5. . 2. (a) PRINCIPAL TERMS AND CONDITIONS Name of parties involved in the proposed transaction (where applicable) (i) Principal adviser RHB Investment Bank Berhad (“RHBIB”) (ii) Lead Arranger RHBIB (the “Lead Arranger”) (iii) Co-arranger Not applicable. (iv) Solicitor Messrs Zul Counsel”) (v) Financial adviser Not applicable (vi) Technical adviser Not applicable. (vii) Sukuk trustee Malaysian Trustees Berhad (the “Sukuk Trustee”) Rafique & Partners (the “Legal (viii) Shariah adviser RHB Islamic Bank Berhad (the “Shariah Adviser”) (ix) Guarantor Not applicable. (x) Valuer Not applicable. (xi) Facility Agent RHBIB (the “Facility Agent”) (xii) Primary Subscriber (under a bought-deal arrangement) and amount subscribed To be determined, if applicable, prior to each issuance. (xiii) Underwriter and amount underwritten Not applicable. (xiv) Central depository Bank Negara Malaysia ("BNM"). (xv) BNM. Paying agent (xvi) Reporting Accountant Not applicable (xvii) Calculation agent Not applicable. Page 5 of 37 {KSI / 01202562 v2}
6. . (xviii) Others (please specify) Lead Manager/Bookrunner RHBIB Tender Panel Member (“TPM”) Persons to whom an issue of, or an offer or invitation to subscribe the ICPs (as defined in item 2(c) below) is made, would fall within any of the categories of persons or in the circumstances specified under Schedule 6 or Section 229(1)(b) and Schedule 7 or Section 230(1)(b), read together with Schedule 9 or Section 257(3) of the Capital Markets and Services Act, 2007 (“CMSA”) and does not constitute an offer to the public within the categories specified in Section 4(6) of the Companies Act, 1965, as amended from time to time. Commodity Trading Participant ("CTP") A commodity trading participant to be determined and appointed at the point of entering into the Commodity Murabahah transaction (more particularly referred to in item 2(c) below). Account Bank RHB Islamic Bank Berhad (“Account Bank”) (b) Islamic Principles used Murabahah (via Tawarruq arrangement) (c) Facility description Sukuk issuance programmes under the Shariah principle of Murabahah which comprise two programmes, which are the following: (i) Islamic Commercial Paper Programme of up to RM50.0 million in nominal value ("ICP Programme"); and (ii) Islamic Medium Term Note Programme of up to RM150.0 million in nominal value ("IMTN Programme"). The ICP Programme and IMTN Programme are collectively referred to as the "Sukuk Murabahah Programmes". The Islamic commercial papers ("ICPs") and the Islamic medium term notes ("IMTNs") to be issued from time to time under the ICP Programme and IMTN Programme respectively are collectively referred to as "Sukuk Murabahah”. The Sukuk Murabahah will be issued from time to time based on the Shariah principle of Murabahah (via Tawarruq arrangement) based on Commodity Murabahah structure in the following form: Page 6 of 37 {KSI / 01202562 v2}
7. . Commodity Murabahah The Issuer will be appointed by the Sukukholders (through the Sukuk Trustee), as the purchase agent (the “Purchase Agent”) for the Sukukholders, for the purchase and sale of Shariah-compliant commodities. The Purchase Agent will enter into a Purchase Agency Agreement to appoint the Facility Agent as the sub-purchase agent (the “Sub-Purchase Agent”) for the purchase of Shariah-compliant commodities. The Issuer (in its capacity as the Purchase Agent), TSH (in its capacity as the purchaser for itself) and the Sub-Purchase Agent will enter into the Commodity Murabahah Agreement (the “Commodity Murabahah Agreement”) which documents the sale and purchase of the commodities under the Shariah principles of Murabahah. Pursuant to the Commodity Murabahah Agreement, prior to the date on which the relevant tranche of Sukuk Murabahah is issued, TSH (in its capacity as purchaser for itself) shall from time to time issue a purchase order (“Purchase Order”) in relation to the said tranche to the Purchase Agent. In the Purchase Order, TSH (in its capacity as purchaser for itself) will request the Purchase Agent to purchase the Shariah-compliant commodities and will irrevocably undertake to purchase the Shariahcompliant commodities from the Sukukholders (through the Sub-Purchase Agent). Based on the Purchase Order, the Purchase Agent (through the Sub-Purchase Agent) will purchase the Shariah-compliant commodities on behalf of the Sukukholders from a commodity vendor (the “Commodity Vendor A”) through Bursa Suq Al-Sila’ on spot basis at a price (“Purchase Price”). The Purchase Price shall be in compliance with the assets pricing requirements under the Guidelines on Sukuk (as defined in item 2(e) below). Page 7 of 37 {KSI / 01202562 v2}
8. . The Issuer shall issue Sukuk Murabahah to the Sukukholders to raise proceeds to fund the payment of the Purchase Price which proceeds raised from the issuance of Sukuk Murabahah shall be for an amount equal to the Purchase Price and the proceeds thereof shall be used to pay the Purchase Price of the Shariah-compliant commodities. The Sukuk Murabahah shall evidence the Sukukholders’ undivided beneficial ownership in the Shariahcompliant commodities and the Sukukholders’ entitlement to receive the deferred sale price subsequently upon the Shariah-compliant commodities being sold to TSH (acting as purchaser for itself) (“Deferred Sale Price”). The Deferred Sale Price is comprised of the Purchase Price plus a mark-up profit or, if applicable, the Discounted Amount (as defined below) payable on a deferred payment basis. “Discounted Amount” means the difference between (i) the nominal value of the relevant Sukuk Murabahah and (ii) Sukuk Murabahah proceeds. Proceeds from the Sukuk Murabahah issuance shall be utilised towards payment of the Purchase Price due and payable to the Commodity Vendor A. Thereafter, pursuant to the Commodity Sale Agreement, the Sub-Purchase Agent shall sell the Shariah-compliant commodities to TSH (acting as purchaser for itself) at the Deferred Sale Price. Upon completion of such purchase by TSH (acting as purchaser for itself), pursuant to an on-sale agency agreement (“On-Sale Agency Agreement”), the Facility Agent (in such capacity, the sale agent of TSH) shall sell the Shariah-compliant commodities to a commodity vendor (the “Commodity Vendor B”) through the Bursa Suq Al-Sila’ on spot basis for a cash consideration equals to the Purchase Price. The Issuer, TSH and/or TSH’s subsidiaries shall utilise such proceeds for Shariah-compliant purposes. Page 8 of 37 {KSI / 01202562 v2}
