VS Capital Management Sukuk RM1 Billion - Principle Terms and Conditions

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1. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR DETAILS OF FACILITY/ PROGRAMME (1) Name of facility/ programme (2) One time issue or programme (3) ASEAN Sukuk Islamic medium term notes (“Sukuk Wakalah”) under the Islamic medium term notes programme (“Sukuk Wakalah Programme”) of up to RM1.0 billion in nominal value, based on the Shariah principle of Wakalah Bi Al-Istithmar Programme ☐ ASEAN Green Sukuk ☐ ASEAN Social Sukuk ☐ ASEAN Sustainability Sukuk ☒ Not ASEAN Sukuk (4) Shariah principles (for sukuk) (1) (2) (5) Facility description Underlying Transaction Wakalah Bi Al-Istithmar Murabahah (via Tawarruq arrangement) The issuance of each Tranche of the Sukuk Wakalah from time to time under the Sukuk Wakalah Programme shall be effected as follows: “Tranche” shall mean, any Sukuk Wakalah with the same issue date and the same Scheduled Dissolution Date (as defined below). Step 1 Pursuant to a Wakalah agreement entered into between the Sukuk trustee in respect of the Sukuk Wakalah (“Sukuk Trustee”) (acting on behalf of the holders of the Sukuk Wakalah (“Sukukholders”)) and VS Capital Management Sdn. Bhd. as the issuer (“Issuer”) (“Wakalah Agreement”), the Sukuk Trustee shall appoint the Issuer to act as its agent (“Wakeel”) to perform services which include investing the issue proceeds of the Sukuk Wakalah (“Sukuk Proceeds”) in the relevant Shariah-compliant Wakalah portfolio (“Wakalah Portfolio”) and management of the Wakalah Portfolio, in accordance with the Wakalah Agreement. The Wakeel shall invest the Sukuk Proceeds received from the Sukukholders into the relevant Wakalah Portfolio which shall comprise: (a) the Shariah-compliant general business of V.S. Industry Berhad (“V.S. Industry”) and its subsidiaries, and shall exclude all Shariah non-compliant activities (“Shariahcompliant Business”) which constitutes the business of manufacturing, assembling and sale of electronic and electrical products and plastic moulded components and parts, which will be based on proportionate basis via specific percentage (mal mushà); and 1 PUBLIC
2. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (b) Commodities (as defined in the section entitled “Other terms and conditions – Identified asset or Trust asset” below) (to be sold to the Issuer as the Buyer (as defined below) under the Shariah principle of Murabahah (via Tawarruq arrangement)) (“Commodity Murabahah Investment”). Step 2 The Issuer, in its capacity as Wakeel, shall declare a trust over the Trust Assets (as defined in the section entitled “Other terms and conditions – Transaction Documents”) (“Trust Assets”) for the benefit of the Sukukholders. The Issuer shall, from time to time, issue Sukuk Wakalah to the Sukukholders and the Sukukholders shall subscribe to the Sukuk Wakalah by paying the Sukuk Proceeds. The relevant Sukuk Wakalah shall represent the Sukukholders’ undivided and proportionate beneficial interest in the relevant Trust Assets. Step 3 Pursuant to an investment agreement entered into between the Wakeel and V.S. Industry (“Investment Agreement”), the Wakeel shall appoint V.S. Industry as the sub-wakeel or agent (“Investment Manager”), whereby the Investment Manager shall utilise at least 33% of the Sukuk Proceeds of the relevant Sukuk Wakalah for investment into the Shariah-compliant Business, subject to the valuation principles set out in the Wakalah Agreement, which is equal to (i) net tangible assets of the Shariah-compliant Business of V.S. Industry Group (as defined below in the section entitled “Details of Covenants – Negative Covenants” below) (based on V.S. Industry’s latest available audited accounts), or (ii) other acceptable valuation principles to be agreed by the Issuer and the Shariah Adviser and does not need to be maintained throughout the tenure of the Sukuk Wakalah. The Investment Manager shall manage the Shariah-compliant Business for the benefit of the Sukukholders. The ownership of the Shariah-compliant Business allocated for the relevant Wakalah Portfolio shall be on pro rata basis which refers to joint beneficial ownership over the Shariah-compliant Business on undivided and proportionate basis, thus entitling the Sukukholder(s) to the share of income in the Shariah-compliant Business based on their proportionate beneficial ownership. For the avoidance of doubt, (i) the above ratio of at least 33% of the Sukuk Proceeds is only applicable at the point of initial investment for each issuance of the Sukuk Wakalah and does not need to be maintained throughout the tenure of such Sukuk Wakalah. However, the Wakeel shall ensure that the Shariah-compliant Business shall at all times be a component of the Wakalah Portfolio; and (ii) the Sukukholders shall via the trust deed for the Sukuk Wakalah Programme (“Trust Deed”) provide their upfront consent to the Issuer/V.S. Industry to create further trusts over the Shariahcompliant Business (“Future Trusts”) to facilitate any transactions 2 PUBLIC
3. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR undertaken in connection with any proposed Islamic financing facilities to be obtained by the Issuer/V.S. Industry, so long as the interest in the Future Trusts do not overlap with the interest of the Sukukholders in the Shariah-compliant Business under the Wakalah Portfolio. “V.S. Industry Group” means V.S. Industry Berhad and its subsidiaries from time to time. Step 4 The remaining balance of the Sukuk Proceeds shall be invested by the Wakeel into the Commodity Murabahah Investment. Pursuant to the Commodity Murabahah Investment agreement (“Commodity Murabahah Investment Agreement”) entered into between the Issuer in its capacity as the buyer (“Buyer”), the Wakeel and the Sukuk Trustee, the Commodity Murabahah Investment shall be effected as follows: (a) The Buyer shall issue a purchase order to the Wakeel and the Sukuk Trustee (both acting on behalf of the Sukukholders) (“Purchase Order”) with an irrevocable and unconditional undertaking to purchase the Commodities from the Wakeel (acting on behalf of the Sukukholders) at the Deferred Sale Price (as defined below). (b) Pursuant to the Purchase Order, the Wakeel (acting on behalf of the Sukukholders), via the commodity trading participant (“CTP”), will purchase the Commodities on spot basis from the commodity supplier(s) at Bursa Suq Al-Sila’ and/or an independent commodity broker acceptable to the SA which will be identified at or around the time of each issuance of the Sukuk Wakalah (“Commodity Supplier”) at a commodity purchase price