9. . During the tenure of the Sukuk Murabahah, for Sukuk Murabahah with periodic payments (“Periodic Payments”), upon receipt of the Periodic Payments from TSH as payment in and towards the Deferred Sale Price, the Issuer shall make Periodic Payments to the Sukuk Trustee (acting for the Sukukholders). Each such payment by TSH shall pro tanto reduce the Deferred Sale Price payable by TSH. On the date of maturity of the Sukuk Murabahah, all the then outstanding Deferred Sale Price shall be paid by the Issuer, upon receipt of such payment(s) from TSH, to the Sukuk Trustee, for the redemption of the Sukuk Murabahah, whereupon the Sukuk Murabahah shall be cancelled. For Sukuk Murabahah without Periodic Payments, the Issuer shall make a one-off payment (“One-off Payment”), which shall be equivalent to the Deferred Sale Price to the Sukuk Trustee (acting for the Sukukholders) upon receipt of the same from TSH. Each such payment by TSH shall pro tanto reduce the Deferred Sale Price payable by TSH. On the date of maturity of the Sukuk Murabahah, all the then outstanding Deferred Sale Price shall be paid by the Issuer, upon receipt of such payment(s) from TSH, to the Sukuk Trustee, for the redemption of the Sukuk Murabahah, whereupon the Sukuk Murabahah shall be cancelled. A diagrammatical illustration of the transaction structure is set out in Appendix I. (d) Identified assets Shariah-compliant commodities (excluding ribawi items in the category of medium of exchange such as currency, gold and silver) which will be identified, from time to time, at or around the time of issuance of the Sukuk Murabahah. (e) Purchase and selling price/rental To be determined prior to each issuance of the Sukuk Murabahah under the Sukuk Murabahah Programmes. The purchase price will be the amount to be disbursed to purchase the Shariah-compliant commodities (the “Purchase Price”) and shall comply with the asset pricing requirements under the Guidelines on Sukuk (revised and effective on 28 August 2014) issued by the Securities Commission Malaysia (“SC”) as may be replaced, substituted or revised from time to time (“Guidelines on Sukuk”). The Deferred Sale Price will represent the Purchase Price and the mark-up profit and if applicable, the Discounted Amount, payable on deferred payment basis. Page 9 of 37 {KSI / 01202562 v2}
10. . (f) Issue/sukuk programme size ICP Programme Up to RM50.0 million nominal value The aggregate nominal value of the ICPs outstanding at any point in times shall not exceed the ICP Programme limit of RM50.0 million. IMTN Programme Up to RM150.0 million nominal value The aggregate nominal value of the IMTNs outstanding at any point in times shall not exceed the IMTN Programme limit of RM150.0 million. (g) Tenure of issue/sukuk programme Tenure of the Sukuk Murabahah Programmes: ICP Programme Seven (7) years from the first Issue Date (as defined in item 2(x) below) under the ICP Programme, provided that the first issue of the ICPs under the ICP Programme shall not be later than two (2) years from the date of the SC’s authorisation. IMTN Programme Fifteen (15) years from the first Issue Date under the IMTN Programme, provided that the first issue of the IMTNs under the IMTN Programme shall not be later than two (2) years from the date of the SC’s authorisation. The tenure of the Sukuk Murabahah: ICPs One (1) to twelve (12) months as the Issuer may select, provided that the ICPs mature prior to the expiry of the ICP Programme. IMTNs More than one (1) year and up to fifteen (15) years as the Issuer may select, provided that the IMTNs mature prior to the expiry of the IMTN Programme. The tenure of each ICP and IMTN to be issued under the ICP Programme and IMTN Programme, respectively, will be determined prior to the issue date. Page 10 of 37 {KSI / 01202562 v2}
11. . (h) Availability period of sukuk programme (or facility) The period commencing from the date of compliance of all conditions precedent of the Sukuk Murabahah Programmes unless waived by the Lead Arranger, and all other applicable conditions to the satisfaction of the Lead Arranger and ending on the expiry date of the ICP Programme or the IMTN Programme (as the case may be), provided that the first issuance of the Sukuk Murabahah under each of the Sukuk Murabahah Programmes shall be made within two (2) years from the date of SC’s authorisation. (i) Profit/coupon/rental rate ICPs Not applicable as the ICPs shall be issued without Periodic Payments. IMTNs The IMTNs will be issued with Periodic Payments which will be determined at the point of each issuance of such IMTNs. (j) Profit/coupon/rental payment frequency ICPs . Not applicable as the ICPs shall be issued without Periodic Payments. IMTNs The Periodic Payments shall be payable at semiannual intervals in arrears or such other period to be determined by the Issuer and the Lead Arranger prior to each issuance of the IMTN with the last profit payment to be made on the respective maturity date or upon redemption on the IMTN, whichever is the earlier, in accordance with the rules issued by Malaysian Electronic Clearing Corporation Sdn Bhd (“MyClear”) as amended and/or substituted from time to time or its successors-in-title or successor in such capacity during the tenure of the Sukuk Murabahah. (k) Profit/coupon/rental payment basis ICPs Not applicable. IMTNs Actual/365 days. (l) (m) Security/collateral (if any) None. Details on utilisation of proceeds by issuer Issuer’s utilisation The proceeds from the issuance of the Sukuk Murabahah shall be utilised by the Issuer to pay the Purchase Price of the Shariah-compliant commodities. Page 11 of 37 {KSI / 01202562 v2}
12. . TSH’s utilisation The proceeds raised from the sale of Shariahcompliant commodities shall be utilised by TSH and/or its subsidiaries for their Shariah-compliant general working capital and capital expenditure requirements (including but not limited to plantation development expenditures). (n) Sinking fund and designated accounts (if any) Designated Accounts The Issuer shall open and maintain the following Shariah-compliant accounts with the Account Bank: Proceeds Account (“PA”); Finance Service Reserve Account (“FSRA”); and Principal Service Reserve Account (“PSRA”) (i) (ii) (iii) (collectively the “Designated Accounts”). PA To capture all the proceeds from the issuance of the Sukuk Murabahah under the Sukuk Murabahah Programmes and to be utilised in accordance with the purposes stated under item 2(m) above. FSRA (i) ICPs Not applicable (ii) IMTNs In respect of issuance of IMTNs with Periodic Payment(s), the Issuer shall deposit into the FSRA, 100% of the next Periodic Payment(s) under the relevant IMTNs due and payable, one (1) month prior to the due date of such Periodic Payment (the “FSRA Minimum Required Balance”). Funds from the FSRA shall be utilised for Periodic Payments for the relevant Sukuk Murabahah. PSRA (i) ICPs In respect of the ICPs, the Issuer shall ensure that an amount equivalent to the next principal redemption amount due and payable shall be deposited in the PSRA one (1) week prior to the respective maturity dates. Page 12 of 37 {KSI / 01202562 v2}
13. . (ii) IMTNs The PSRA shall have a minimum credit balance of 100% of the next principal redemption of the IMTNs one (1) month prior to the respective maturity dates of the relevant IMTNs. The minimum required balance in (i) and (ii) above are referred to as “PSRA Minimum Required Balance”. Funds from the PSRA shall be utilised for principal redemption of the relevant Sukuk Murabahah. The PA, FSRA and PSRA shall be solely operated by the Sukuk Trustee. For the avoidance of doubt, any non-compliance in relation to meeting the respective FSRA and PSRA Minimum Required Balance shall constitute an Event of Default (as defined in item 2(v) below) if failure to meet such obligation is not remedied within seven (7) days from the date of the relevant Minimum Required Balance is required to be deposited into the relevant Designated Accounts. Funds held in the Designated Accounts shall be permitted to be invested in Permitted Investments (as defined in item 2(y)(viii) below) by the Sukuk Trustee upon instruction from the Issuer, provided that: (o) (i) such funds utilised for Permitted Investments shall, where necessary, be remitted to the FSRA and the PSRA respectively at least five (5) Business Days prior to any payment obligations of the Issuer being due and payable; (ii) such Permitted Investment are to be held and not traded; and (iii) such Permitted Investment shall denominated in Ringgit Malaysia. be Rating  Credit rating(s) assigned (please specify if this is an indicative rating) Preliminary ratings of: (i) MARC-1IS for the ICP programme; and (ii) AA- IS for the IMTN Programme.  Name of rating agency Malaysian Rating Corporation Berhad (“MARC”). Page 13 of 37 {KSI / 01202562 v2}
14. . (p) Mode of issue ICPs The ICPs may be issued via competitive tender by the TPMs or direct placement on a best effort basis or on a bought deal basis. IMTNs The IMTNs may be issued via direct placement on a best effort basis or on a bought deal basis or on a book running on a best effort basis. Issuance of Sukuk Murabahah under the Sukuk Murabahah Programmes shall be in accordance with: (i) the “Operational Procedures for Securities Services” and “Operational Procedures for Real Time Electronic Transfer of Funds and Securities (“RENTAS”)” both issued by MyClear (“MyClear Procedures”); and (ii) the “Participation and Operation Rules for Payment and Securities Services” issued by MyClear (“MyClear Rules”), or their replacement thereof (collectively “MyClear Rules and MyClear Procedures”) applicable from time to time. (q) Selling restriction, including tradability Selling Restrictions at Issuance The Sukuk Murabahah may only be offered, sold, transferred or otherwise disposed directly or indirectly to persons falling within the relevant category of the persons specified in Section 4(6) of the Companies Act, 1965, as amended from time to time, and persons to whom an offer or invitation to subscribe the Sukuk Murabahah may be made and to whom the Sukuk Murabahah are issued would fall within: (i) Schedule 6 or Section 229(1)(b); and (ii) 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. Page 14 of 37 {KSI / 01202562 v2}
15. . Selling Restrictions Thereafter The Sukuk Murabahah may only be offered, sold, transferred or otherwise disposed directly or indirectly to persons falling within the relevant category of the persons specified in Section 4(6) of the Companies Act, 1965, as amended from time to time, and persons to whom an offer or invitation to purchase the Sukuk Murabahah would fall within 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. The Sukuk Murabahah are tradable subject to the selling restrictions above. (r) Listing status and types of listing The Sukuk Murabahah will not be listed on Bursa Malaysia Securities Berhad ("Bursa Securities") or any other stock exchange. (s) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify) None. (t) Conditions precedent Conditions precedent to the initial issuance of the ICPs and/or the IMTN under the Sukuk Murabahah Programmes shall be subject, but not be limited to the following: A. Main Documentation (i) Satisfactory completion and execution of the Transaction Documents (as defined in item 2(y)(iii) below) and, where applicable, duly endorsed as exempted under the Stamp Duty (Exemption) (No. 23) Order 2000 and presented for registration (where applicable). Page 15 of 37 {KSI / 01202562 v2}
16. . B. The Issuer Receipt of: (i) A certificate signed by a duly authorised officer of the Issuer certifying that there is (a) no adverse change in the condition (financial, economic or otherwise) of the Issuer which is material to the issue of the Sukuk Murabahah; (b) no event rendering untrue or incorrect to a material extent any of the representation and warranties; (c) no material breach of any of the undertakings by the Issuer; and (d) no Event of Default or an event, which with the giving of notice or passage of time or both, would be an Event of Default, would have occurred and is continuing under the Transaction Documents; (ii) Certified true copies of the Certificate of Incorporation and the Memorandum and Articles of Association of the Issuer; (iii) Certified true copies of the latest Forms 24, 44 and 49 of the Issuer; (iv) Certified true copies of the board resolution of the Issuer authorising, among others, the issuance of the Sukuk Murabahah and the execution of the Transaction Documents; (v) A list of the Issuer’s authorised signatories and their respective specimen signatures; (vi) A report on the relevant company search of the Issuer; and (vii) A report on the relevant winding up search conducted on the Issuer. Page 16 of 37 {KSI / 01202562 v2}
17. . C. The Obligor Receipt of: D. (i) A certificate signed by a duly authorised officer of the Obligor certifying that there is (a) no adverse change in the condition (financial, economic or otherwise) of the Obligor which is material to the issue of the Sukuk Murabahah; (b) no event rendering untrue or incorrect to a material extent any of the representation and warranties; (c) no material breach of any of the undertakings by the Obligor; and (d) no Event of Default or an event, which with the giving of notice or passage of time or both, would be an Event of Default, would have occurred and is continuing under the Transaction Documents; (ii) Certified true copies of the Certificate of Incorporation and the Memorandum and Articles of Association of the Obligor; (iii) Certified true copies of the latest Forms 24, 44 and 49 of the Obligor; (iv) Certified true copies of the board resolution of the Obligor authorising, among others, the issuance of the Sukuk Murabahah by the Issuer and the execution of the Transaction Documents; (v) A list of the Obligor’s authorised signatories and their respective specimen signatures; (vi) A report on the relevant company search of the Obligor; and (vii) A report on the relevant winding up search conducted on the Obligor. General (i) Evidence that the authorisation from the SC in respect of the Sukuk Murabahah Programmes has been Page 17 of 37 {KSI / 01202562 v2}
18. . obtained; (ii) All necessary approvals and consents required (including but not limited to the existing lenders/financiers of the Issuer and the Obligor) for the implementation of the Sukuk Murabahah Programmes (if required) and the execution of the Transaction Documents have been obtained and the Issuer and the Obligor is in compliance with all conditions of such approvals and consents; (iii) Confirmation from the rating agency of an preliminary ratings of at least AA- IS for the IMTN Programme and MARC1IS for the ICP Programme; (iv) The Lead Arranger has received from the Legal Counsel a favourable legal opinion addressed to it and the Sukuk Trustee advising with respect to, among others, the legality, validity and enforceability of the Transaction Documents; (v) The Lead Arranger has received from the Legal Counsel a confirmation addressed to the Lead Arranger that all the conditions precedent have been duly fulfilled or waived as the case may be; (vi) Evidence of approval and endorsement from the Shariah Adviser that the structure and mechanism together with the Transaction Documents of the Sukuk Murabahah Programmes are in compliance with Shariah; (vii) Evidence that the Sukuk Trustee’s Reimbursement Account for Sukukholders’ Actions (as defined in item 2 (y)(xi) below) has been opened as stipulated under the Trust Deeds Guidelines; (viii) Evidence that the Designated Accounts have been opened with the Account Bank; Page 18 of 37 {KSI / 01202562 v2}