equivalent to the remaining balance of the Sukuk Proceeds (“Commodity Purchase Price”). The Commodity Purchase Price shall be in line with the asset pricing requirements stipulated under the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework issued by the SC on 9 March 2015, effective on 15 June 2015 and revised on 30 June 2022 (as amended from time to time) (“LOLA Guidelines”). (c) Upon acquiring the Commodities, the Wakeel (acting on behalf of the Sukukholders), via the CTP, will immediately sell those Commodities to the Buyer via a sale and purchase agreement (“Sale and Purchase Agreement”), for a sale price equivalent to the Commodity Purchase Price plus the profit margin and shall be payable on a deferred payment basis (“Deferred Sale Price”). For the avoidance of doubt, the Deferred Sale Price shall be equal to the aggregate of the Expected Periodic Distribution Amount (as defined in the section entitled “Other terms and conditions – Expected Periodic Distribution Amount” below), if any, and the nominal value of the relevant Sukuk Wakalah; 3 PUBLIC
4. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (d) Upon completion of such purchase of the Commodities under item (c) above, the Buyer, via the CTP, will immediately sell the Commodities to Bursa Malaysia Islamic Services Sdn Bhd and/or an independent commodity broker acceptable to the SA which will be identified at or around the time of each issuance of the Sukuk Wakalah (“Commodity Buyer”) on spot basis for cash, at a selling price equivalent to the Commodity Purchase Price (“Selling Price”). Step 5 Returns generated from the Wakalah Portfolio up to the Expected Periodic Distribution Amount shall be distributed periodically in the form of periodic distributions (“Periodic Distributions”, and each a “Periodic Distribution”). On i) each periodic distribution date; ii) the maturity date of the relevant Sukuk Wakalah (“Scheduled Dissolution Date”); or iii) the Dissolution Declaration Date (as defined in the section entitled “Events of default or enforcement event, where applicable, including recourse available to investors“ below) as the case may be, any returns in excess of the Expected Periodic Distribution Amount distributable and/or the Dissolution Distribution Amount (as defined in the section entitled “Other terms and conditions – Dissolution Distribution Amount” below) due and payable under the Sukuk Wakalah shall be retained by the Investment Manager as an incentive fee for its services in managing the Shariah-compliant Business under the Wakalah Agreement. Step 6 The Issuer as the obligor (“Obligor”) shall grant a purchase undertaking to the Sukuk Trustee (for the benefit of the Sukukholders) (“Purchase Undertaking”), whereby (i) a Scheduled Dissolution Date; or (ii) Dissolution Declaration Date, the Obligor undertakes to purchase the relevant Sukukholders’ undivided and proportionate beneficial interest in the Shariah-compliant Business at the relevant Exercise Price in relation to the Purchase Undertaking (as set out in the section entitled “Other Terms and Conditions – Exercise Price in relation to the Purchase Undertaking”) and enter into a sale agreement (“Sale Agreement”) with the Sukuk Trustee for such purchase. Step 7 Proceeds of the Wakalah Portfolio being the Exercise Price pursuant to the Purchase Undertaking, outstanding Deferred Sale Price (subject to Ibra’ (as defined in the section entitled “Ibra’”)) and any returns from the Shariah-compliant Business shall be paid: to the relevant Sukukholders to redeem the Sukuk Wakalah on the (i) Scheduled Dissolution Date or (ii) the Dissolution Declaration Date. 4 PUBLIC
5. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR Any excess above the Dissolution Distribution Amount shall be waived by the Sukukholders and shall be retained by the Investment Manager as incentive fee upon full redemption of the relevant Sukuk Wakalah. Upon full payment of all amounts due and payable under the relevant Sukuk Wakalah, the relevant trust in respect of the Trust Assets will be dissolved and the relevant Sukuk Wakalah held by the relevant Sukukholders will be cancelled. Step 8 V.S. Industry as the guarantor (“Guarantor”), pursuant to an unconditional and irrevocable corporate guarantee (under the Shariah principle of Kafalah) (“Corporate Guarantee”) shall guarantee in favour of the Sukuk Trustee (for and on behalf of the Sukukholders) as a continuing obligation as principal debtor: (i) the full, prompt and complete observance and performance by the Issuer of all the terms of the Transaction Documents; and (ii) the punctual payment of all amounts due and payable by the Issuer under the Sukuk Wakalah and under the Transaction Documents, including the Deferred Sale Price, Exercise Price, Dissolution Distribution Amount, any payment obligation in respect of Ta`widh (compensation) and all fees, expenses and charges in relation to the Sukuk Wakalah issued and to be issued under the Sukuk Wakalah Programme (the “Guaranteed Sums”). For avoidance of doubt, the Guarantor shall not guarantee the expected returns from the Shariah-compliant Business. The Corporate Guarantee is immediately enforceable, from time to time, whether or not a Dissolution Event has been declared in the event that the Issuer fails to pay any amount then due and payable under the Sukuk Wakalah and/or the Transaction Documents, whereby the Guaranteed Sums shall be payable by the Guarantor on demand. Sustainability-Linked Sukuk Wakalah and/or Sustainability Sukuk Wakalah In the event the Issuer proposes to issue the Sukuk Wakalah which is in compliance with any one or more of the relevant standards, principles, guidelines or frameworks, as amended from time to time, including but not limited to: (a) the Sustainability-Linked Bond Principles by the International Capital Market Association (“ICMA”); (b) such guidelines or frameworks or standards introduced / issued from time to time by the ASEAN Capital Markets Forum (“ACMF”) and/or the SC and/or which are adopted by the SC into the LOLA Guidelines from time to time or such other related guidelines or frameworks or standards, whether or not having the force of law, in relation to sustainability-linked bonds issued from time to time; 5 PUBLIC
6. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR ((a) and (b) above are collectively referred to as the “SustainabilityLinked Principles” and the Sukuk Wakalah issued under the Sustainability-Linked Principles shall be referred to as “Sustainability-Linked Sukuk Wakalah”. References to Sukuk Wakalah shall include the Sustainability-Linked Sukuk Wakalah unless otherwise specified). (c) the Sustainable and Responsible Investment Sukuk Framework pursuant to the LOLA Guidelines; (d) the ASEAN Green Bond Standards issued by the ACMF; (e) the ASEAN Social Bond Standards issued by the ACMF; (f) the ASEAN Sustainability Bond Standards issued by the ACMF; (g) the Green Bond Principles issued by the ICMA; (h) the Social Bond Principles issued by the ICMA; (i) the Sustainability Bond Guidelines issued by the ICMA; and (j) such other standards, principles, guidelines or frameworks as may be incorporated by the SC into the LOLA Guidelines from time to time or such other standards, principles, guidelines or frameworks, whether or not having the force of law, in relation to the Sustainability Sukuk Wakalah (as defined herein) as may be issued from time to time, ((c) to (j) are collectively referred to as the “Sustainability Guidelines/ Framework”, and the Sukuk Wakalah issued under such Sustainability Guidelines/Framework shall be referred to as “Sustainability Sukuk Wakalah”) under the Sukuk Wakalah Programme, the Issuer shall, or shall procure the PA/LA of the Sukuk Wakalah Programme to: (1) submit the relevant terms of such Sustainability-Linked Sukuk Wakalah and/or Sustainability Sukuk Wakalah to the SC for endorsement of the SC’s SAC; (2) once endorsement of the SC’s SAC has been obtained, ensure that the requirements for post-issuance revision under the LOLA Guidelines are complied with; and (3) amend the relevant Transaction Documents to cater for the issuances of Sustainability-Linked Sukuk Wakalah and/or Sustainability Sukuk Wakalah. The Sukukholders shall be deemed to have consented to such amendments and issuances of the Sustainability-Linked Sukuk Wakalah and/or Sustainability Sukuk Wakalah by the Issuer, and no further consent is required from the Sukukholders, the Sukuk Trustee, or any other party under the Sukuk Wakalah Programme. For the avoidance of doubt, the Issuer will still need to obtain the 6 PUBLIC
7. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR required consent for other revisions or amendments unless otherwise specified in this Lodgement. The transaction structure of the Sukuk Wakalah Programme is set out in the attachment entitled “Diagram and description on the transaction structure of the Sukuk Wakalah Programme”. (6) Currency type Ringgit Malaysia. (7) Expected facility/ programme size Up to Ringgit Malaysia One Billion (RM1,000,000,000.00). (8) Option to upsize Yes. Additional Notes: The Issuer has the option to upsize the limit of the Sukuk Wakalah Programme at any time subject to the following being fulfilled prior to the exercise of the option to upsize by the Issuer: (i) where relevant, the consents from existing financiers/lenders of the Issuer being obtained; (ii) confirmation from the credit rating agency that the proposed upsizing will not result in any adverse impact on the prevailing credit rating of the Sukuk Wakalah Programme; (iii) the compliance with the relevant guidelines as may be issued by the SC from time to time including the LOLA Guidelines; and (iv) such other terms and/or conditions as may be advised by the Solicitors, if any. The Sukukholders shall be deemed to have consented to such upsizing of the limit of the Sukuk Wakalah Programme in the Trust Deed. No further consent will be required from the Sukuk Trustee, the FA or any other party under the Sukuk Wakalah Programme when the upsizing of the limit of the Sukuk Wakalah Programme is exercised by the Issuer. (9) Tenure of facility/ programme (10) Availability period of debt or sukuk programme (11) Clearing & settlement platform(s) (12) Mode(s) of issue Perpetual. The Sukuk Wakalah shall be available for issuance upon fulfilment of the conditions precedent of the Sukuk Wakalah Programme to the satisfaction of the PA/LA (unless otherwise waived or deferred by the PA/LA) provided that the first issuance of Sukuk Wakalah under the Sukuk Wakalah Programme shall be made within ninety (90) business days from the date of lodgement of the required information and documents relation to the Sukuk Wakalah Programme with the SC or such other extended period as may be granted by the SC. BNM or its successors-in-title or successor in such capacity, in relation to the Sukuk Wakalah Programme.   Book building. Bought deal. 7 PUBLIC
8. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR  (13) Selling restrictions Private/direct placement. (i) At Issuance ☐ ☐ ☐ ☒ ☐ ☒ ☒ Exclusively to persons outside Malaysia Part I of Schedule 6 of the CMSA Part I of Schedule 7 of the CMSA Read together with Schedule 9 of CMSA Schedule 8 of CMSA Section 2(6) of the Companies Act, 2016 Other: Please refer to Additional notes on selling restrictions below. (ii) After Issuance ☐ ☐ ☒ ☐ ☒ ☒ Exclusively to persons outside Malaysia Part I of Schedule 6 of the CMSA Read together with Schedule 9 of CMSA Schedule 8 of CMSA Section 2(6) of the Companies Act, 2016 Other: Please refer to Additional notes on selling restrictions below. Additional Note: Selling Restrictions at issuance The Sukuk Wakalah may only be offered, sold, transferred or otherwise disposed of, directly or indirectly, to persons to whom an offer or invitation to subscribe the Sukuk Wakalah may be made and to whom the Sukuk Wakalah are issued would fall within: (i) section 2(6) of the Companies Act 2016; (ii) paragraph 1(a), (b) or (d) of Part I of Schedule 5; and (iii) Schedule 6 and Schedule 7 of the Capital Markets and Services Act 2007 (“CMSA”), read together with Schedule 9 or Section 257(3) of the CMSA, subject to any change in the applicable laws, order, regulation or official directive from time to time. Selling Restrictions after issuance The Sukuk Wakalah may only be offered, sold, transferred or otherwise disposed of, directly or indirectly, to persons to whom an offer or invitation to purchase the Sukuk Wakalah would fall within: (i) section 2(6) of the Companies Act 2016; (ii) paragraph 1(a), (b) or (d) of Part I of Schedule 5; and 8 PUBLIC
9. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (ii) Schedule 6 or Section 229(1)(b) of the CMSA, read together with Schedule 9 or Section 257(3) of the CMSA, subject to any change in the applicable laws, order, regulation or official directive from time to time. (14) Tradability and Tradable and transferable. transferability Tradable and transferable amount: RM1,000,000,000.00 Additional Notes: Tradable and transferable subject to the selling restrictions set out in the section entitled “Selling Restrictions”. (15) Details of security/ Unsecured. collateral pledged, if applicable (16) Details of guarantee, if Corporate Guarantee applicable The Guarantor pursuant to the Corporate Guarantee shall guarantee in favour of the Sukuk Trustee (for and on behalf of the Sukukholders) as a continuing obligation as principal debtor: (i) for the full, prompt and complete observance and performance by the Issuer of all the terms of the Transaction Documents; and (ii) for the punctual payment of the Guaranteed Sums. For avoidance of doubt, the Guarantor shall not guarantee the expected returns from the Shariah-compliant Business. The Corporate Guarantee is immediately enforceable, from time to time, whether or not a Dissolution Event has been declared in the event that the Issuer fails to pay any amount then due and payable under the Sukuk Wakalah and/or the Transaction Documents, whereby the Guaranteed Sums shall be payable by the Guarantor on demand. (17) Convertibility of issuance, Non-convertible. and details of the convertibility (18) Exchangeability of Non-exchangeable. issuance and details of the exchangeability (19) Call option and details, if No call option. applicable (20) Put option and details, if No put option. applicable (21) Details of covenants 9 PUBLIC
10. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (A) Positive Covenants To include but not limited to the following: The Issuer and the Guarantor covenants that for so long as any Sukuk Wakalah under the Sukuk Wakalah Programme remain outstanding, it shall: (i) the Issuer and the Guarantor shall maintain in full force and effect all relevant contracts, authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) and will promptly obtain any further authorisations, consents, rights, licences, approvals and permits (governmental and otherwise) which are or may become necessary to enable it to own its assets and/or to operate its business and/or to enable it to enter into and perform its obligations under the Transaction Documents to which it is a party and to ensure the validity, enforceability and admissibility in evidence of its obligations or the priority or rights of the Sukukholders under the Transaction Documents, and the Issuer and the Guarantor shall comply with the same; (ii) the Issuer and the Guarantor shall at all times on demand execute all such further documents and do all such further acts reasonably necessary at any time or times to give further effect to the terms and conditions of the Transaction Documents and the Sukuk Wakalah Programme; (iii) the Issuer and the Guarantor shall exercise reasonable diligence in carrying out its business and affairs in a proper and efficient manner and in accordance with sound financial and commercial standards and practices; (iv) the Issuer and the Guarantor shall do all things necessary to maintain its legal existence; (v) the Issuer and the Guarantor shall promptly perform and carry out all its obligations under all the Transaction Documents to which it is a party (including but not limited to redeeming the Sukuk Wakalah on the relevant Scheduled Dissolution Date or any other date on which the Sukuk Wakalah are due and payable) and ensure that it shall immediately notify the Sukuk Trustee in the event that it is unable to fulfil or comply with any of the provisions of the Transaction Documents to which it is a party; (vi) the Issuer and the Guarantor shall ensure that the provisions of the information memorandum relating to the Sukuk Wakalah Programme (“Information Memorandum”) do not contain any matter which is inconsistent with the provisions of the Transaction Documents and the terms and conditions of the Sukuk Wakalah; (vii) the Issuer and the Guarantor shall keep proper books and accounts at all times and prepare its financial statements on a basis consistently applied in accordance with approved accounting standards in Malaysia and those financial statements shall give a true and fair view of the results of the 10 PUBLIC
11. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR operations of the Issuer or the Guarantor for the period to which the financial statements are made and further, the Issuer and the Guarantor shall 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; (viii) the Issuer and the Guarantor shall promptly provide to the Sukuk Trustee, such information relating to the Issuer’s or the Guarantor’s business, affairs and financial condition as may be reasonably required from time to time by the Sukuk Trustee in order to discharge its duties and obligations as the Sukuk Trustee under the Transaction Documents, to the extent permitted by law; (ix) the Issuer and the Guarantor shall fully comply with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”), and shall comply with all other applicable laws, including the provisions of the CMSA, circulars, conditions or guidelines issued by the SC from time to time; (x) the Issuer shall maintain a paying agent in Malaysia in respect of payments in relation to the Sukuk Wakalah in accordance with the relevant laws and regulations and procure that the paying agent shall notify the Sukuk Trustee, through the FA, in the event that the paying agent does not receive payment from the Issuer on the due dates of the Sukuk Wakalah; (xi) the Issuer and the Guarantor shall obtain and maintain takaful/insurance over its insurable assets in such amounts and against such risks as (i) required by law; or (ii) which a prudent business carrying on business similar to that of the Issuer and the Guarantor would maintain; (xii) the Issuer shall ensure that any conditions subsequent (if any) in relation to the issuance of the Sukuk Wakalah are complied with in accordance with the terms and conditions of the Sukuk Wakalah and that any request from the Issuer to add, extend, vary or otherwise modify any conditions subsequent shall be subject to the approval of the relevant Sukukholders by way of an extraordinary resolution; (xiii) the Guarantor shall ensure that the Issuer remains its whollyowned subsidiary at all time; and (xiv) such other positive covenants as agreed between the Issuer, the Guarantor and the PA/LA. (B) Negative Covenants To include but not limited to the following, so long as any Sukuk Wakalah under the Sukuk Wakalah Programme remain outstanding: (i) the Issuer and the Guarantor shall not create or permit to exist any encumbrance, mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment by way of security, trust arrangement for the purpose of providing security or other security interest of any kind including, without 11 PUBLIC
12. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR limitation, title transfer and/or retention arrangements having a similar effect or any agreement to create any of the foregoing, but excluding liens or security interest created by the operation of law and those arising in the ordinary course of its business over any of its undertaking, property, assets, revenues or rights; (ii) the Guarantor shall not sell, transfer or disposal of any of its assets whether by a single transaction or a number of transactions, related or not, save and except where: (a) the asset disposal is in the ordinary course of business on ordinary commercial terms and on an arm’s length basis that will not result in a Material Adverse Effect; or (b) the asset disposal is solely for purposes of facilitating Shariah concepts used in Islamic financing facilities granted to the Guarantor, “Material Adverse Effect” means any event which may materially and adversely affect (1) the business, operations, assets, condition (financial or otherwise), prospects or cashflow of the Issuer or the Guarantor; or (2) the ability of the Issuer or the Guarantor to perform any of its obligations under any of the Transaction Documents; or (3) the legality, validity, binding nature, enforceability of, or the rights or remedies of any parties to the Transaction Documents. (iii) the Issuer shall not sell, transfer or dispose of any of its assets, whether by a single transaction or a number of transactions, related or not save for any disposal of the Trust Assets permitted by the terms of the Transaction Documents; (iv) the Issuer and the Guarantor shall not use the proceeds of the Sukuk Wakalah except for the purposes set out in the Transaction Documents and the Information Memorandum; (v) the Issuer and the Guarantor shall not permit any amendment, supplement or variation to its Constitution in a manner inconsistent with the provisions of the Transaction Documents or which will be materially prejudicial to the interest of the Sukukholders; (vi) the Issuer and the Guarantor shall not obtain or permit to exist any financing/loans or advances from its shareholders or directors unless these financing/loans and advances are subordinated to the Sukuk Wakalah; (vii) the Issuer and the Guarantor shall not enter into, commence or institute for the dissolution or winding up of the Issuer and the Guarantor or for the appointment of a receiver, receiver and manager, liquidator, judicial manager or such similar officer of the Issuer and the Guarantor or take any other steps to wind up or dissolve itself; 12 PUBLIC
13. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (viii) the Issuer and the Guarantor shall not reduce its issued paidup capital whether by varying the amount, structure or value thereof or the rights attached thereto or by converting any of its share capital into stocks, or by consolidating, dividing or sub-dividing all or any of its shares, or by any other manner; (ix) the Issuer shall not enter into any consolidation, merger or reconstruction; (x) the Guarantor shall not enter into any amalgamation, consolidation, merger or reconstruction which would be reasonably expected to result in a Material Adverse Effect; (xi) the Issuer shall not create, incur, assume, or permit to exist any indebtedness save for (i) the Sukuk Wakalah issued under the Sukuk Wakalah Programme and (ii) financings/loans or advances from its shareholders or directors which are subordinated to the Sukuk Wakalah; (xii) the Issuer shall not provide or permit to exist any guarantee to any party; (xiii) the Guarantor shall not create, incur, assume, guarantee or permit to exist any indebtedness if such indebtedness results in, or would result in a breach of the financial covenant (as set out in the section below entitled “Details of Covenants – Financial Covenants”); (xiv) the Issuer and the Guarantor shall not cancel, surrender, abandon, transfer, assign, relinquish or otherwise dispose of any of its rights and interest under the Transaction Documents to which it is a party; (xv) the Issuer shall not change nor threaten to change the nature or scope of any part of its business, or suspend or threaten to suspend or cease or threaten to cease the operation of any part of its business which it now conducts directly or indirectly; (xvi) the Guarantor shall not change nor threaten to change the nature or scope of a substantial part of its business, or suspend or threaten to suspend or cease or threaten to cease the operation of a substantial part of its business which it now conducts directly or indirectly; amalgamation, (xvii) the Issuer shall not declare or pay any dividends to its shareholders; (xviii) the Guarantor shall not declare or pay any dividends to its shareholders if: (a) a Dissolution Event has occurred, and has not been waived or remedied, or if following such payment or distribution a Dissolution Event would occur; or (b) the financial covenant (as set out in the section entitled “Details of Covenants – Financial Covenants”) has been 13 PUBLIC
14. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR breached and such breach has not been waived or remedied; or will be breached if calculated immediately following such payment or distribution; (xix) the Guarantor shall not advance/lend any money to any party other than to (i) the Issuer’s and the Guarantor’s directors, officers or employees as part of their term of employment; and (ii) companies within the V.S. Industry Group (as defined below), in its ordinary course of business; (xx) the Issuer shall not enter into any contract, transaction or engage in any business or activity other than: (xxi) (a) the Transaction Documents to which it is party to; and (b) as provided for or permitted in the Transaction Documents; (c) the ownership, management and disposal of the Trust Assets as provided in the Transaction Documents; or (d) advancing proceeds of the Sukuk Wakalah issuance(s) to V.S. Industry and the subsidiaries within the V.S. Industry Group in connection with the Sukuk Wakalah Programme; the Issuer shall not have any subsidiaries or associates or equity investments; (xxii) in the event the Bursa Malaysia’s Main Market Listing Requirements are no longer applicable to the Issuer and/or Guarantor, the Issuer and/or Guarantor shall not enter into any agreement or transactions, whether directly or indirectly with interested persons (as defined in the Guidelines on Trust Deeds issued by the Securities Commission on 12 July 2011 and revised on 23 July 2020, as may be amended and/or substituted from time to time (“Guidelines on Trust Deeds”)) unless such agreement or transaction is entered into: (a) on terms that are not less favourable to the Issuer and/or Guarantor than those which could have been obtained in a comparable transaction from persons who are not interested persons; (b) with respect to transactions involving an aggregate payment or value equal to or greater than RM50,000,000, the Issuer and/or Guarantor obtains certification from an independent adviser that the transaction is carried out on fair and reasonable terms; PROVIDED that (1) in the case of (a) above, the Issuer and/or Guarantor certifies to the Sukuk Trustee that the transaction complies with paragraph (a), (2) in the case of (b) above, the 14 PUBLIC
15. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR Issuer and/or Guarantor has received the certification referred to in paragraph (b) (where applicable) and furnished the same to the Sukuk Trustee; and (3) in the case of (a) or (b) above, the transaction has been approved by the board of directors or shareholders in accordance with the Constitution of the Issuer and/or Guarantor as the case may require; and (xxiii) such other negative covenants as agreed between the Issuer, the Guarantor and the PA/LA. (C) Financial Covenants Financial covenant, details as follows: In respect of the Issuer: None. In respect of the Guarantor: Finance to Equity Ratio (“F:E Ratio”) The Guarantor shall maintain a F:E Ratio of not more than 1.25 times throughout the tenure of Sukuk Wakalah Programme. The F:E Ratio is the ratio of indebtedness of the Guarantor represented by: (a) all outstanding principal amount payable by the Issuer under the Sukuk Wakalah; and (b) all other indebtedness of the V.S. Industry Group for Islamic financing or borrowed monies (be it actual or contingent) for principal only, hire purchase obligations, finance lease obligations, fair value of financial derivatives in connection with borrowed monies recognised by the Guarantor in its audited consolidated financial statements and other contingent liabilities of the V.S. Industry Group calculated in accordance with the applicable accounting standards, but excluding any intercompany financing/loans which are subordinated to the Sukuk Wakalah, to the equity of the V.S. Industry Group including, if any, preference equity, subordinated shareholders’ advances/loans and retained earnings/losses less goodwill (if any). The F:E Ratio shall be calculated on a yearly and half yearly basis and as and when such calculations are required to be made under the terms of the Transaction Documents during the tenure of the Sukuk Wakalah Programme. In the case of F:E Ratio calculated on a yearly basis, such calculations shall be based on the latest audited consolidated financial statements of the Guarantor and in the case of F:E Ratio calculated at any other times, the calculations shall be based on the latest consolidated management accounts of the Guarantor. The calculations of the F:E Ratio shall be duly confirmed: 15 PUBLIC
16. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (a) in the case of F:E Ratio calculated based on audited consolidated financial statements, by the Guarantor’s external auditors; (b) in the case of F:E Ratio calculated based on consolidated management accounts, by the authorised officers of the Guarantor. The Guarantor shall arrange for its external auditors’ or authorised officer’s confirmation (as the case may be) to be forwarded to the Sukuk Trustee and the Credit Rating Agency (as defined in the section entitled “Section 1.04 Details of the Facility/Programme – Name of credit rating agency, credit rating (state whether final or indicative) and amount rated, if applicable”). For the avoidance of doubt, any double counting shall be disregarded. (D) Information Covenants To include but not limited to the following, so long as any Sukuk Wakalah under the Sukuk Wakalah Programme remain outstanding: (i) (ii) the Issuer shall deliver to the Sukuk Trustee the following: (a) as soon as they become available (and in any event within one hundred and eighty (180) days after the end of each of its financial year) copies of its audited financial statements for that year which shall contain income statements and balance sheets and which are audited by a firm of independent certified public accountants acceptable to the Sukuk Trustee; (b) as soon as they become available (and in any event within ninety (90) days after the end of the first half of its financial year) copies of its unaudited half yearly financial statements for that period which shall contain its income statements and its balance sheets which are duly certified by the authorised officers of the Issuer; (c) promptly, such additional financial or other information relating to its affairs, business and/or its operations as the Sukuk Trustee or the FA may from time to time request, including without limitation, such information as the Sukuk Trustee and the FA may require in in order to discharge its duties and obligations under the Transaction Documents, to the extent permitted by law; and (d) promptly, all notices or other documents received by the Issuer from any of its shareholders or its creditors which contents may materially affect the interests of the Sukukholders, and a copy of all documents dispatched by the Issuer to its shareholders (or any class of them) in their capacity as shareholders or its creditors generally at the same time as these documents are dispatched to these shareholders or creditors; the Guarantor shall deliver to the Sukuk Trustee the following: 16 PUBLIC
17. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (iii) (a) as soon as they become available (and in any event within one hundred and eighty (180) days after the end of each of its financial year) copies of its audited consolidated financial statements for that year which shall contain the consolidated income statements and consolidated balance sheets and which are audited by a firm of independent certified public accountants acceptable to the Sukuk Trustee; (b) as soon as they become available (and in any event within ninety (90) days after the end of the first half of its financial year) copies of its unaudited half yearly consolidated financial statements for that period (as announced quarterly to Bursa Malaysia) which shall contain the consolidated income statements and consolidated balance sheets which are duly certified by the authorised officers of the Guarantor; (c) promptly, such additional financial or other information relating to its affairs, business and/or its operations as the Sukuk Trustee or the FA may from time to time request, including without limitation, such information as the Sukuk Trustee and the FA may require in in order to discharge its duties and obligations under the Transaction Documents, to the extent