19. . (ix) Evidence that all fees, costs and expenses in relation to the Sukuk Murabahah Programmes have been paid in full; and (x) Any other conditions precedent as set out in the relevant Transaction Documents and as may be stipulated by the Lead Arranger and/or the Legal Counsel. Conditions precedent for subsequent issuance(s) of the Sukuk Murabahah: (u) Representations and warranties (i) The Issuer’s certification that it is in compliance with all Representations and Warranties under the Transaction Documents; (ii) No Event of Default has occurred or shall occur if the relevant issuance of the Sukuk Murabahah is made; (iii) Evidence of the confirmation from the Shariah Adviser that the issuance of the Sukuk Murabahah are Shariahcompliant; (iv) Evidence that the Sukuk Murabahah Programme shall have maintained a minimum long term rating of at least AA-/AA3 or its equivalent and short term rating of at least MARC-1/P1 or its equivalent; (v) The nominal value of each ICPs and IMTNs issued shall not exceed the stipulated issue size of the ICP Programme and IMTN Programme, respectively; and (vi) Any other conditions precedent as set out in the relevant Transaction Documents and as may be stipulated by the Lead Arranger and/or the Legal Counsel. The representations and warranties of the Issuer and/or the Obligor (as the case may be) shall include but not limited to the following: Page 19 of 37 {KSI / 01202562 v2}
20. . (i) Each of the Issuer and the Obligor is a company duly incorporated and validly existing under the laws of Malaysia and have full power and authority to own their respective assets and to carry out their respective businesses; (ii) Each of the Issuer and the Obligor has the power to enter into, exercise its rights under and perform its obligations under respective Transaction Documents; All necessary actions, authorisations and consents required under the respective Transaction Documents have been taken, fulfilled and obtained and remain in full force and effect; (iii) (iv) The Transaction Documents constitute valid, binding and enforceable obligations of the Issuer and/or the Obligor in accordance with their respective terms; (v) The Issuer’s and the Obligor’s entry into, exercise of its rights under and performance of its obligations under the respective Transaction Documents do not and will not violate any existing law or agreements to which it is a party; (vi) No Events of Default has occurred and there is no encumbrance on the assets of the Issuer and the Obligor, other than those that have been disclosed; (vii) There is no litigation or arbitration that will materially and adversely affect the ability of the Issuer and the Obligor to perform its obligations under the Transaction Documents to which it is a party; (viii) The audited financial statements of the Issuer and the Obligor of each of its financial year have been prepared on a basis consistently applied in accordance with the approved accounting standards in Malaysia and give a true and fair view of the results of its operations for that year and the state of its affairs at that date; (ix) The Issuer and the Obligor are in compliance and will comply with any applicable laws and regulations; and (x) Such other representations and warranties as may be advised by the Legal Counsel. Page 20 of 37 {KSI / 01202562 v2}
21. . (v) Events of default, dissolution event and enforcement event, where applicable The events of default (“Events of Default”) to include but not limited to the following: (i) Non-payment: the Issuer and/or the Obligor fails to pay any amount falling due under any of the Sukuk Murabahah and the Transaction Documents; (ii) Misrepresentation: any representation or warranty which is made or given by the Issuer and/or the Obligor under the Transaction Documents or which is contained in any certificate, document or statement furnished at any time pursuant to the terms of the Sukuk Murabahah and/or any of the Transaction Documents proves to be incorrect or misleading in any material respect on or as of the date made or given; (iii) Breach of obligations: the Issuer and/or the Obligor fails to observe or perform its obligations under any of the Transaction Documents and, if such breach is in reasonable opinion of the Sukuk Trustee is capable of being remedied, the Issuer and/or the Obligor does not remedy the breach within a period of thirty (30) days after the Issuer and/or the Obligor becomes aware or having been notified by the Sukuk Trustee of the breach, whichever is earlier; (iv) Breach of contractual obligations: there has been a breach by the Issuer and/or the Obligor of any obligation under the Issuer’s or the Obligor’s contractual obligations which may materially and adversely affect the Issuer’s and/or the Obligor’s ability to perform its obligations under the Transaction Documents and, if in the opinion of the Sukuk Trustee is capable of being remedied, the Issuer and/or the Obligor does not remedy the breach within a period of thirty (30) days after the Issuer and/or the Obligor becomes aware or having been notified by the Sukuk Trustee of the breach, whichever is earlier; (v) Cross-default: save for such indebtedness which are being contested in good faith by the Issuer and/or the Obligor, any indebtedness of any member of the TSH Group (as defined below) for monies borrowed becomes due or payable or capable of being declared due or payable prior to its stated maturity by reason of a default by any member of the TSH Group in Page 21 of 37 {KSI / 01202562 v2}