permitted by law; and (d) promptly, all notices or other documents received by the Guarantor from any of its shareholders or its creditors which contents may materially affect the interests of the Sukukholders, and a copy of all documents dispatched by the Guarantor to its shareholders (or any class of them) in their capacity as shareholders or its creditors generally at the same time as these documents are dispatched to these shareholders or creditors; the Issuer and the Guarantor shall immediately notify the Sukuk Trustee in the event that the Issuer and/or the Guarantor becomes aware of: (a) any Dissolution Event or any event which, upon the giving of notice and/or lapse of time and/or the issue of a certificate and/or the fulfilment of the relevant requirements as contemplated under the relevant Transaction Documents to which it is a party would constitute a Dissolution Event (“Potential Dissolution Event”), and it shall take all steps and/or such other steps as may be requested by the Sukuk Trustee in writing to remedy and/or mitigate the effect of the Dissolution Event or Potential Dissolution Event; or (b) any substantial change in the nature of the business of the Guarantor; or (c) any change in the nature of the business of the Issuer; or 17 PUBLIC
18. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (d) any change in the name of the Guarantor; or (e) any cessation of liability of the Guarantor for the payment of the whole or part of the moneys for which the Guarantor was liable under the Corporate Guarantee; or (f) any change in withholding tax position or taxing jurisdiction of the Issuer or the Guarantor; or (g) any other matter that may materially prejudice the interest of the Sukukholders under the Transaction Documents; (iv) the Issuer and the Guarantor shall provide to the Sukuk Trustee at least on an annual basis, a certificate confirming that it has complied with all its obligations under the Transaction Documents and the terms and conditions of the Sukuk Wakalah and that there does not exist or had not existed, from the date of the Sukuk Wakalah were first issued or the date of the last certificate, as the case may be, any Dissolution Event or Potential Dissolution Event (as the case may be), and if such is not the case, to specify the same; (v) the Issuer shall promptly notify the Sukuk Trustee and the FA of any change in its directorship and shareholders and any other changes that may affect its business condition (financial or otherwise); (vi) the Guarantor shall promptly notify the Sukuk Trustee and the FA of any changes that may affect its business condition (financial or otherwise) as disclosed to its shareholders; (vii) if it becomes aware of the same, the Issuer shall promptly notify the Sukuk Trustee and the FA of any litigation or other proceedings of any nature whatsoever being threatened or initiated against the Issuer before any court or tribunal or administrative agency; (viii) if it becomes aware of the same, the Guarantor shall promptly notify the Sukuk Trustee and the FA of any litigation or other proceedings of any nature whatsoever being threatened or initiated against the Guarantor before any court or tribunal or administrative agency which would be reasonably expected to have a Material Adverse Effect; and (ix) such other information covenants as agreed between the Issuer, the Guarantor and the PA/LA. (22) Details of designated No designated account. account(s), if applicable (23) Name of credit rating agency, credit rating (state whether final or indicative) Credit Rating Agency MARC Ratings Berhad (“MARC”). Credit Rating 18 PUBLIC
19. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR and amount rated, if applicable AAIS Final/ Indicative rating Indicative. Amount rated RM1,000,000,000.00 (24) Conditions precedent To include but not limited to the following (all have to be in form and substance acceptable to the PA/LA): Main Documentation a) The Transaction Documents have been executed and stamped (or endorsed as exempted from stamp duty) and where applicable, presented for registration. Issuer and Guarantor Receipt of the following documents: (1) Certified true copies of the Certificate of Incorporation and the Constitution of the Issuer and the Guarantor; (2) Certified true copies of the latest Forms 24, 44 and 49 (or the equivalent forms under the Companies Act 2016) of the Issuer and the Guarantor; (3) A certified true copy of board resolution of the Issuer and the Guarantor authorising, among others, the establishment of the Sukuk Wakalah Programme and the issuance of the Sukuk Wakalah thereunder and the execution of the Transaction Documents; (4) A list of the Issuer’s and the Guarantor’s authorised signatories and their respective specimen signatures; (5) A report of the company search on the Issuer and the Guarantor conducted at the Companies Commission of Malaysia; and (6) A report of the winding up search on the Issuer and the Guarantor conducted at the Department of Insolvency of Malaysia confirming that at the time of such search, the Issuer and the Guarantor is not wound up. General (1) Acknowledgement in respect of the lodgement to the SC, receipt of endorsement from SC's SAC and the approvals from any other relevant authorities (if any) pursuant to any relevant guidelines issued by the SC or any other authorities having jurisdiction over matters pertaining to the Sukuk Wakalah Programme; (2) Confirmation from the Credit Rating Agency that the Sukuk Wakalah Programme has received the final rating of AAIS; 19 PUBLIC
20. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (3) Evidence that all transaction fees, costs and expenses have been or will be paid in full; (4) Documentary evidence that the Sukuk Trustee’s Reimbursement Account has been opened and Ringgit Malaysia One Hundred Thousand (RM100,000.00) has been deposited therein; (5) The PA/LA have received from their legal counsel a favourable legal opinion addressed to the PA/LA and the Sukuk Trustee advising with respect to, among others, the legality, validity and enforceability of the Transaction Documents and a confirmation addressed to the PA/LA that all the conditions precedent have been fulfilled; (6) Evidence of confirmation from the SA that the structure and mechanism of the Sukuk Wakalah Programme and the Transaction Documents are in compliance with Shariah; (7) Where applicable and if required, satisfactory evidence that all confirmations and consents (as the case may be) from the existing financiers, chargees, bank guarantors or assignees in respect of the Issuer's and the Guarantor’s existing indebtedness have