22. . its obligations in respect of the same, or any member of the TSH Group fails to make any payment in respect thereof on the due date for such payment or if due on demand when demanded or the security for any such indebtedness becomes enforceable or any guarantee or similar obligations of any member of the TSH Group for any such indebtedness is not discharged at maturity or when called, provided that no Events of Default under this paragraph (v) shall occur if the aggregate amount of indebtedness for monies borrowed is less than fifty per centum (50.0%) of TSH Group’s total borrowed monies (including Islamic financing but excluding the Sukuk Murabahah) or Ringgit Malaysia One Hundred Million (RM100.0 Million), whichever is the higher; “TSH Group” means TSH and its subsidiaries, if any. (vi) Appointment of receiver, legal process: an encumbrancer takes possession of, or a trustee, liquidator, receiver or similar officer is appointed in respect of, all or a substantial part of the business, assets or undertaking of the Issuer and/or the Obligor and is not paid out, withdrawn or discharged within thirty (30) days of such appointment; (vii) Judgment passed: the Issuer and/or the Obligor fails to satisfy any judgment passed against it by any court of competent jurisdiction and no appeal against such judgment or no application for a stay of execution has been made to any appropriate appellate court within the time prescribed by law or such appeal or application for a stay of execution has been dismissed; (viii) Composition: the Issuer and/or the Obligor convenes a meeting of its creditors or proposes or makes any arrangement including any scheme of arrangement or composition or begins negotiations with its creditors, or takes any proceedings or other steps, with a view to a rescheduling or deferral of all or any part of its indebtedness or a moratorium is agreed or declared by a court of competent jurisdiction in respect of or affecting all or any part of its indebtedness or any assignment for the benefit of its creditors (other than for the purposes of and followed by a reconstruction previously approved in writing by the Sukuk Page 22 of 37 {KSI / 01202562 v2}
23. . Trustee, unless during or following such reconstruction the Issuer and/or the Obligor becomes or is declared to be insolvent) or where a scheme of arrangement under Section 176 of the Companies Act 1965 has been instituted against the Issuer and/or the Obligor; (ix) Winding up: any step is taken for the winding up, dissolution or liquidation of the Issuer or the Obligor or a resolution is passed for the winding up of the Issuer or the Obligor or a petition for winding up is presented against the Issuer or the Obligor and the Issuer or the Obligor has not taken any action in good faith to set aside such petition within thirty (60) days from the date of service of such winding up petition or a winding up order has been made against the Issuer or the Obligor; (x) Assets: all or a material part of the property or assets of the Issuer and/or the Obligor shall be condemned, seized or otherwise appropriated or nationalized by any person acting under the authority of the Government of Malaysia that will have a material adverse effect on the Issuer’s and/or the Obligor’s obligations under the Sukuk Murabahah Programmes; (xi) Cessation/change of business: the Issuer and/or the Obligor changes or threatens to change the nature or scope of a substantial part of its business, or suspends or threatens to suspend, or cease or threatens to cease the operation of a substantial part of its business which it now conducts directly or indirectly and such change or suspension or cessation in the opinion of the Sukuk Trustee may have a material adverse effect on the Issuer’s and/or the Obligor’s obligations under the Sukuk Murabahah Programmes; (xii) Revocation of licenses and approvals: where there is a revocation, withholding or modification of any license, authorisation, approval or consent which in the opinion of the Sukuk Trustee may materially and adversely impair or prejudice the ability of the Issuer and/or the Obligor to comply with the terms and conditions of the Sukuk Murabahah or the Transaction Documents; Page 23 of 37 {KSI / 01202562 v2}
24. . (xii) Repudiation: the Issuer and/or the Obligor repudiates any of the Transaction Documents or the Issuer and/or the Obligor does or causes to be done any act or thing evidencing an intention to repudiate any of the Transaction Documents; (xiii) FSRA and PSRA: the Issuer fails to fund the FSRA and/or PSRA, up to the FSRA Minimum Required Balance or the PSRA Minimum Required Balance respectively in accordance with the Transaction Documents; (xiv) Insolvency: the Issuer and/or the Obligor is unable to pay its debt within the meaning of Section 218(2) of the Companies Act, 1965; and (xv) Any other events: Any other events as advised by the Legal Counsel and to be mutually agreed between the Lead Arranger and the Issuer. Upon the occurrence of an Event of Default, the Sukuk Trustee may, at its sole and absolute discretion, and shall, if so directed by an extraordinary resolution of the Sukukholders, declare (by giving notice in writing to the Issuer) that an Event of Default has occurred and that all amounts under the Sukuk Murabahah then outstanding be immediately due and payable, whereupon they shall become immediately due and payable, and that the Sukuk Trustee is entitled to enforce its rights under the Transaction Documents. (w) Covenants (i) Positive covenants Each of the Issuer and/or the Obligor covenants that for so long as any Sukuk Murabahah remain outstanding: (i) Comply with all provisions of the Transaction Documents to which it is a party; (ii) Preserve and keep in force and effect all licenses, consents and rights (where applicable) necessary for the conduct of its business; (iii) Acquire and maintain the necessary insurance policies required by law to the satisfaction of the Sukuk Trustee and notify the Sukuk Trustee of any event which will or may give rise to any claim or right of action under the insurances; Page 24 of 37 {KSI / 01202562 v2}
25. . (iv) Execute all such further documents and do all such further acts reasonably necessary at any time or times to give further effect to the terms and conditions of the Transaction Documents; (v) Comply with all applicable and relevant laws and regulations with regards to the Sukuk Murabahah Programmes; (vi) The Issuer and the Obligor will exercise reasonable diligence in carrying out its business in a proper and efficient manner which should ensure, amongst others that all necessary approvals or relevant licenses are obtained; (vii) Notify the Sukuk Trustee immediately of: a) Any circumstances that has occurred that would materially prejudice the Issuer or the Obligor; b) Any claims against it which could have material adverse effect upon the ability of the Issuer or the Obligor to perform its obligations under the Transaction Documents to which it is a party and any action that the Issuer or the Obligor is taking in relation to such claims; c) Any change in the withholding tax position or taxing jurisdiction of the Issuer or the Obligor insofar it affects the payment obligations of the Issuer under the Transaction Documents; Any take-overs, mergers, acquisitions and divestments undertaken by the Issuer or the Obligor which may affect its financial or liquidity position; Any Events of Default; d) e) f) Any substantial change in the nature of the business of the Issuer or the Obligor; g) Any change in the utilisation of proceeds of the Sukuk Murabahah; h) Any right or remedy under the terms of the Trust Deed becomes immediately enforceable; and Page 25 of 37 {KSI / 01202562 v2}
26. . i) Any other matters that may materially prejudice the interest of the Sukukholders; (viii) Maintain and keep proper books and accounts at all times in compliance with applicable statutory requirements and in accordance with generally accepted accounting principles in Malaysia and provide the Sukuk Trustee and any person appointed by it e.g. auditors access to such books and accounts to the extent permitted by law; (ix) Maintain a paying agent in Malaysia and procure that paying agent to notify the Sukuk Trustee in the event the paying agent does not receive payment from the Issuer on the due dates as required under the Transaction Documents; (x) It shall open and maintain the required Designated Accounts in accordance with these principal terms and conditions; and (xi) Declare or pay any dividend on share capital to shareholders subject to: (a) financial covenants are not breached in the event prior and after the payment; or (b) no Event of Default has occurred or is continuing or would occur if such payment is made. The above positive covenants are not exhaustive and include any other customary covenants as may be advised by the Legal Counsel. (ii) Negative Covenants Each of the Issuer and/or the Obligor covenants that for so long as any Sukuk Murabahah remain outstanding, it will not (without the consent of the Sukuk Trustee or the Sukukholders and such consent shall not be unreasonably withheld): (i) Amend its Memorandum and Articles of Association in a manner inconsistent with the Transaction Documents to which it is a party and/or which have a material adverse effect on the Issuer’s or the Obligor’s ability to perform any of its obligations under the Transaction Documents; Page 26 of 37 {KSI / 01202562 v2}
27. . (iii) Information Covenants (ii) In relation to the Issuer, incur any further indebtedness for borrowed money whatsoever, save and except for the Sukuk Murabahah; (iii) In relation to the Issuer and the Obligor, create or permit to exist any security interest over all or any of its assets and/or business; (iv) Reduce or in any way alter (except by way of an increase) its authorised and issued paidup capital; (v) Enter into a transaction whether directly or indirectly with interested persons unless such transaction shall be on terms that are no less favourable to the Issuer or the Obligor than those which would have been obtained in a comparable transaction from persons who are not interested persons; (vi) Surrender, transfer, assign, relinquish or otherwise dispose any of its rights and interest under the Transaction Documents (except as permitted or required under the Transaction Documents); (vii) Dissolve its affairs or consolidate with or merge with other person; (viii) With respect to the Issuer only, carry on any business other than its authorized business in accordance with its obligations under the Transaction Documents; and (ix) Such other negative covenants as may be advised by the Legal Counsel. Each of the Issuer and/or the Obligor shall provide the Sukuk Trustee and, if required, the rating agency the following: (i) Half-yearly unaudited financial statements/ management accounts within 90 days from the end of each half-year; (ii) Year-end audited financial statements within 120 days from its financial year end, and such other information (financial or otherwise) as the Sukuk Trustee and rating agency may reasonably require from time to time; Page 27 of 37 {KSI / 01202562 v2}
28. . (iv) Financial Covenants (iii) Promptly, after receipt of such request by the Sukuk Trustee and/or the rating agency, any other information relating to its business, affairs and financial condition as may from time to time reasonably requested by the Sukuk Trustee and/or the rating agency in order to discharge its duties and obligations as Sukuk Trustee and/or the rating agency from time to time, to the extent permitted by law; (iv) Promptly, any notices, circulars and other documents dispatched by the Issuer and Obligor to its shareholders; and (v) Within 120 days after each of its financial year end, a certificate confirming that the Issuer and Obligor have complied with all its obligations under the Transaction Documents and is not in breach of any of them and no Event of Default has occurred since the date of the issue of the Sukuk Murabahah or the date of the previous certificate, as the case may be. (1) Finance to Equity Ratio (“F:E Ratio”) Throughout the tenure of the Sukuk Murabahah Programmes, the Obligor shall ensure that its F:E Ratio shall not exceed 1.50 times. The F:E Ratio is the ratio of indebtedness of TSH Group represented by: (i) the aggregate principal amounts outstanding under the Sukuk Murabahah Programmes; (ii) all other outstanding external borrowings, both conventional and Islamic financing, secured and unsecured; and (iii) all outstanding redeemable secured and unsecured, loan stocks, to TSH Group’s shareholders’ funds, loan stocks (that are irredeemable and convertible) plus loans advances from shareholders or directors that are subordinated to the Sukuk Murabahah. Page 28 of 37 {KSI / 01202562 v2}
29. . (2) Finance Service Cover Ratio (“FSCR”) TSH Group shall maintain an annual FSCR of not less than 1.75 times throughout the tenure of the Sukuk Murabahah Programmes. The FSCR is the ratio of cumulative Available Cash Flow (as defined below) to the aggregate of all net indebtedness (principal plus profit/interest), in respect of borrowed money due during the financial year, which include the profit and principal payment under the Sukuk Murabahah Programmes. Available Cash Flow during a financial year is the sum of: (i) All revenue received (including interest/profits from placement of deposits or permitted investments and dividends); (ii) All cash and bank balances (including the Designated Accounts, permitted investments, and cash deposits) brought forward from the preceding financial year; (iii) Proceeds from insurance claims, if any; (iv) All drawdowns from borrowings made during the financial year; and (v) All capital advances, injection and shareholders’ Less (for the same relevant period): (i) General, Operating and Capital Expenditure; (ii) Tax paid. The F:E Ratio and FSCR shall be calculated on a yearly basis based on the latest annual audited consolidated accounts of TSH Group. The calculation of the F:E Ratio and FSCR shall be duly confirmed by the TSH’s external auditor on an annual basis. The Issuer shall arrange for the external auditor’s confirmation to be forwarded to the Sukuk Trustee. For the avoidance of doubt, any double counting shall be disregarded. Page 29 of 37 {KSI / 01202562 v2}
30. . (x) Provisions on buyback and early redemption of sukuk Redemption on maturity Unless previously redeemed or purchased and cancelled, the Sukuk Murabahah shall be redeemed by the Issuer at 100% of their nominal value on their respective maturity dates. Early redemption The Issuer may early redeem the Sukuk Murabahah in whole, but not in part, at 100% of their aggregate nominal value plus accrued profit based on terms to be mutually agreed between the Issuer and the Sukukholders by an extraordinary resolution. Buy-back The Issuer or any of its subsidiaries or agents who is acting for the purchase, may at any time prior to the maturity of the Sukuk Murabahah, purchase the Sukuk Murabahah by private treaty, but such repurchased Sukuk Murabahah shall be cancelled and cannot be resold. If purchased by the Issuer’s Interested Person (as defined in item 2(y)(ix) below), the Sukuk Murabahah need not be cancelled but they will not entitle such Interested Person to vote at any Sukukholders’ meeting. Ibra’ Ibra’ as defined in the Resolutions of Shariah Advisory Council of the Securities Commission Malaysia (as of 31 December 2014) refers to an act of releasing absolutely or conditionally one’s rights and claims on any obligation against another party which would result in the latter being discharged of his/its obligation or liabilities towards the former. The release may be either partially or in full. In the case of an Early Redemption, the ibra’ shall be based on a formula which is to be mutually agreed between the Issuer and the Sukukholders. The Sukukholders in subscribing or purchasing the Sukuk Murabahah consent to grant an ibra’ to the Issuer, if the Sukuk Murabahah are redeemed before the maturity date, upon the declaration of an Event of Default. Page 30 of 37 {KSI / 01202562 v2}
31. . In the case of a declaration of an Event of Default, the ibra’ shall be the unearned profit due to the Sukukholders from the date of the declaration of the Event of Default up to the maturity date of Sukuk Murabahah, as calculated by the Facility Agent. The redemption amount payable (“Redemption Amount”) by the Issuer on the declaration of an Event of Default is an amount as determined by the Facility Agent, which shall be calculated in accordance with the formula below: Redemption Amount = Deferred Sale Price determined at the Issue Date less the aggregate of Periodic Payments paid (if any) prior to the declaration of an Event of Default less the ibra’ “Issue Date” means in relation to any Sukuk Murabahah, the date on which the Sukuk Murabahah are issued, which date shall fall on a business day. (y) Other principal terms and conditions for the issue (i) Status and Ranking The Sukuk Murabahah issued under the Sukuk Murabahah Programmes shall constitute direct, unsubordinated, unconditional and unsecured 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. (ii) Form and Denomination Form Each tranche (which may be further sub-divided into series of different maturities) of the Sukuk Murabahah shall be represented by a global certificate to be deposited with BNM and shall be in bearer form. No physical delivery of the Sukuk Murabahah is permitted. The Sukuk Murabahah shall be prescribed and be reported under the rules of MyClear and shall comply with all rules and requirements set out by MyClear. Denomination Each Sukuk Murabahah certificate shall be issued in denomination and multiples of RM1,000,000 if issued through the rules of MyClear or such other denominations as shall be agreed upon between the Lead Arranger and the Issuer. Page 31 of 37 {KSI / 01202562 v2}
32. . (iii) Transaction Documents The Sukuk Murabahah Programmes evidenced, inter alia, by the following: shall be (i) Programme Agreement; (ii) Trust Deed; (iii) Deed of Covenant (by the Obligor); (iv) Agency Agreement; (v) CTP Purchase Agreement; (vi) CTP Sale Agreement; (vii) Other Commodity documents; (viii) Securities Lodgement Form; and (ix) 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 Sukuk Murabahah Programmes. Murabahah transaction (iv) 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 or on behalf of Malaysia or 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 payer shall 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. (v) Governing Law and Jurisdiction Laws of Malaysia. The Issuer shall unconditionally and irrevocably submit to the exclusive jurisdiction of the courts of Malaysia. (vi) Costs and Expenses All legal fees, stamp duties (if any) and reasonable expenses incurred in connection with the Sukuk Murabahah, including professional due diligence fees and fees payable to BNM, SC and the rating agency, where applicable shall be for the account of the Issuer. (vii) Trust Deed The Sukuk Murabahah shall be constituted by a trust deed, which shall be administered by the Sukuk Trustee acting on behalf of the Sukukholders. The trust deed shall be in compliance with the Trust Deeds Guidelines issued by the SC effective 12 August 2011 (“Trust Deeds Guidelines”). Page 32 of 37 {KSI / 01202562 v2}
33. . (viii) Permitted Investments The Issuer shall be permitted from time to time to utilise the funds held in the Designated Accounts to make Permitted Investments or make other investments subject to a maximum tenure of twelve months and provided that such funds utilised for Permitted Investments shall be remitted to the respective Designated Accounts, as the case may be, at least five (5) business days before any payment obligations of the Issuer become due and payable. Permitted Investments shall comprise Shariahcompliant investments allowed by the Shariah Advisory Council (“SAC”) of the SC and BNM and/or other recognised Shariah advisory authorities which shall include the followings: a) Sukuk guaranteed by Government of Malaysia (GOM); b) Sukuk issued in Malaysia by any authority established by GOM or any state government; c) Shariah-compliant treasury bills, money market instruments and other fixed income instruments issued by BNM or GOM; d) Mudharabah, wadiah and other deposits, Islamic acceptance bills, bankers’ acceptance or promissory notes or certificates of deposit issued by any licensed financial instituition (as defined in the Financial Services Act 2013 and Islamic Financial Services Act 2013) with a minimum long term rating of at least AA-/AA3 or its equivalent and short term rating of at least MARC-1/P1 or its equivalent; e) Trust funds with investments in any of the abovementioned instruments, as approved by the SC; and f) Islamic money market instruments (including dedicated sole purpose unit trust funds which invest in Islamic money market established in Malaysia and regulated by the SC), Provided however that such investments in sukuk which are equities in nature or incorporate losssharing mechanism shall not be allowed. For avoidance of doubt, upon the occurrence of an Event of Default, no Permitted Investments are allowed to be made. Page 33 of 37 {KSI / 01202562 v2}
34. . (ix) Interested Person The Sukuk Murabahah held by the Issuer or any interested person of the Issuer shall not be counted for purposes of voting at any meeting of Sukukholders. The interested person shall include directors, major shareholders and chief executive as defined under the Trust Deeds Guidelines but will not include the categories of major shareholders as provided under the exception in paragraph 22.04 of the Trust Deeds Guidelines. (x) Other conditions The Sukuk Murabahah shall at all times be governed by the guidelines issued and to be issued from time to time by the SC, BNM and/or MyClear having jurisdiction over matters pertaining to the Sukuk Murabahah. (xi) Trustees’ Reimbursement Account The Issuer shall open and maintain an account designated as “Trustees Reimbursement Account for Sukukholders’ Actions” (as required under the Trust Deeds Guidelines), in which a sum of RM30,000 from the monies received by the Issuer when the Sukuk Murabahah are issued, are to be deposited. The Trustees’ Reimbursement Account 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 events of default or enforcement events which are provided in the trust deed. The sum of RM30,000 in the Trustees’ Reimbursement Account shall be maintained at all times throughout the tenure of the Sukuk Murabahah Programmes. (xii) Minimum level of subscription (RM or %) The minimum level of subscription for each issuance of the ICPs and/or the IMTNs shall be 10% of the issue size of each ICPs and/or IMTNs. In respect of each issuance of the ICPs and/or the IMTNs, the issue will be aborted should the minimum level of subscription is not met. The Issuer shall return all considerations received to the Sukukholders. (xiii) Ta’widh (Compensation) In the event of delay in payment of the Deferred Sale Price under the Sukuk Murabahah, the Issuer shall pay to Sukukholders compensation on such overdue amounts at the rate and manner prescribed by the SAC of the SC from time to time. Any compensation referred to above which is paid to the Sukukholders, can be treated and/or utilised by the Sukukholders at their absolute discretion in accordance with or determined by their respective Shariah requirements, which may include donation to any registered charitable organization or for any charitable purposes Page 34 of 37 {KSI / 01202562 v2}
35. . Appendix 1 Overview of Transaction Structure 1d. FA as the sub-purchase agent purchases the commodities on behalf of the Sukukholders 1b. Issuer appoints FA as the sub-purchase agent to purchase the commodities 2b. Pays the Purchase Price 2a. Proceeds 2b. Proceeds Facility Agent Commodity 2b. Commodities (as SubPurchase Vendor A Agent) 4a. Commodity Vendor B 4b. Sale of commodities on spot basis at Purchase Price Pays for the commodities on spot basis at Purchase Price Bursa Suq Al Sila’ 5. Issuer pays on deferred payment basis Issuer (as Purchase Agent) Sukuk holders 1a. Issuer appointed as Purchase Agent by Sukukholders through Trustee 4a. FA as the sale agent sells the commodities on behalf of TSH 1c. Issues Purchase Order with Undertaking to Purchase 4b. Proceeds from the sale of the commodities (i.e. Purchase Price) 2a. Issues Sukuk Sukuk Trustee 5. TSH pays on deferred payment basis TSH (as Purchaser) 3. Sells the commodities to TSH at Deferred Sale Price RM account with Malaysian bank Flow of proceeds: (a) From issuance of Sukuk Murabahah is illustrated from 2a to 2b. (b) From sale of commodities by TSH (through the sale agent) is illustrated from 4a to 4b. Page 35 of 37 {KSI / 01202562 v2}
36. . 1a) The Issuer will be appointed by the Sukukholders (through the Sukuk Trustee), as the purchase agent (the “Purchase Agent”) for the Sukukholders, for the purchase and sale of Shariah-compliant commodities. 1b) The Purchase Agent will enter into a Purchase Agency Agreement to appoint the Facility Agent as the sub-purchase agent (the “Sub-Purchase Agent”) for the purchase of Shariah-compliant commodities. 1c) The Issuer (in its capacity as the Purchase Agent), TSH (in its capacity as the purchaser for itself) and the Sub-Purchase Agent will enter into the Commodity Murabahah Agreement (the “Commodity Murabahah Agreement”) which documents the sale and purchase of the commodities under the Shariah principle of Murabahah. Pursuant to the Commodity Murabahah Agreement, prior to the date on which the relevant tranche of Sukuk Murabahah is issued, TSH (in its capacity as purchaser for itself) shall from time to time, issue a purchase order (“Purchase Order”) in relation to the said tranche to the Purchase Agent. In the Purchase Order, TSH (in its capacity as purchaser for itself) will request the Purchase Agent to purchase the Shariah-compliant commodities and will irrevocably undertake to purchase the Shariah-compliant commodities from the Sukukholders (through the Sub-Purchase Agent). 1d) Based on the Purchase Order, the Purchase Agent (through the Sub-Purchase Agent) will purchase the Shariah-compliant commodities on behalf of the Sukukholders from a commodity vendor (the “Commodity Vendor A”) through Bursa Suq Al-Sila’ on spot basis at a price (“Purchase Price”). The Purchase Price shall be in compliance with the assets pricing requirements under the Guidelines on Sukuk (revised and effective on 28 August 2014) issued by the Securities Commission Malaysia (“SC”) (“Guidelines on Sukuk”) as may be replaced, substituted or revised from time to time. 2a) The Issuer shall issue Sukuk Murabahah to the Sukukholders to raise proceeds to fund the payment of the Purchase Price which proceeds raised from the issuance of Sukuk Murabahah shall be for an amount equal to the Purchase Price and the proceeds thereof shall be used to pay the Purchase Price of the Shariah-compliant commodities. The Sukuk Murabahah shall evidence the Sukukholders’ undivided beneficial ownership in the Shariah-compliant commodities and the Sukukholders’ entitlement to receive the deferred sale price subsequently upon the Shariah-compliant commodities being sold to TSH (acting as purchaser for itself) (“Deferred Sale Price”). The Deferred Sale Price is comprised of the Purchase Price plus a mark-up profit or, if applicable, the Discounted Amount payable on a deferred payment basis. 2b) Proceeds from the Sukuk Murabahah issuance shall be utilised towards payment of the Purchase Price due and payable to the Commodity Vendor A. 3) Thereafter, pursuant to the Commodity Sale Agreement, the Sub-Purchase Agent shall sell the Shariah-compliant commodities to TSH (acting as purchaser for itself) at the Deferred Sale Price. Page 36 of 37 {KSI / 01202562 v2}
37. . 4a) Upon completion of such purchase by TSH (acting as purchaser for itself), pursuant to an on-sale agency agreement (“On-Sale Agency Agreement”), the Facility Agent (in such capacity, the sale agent of TSH) shall sell the Shariahcompliant commodities to a commodity vendor (the “Commodity Vendor B”) through the Bursa Suq Al-Sila’ on spot basis for a cash consideration equals to the Purchase Price. 4b) The Issuer, TSH and/or TSH’s subsidiaries shall utilise such proceeds for Shariah-compliant purposes. 5) During the tenure of the Sukuk Murabahah, for Sukuk Murabahah with periodic payments (“Periodic Payments”), upon receipt of the Periodic Payments from TSH as payment in and towards the Deferred Sale Price, the Issuer shall make Periodic Payments to the Sukuk Trustee (acting for the Sukukholders). Each such payment by TSH shall pro tanto reduce the Deferred Sale Price payable by TSH. On the date of maturity of the Sukuk Murabahah, all the then outstanding Deferred Sale Price shall be paid by the Issuer, upon receipt of such payment(s) from TSH, to the Sukuk Trustee, for the redemption of the Sukuk Murabahah, whereupon the Sukuk Murabahah shall be cancelled. For Sukuk Murabahah without Periodic Payments, the Issuer shall make a oneoff payment (“One-off Payment”), which shall be equivalent to the Deferred Sale Price to the Sukuk Trustee (acting for the Sukukholders) upon receipt of the same from TSH. Each such payment by TSH shall pro tanto reduce the Deferred Sale Price payable by TSH. On the date of maturity of the Sukuk Murabahah, all the then outstanding Deferred Sale Price shall be paid by the Issuer, upon receipt of such payment(s) from TSH, to the Sukuk Trustee, for the redemption of the Sukuk Murabahah, whereupon the Sukuk Murabahah shall be cancelled. Page 37 of 37 {KSI / 01202562 v2}