been obtained for the Issuer to undertake the Sukuk Wakalah Programme and to issue the Sukuk Wakalah thereunder, and for the Guarantor to provide the Corporate Guarantee; (8) Documentary evidence that all legal due diligence in relation to the Sukuk Wakalah Programme have been undertaken and conducted to the reasonable satisfaction of the PA/LA; and (9) Such other conditions precedent as advised by the legal counsel of the PA/LA and agreed between the Issuer, the Guarantor and the PA/LA. (25) Representation and warranties The Issuer’s and the Guarantor’s representations and warranties shall include but not be limited to the following: (i) the Issuer is a company with limited liability, duly incorporated and validly existing under the laws of Malaysia, has full power to carry on its business and to own its property and assets, and to enter into, exercise its rights under and perform its obligations under the Transaction Documents, and has full beneficial ownership of all its assets; (ii) the Guarantor is a public listed company with limited liability, duly incorporated and validly existing under the laws of Malaysia, has full power to carry on its business and to own its property and assets, and to enter into, exercise its rights under and perform its obligations under the Transaction Documents, and has full beneficial ownership of all its assets; (iii) each of the Issuer’s and Guarantor’s Constitution incorporates provisions which authorise, and all necessary corporate and 20 PUBLIC
21. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR other relevant actions have been taken to authorise and all authorisations, consents, licences approvals and permits (governmental and otherwise), filings or registrations which are necessary to enable the Issuer and the Guarantor to own its assets, to carry on its business or are required or desirable for or in connection with the execution of the Transaction Documents to which it is a party and the performance of its obligations thereunder have been obtained, fulfilled or taken, and are in full force and effect; (iv) neither the execution and delivery of any of the Transaction Documents nor the performance of any of the transactions contemplated by the Transaction Documents did or does as at the date this representation and warranty is made or repeated: (a) contravene or constitute a default under any provision contained in any agreement, instrument, law, ordinance, decree, judgement, order, rule, regulation, licence, permit or consent by which itself or any of its assets is bound or which is applicable to it or any of its assets; (b) cause any limitation on itself or the powers of its directors, whether imposed by or contained in its constitution or in any agreement, instrument, law, ordinance, decree, order, rule, regulation, judgment or otherwise, to be exceeded; or (c) cause the creation or imposition of or oblige the Issuer or the Guarantor to create any security interest or restriction of any nature on any of its assets or undertakings pursuant to the provisions of any other contract, undertaking or instrument; (v) each of the Transaction Documents is or will, when executed and/or issued (as the case may be), be in full force and effect and constitutes (or will constitute, when executed and/or issued (as the case may be)) valid and legally binding obligations of the Issuer or the Guarantor enforceable in accordance with their respective terms; (vi) the Sukuk Wakalah have been duly authorised and when issued and delivered and authenticated as provided in the Transaction Documents, will be duly and validly issued and delivered and will constitute legal, valid and binding obligations of the Issuer under the Transaction Documents and will rank in accordance with the provisions set out in the section entitled “Other terms and conditions- Status”; (vii) all consent, authorisations or approvals of, or filings with, any government authority required in connection with the Corporate Guarantee by the Guarantor or the performance of the Guarantor’s obligations thereunder have been duly obtained and are in force and effect, and upon execution of the Corporate Guarantee, the Guarantor’s payment obligations thereunder will rank in accordance with the 21 PUBLIC
22. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR provisions set out in the section entitled “Other terms and conditions – Status”’; (viii) all consents, authorisations or approvals of, or filings with, any governmental authority required in connection with the issue or sale by the Issuer of the Sukuk Wakalah or the performance of the Issuer’s obligations thereunder or under the Transaction Documents have been duly obtained and are in full force and effect; (ix) there has been no material adverse change in the Issuer’s and the Guarantor’s business or condition (financial or otherwise) since the date of its last audited financial statements; (x) neither the Issuer nor the Guarantor nor its assets are entitled to immunity from process, execution, attachment or legal process; (xi) as of the date of issue thereof, the information contained in the Information Memorandum contains all information with respect to the V.S. Industry Group that is material in the context of the issue and offering of the Sukuk Wakalah (including all information required by applicable laws and the information that, according to the particular nature of the V.S. Industry Group and, is (i) necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the V.S. Industry Group and of the rights attaching to the Sukuk Wakalah), (ii) the statements contained in the Information Memorandum relating to the V.S. Industry Group are in every material particular true and accurate and not misleading, (iii) the opinions and intentions expressed in the Information Memorandum with regard to the V.S. Industry Group are honestly held, have been reached after considering all relevant circumstances and are based on reasonable assumptions, (iv) there are no other facts in relation to the V.S. Industry Group or the Sukuk Wakalah the omission of which would make any statement in the Information Memorandum misleading, (v) all reasonable enquiries have been made by the Issuer and/or the Guarantor to ascertain such facts and to verify the accuracy of all such information and statements and (vi) the Information Memorandum does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they are made, not misleading; (xii) save as disclosed in the Information Memorandum (if any), no litigation, arbitration, investigation, administrative proceeding or any other proceeding or claim which might by itself or together with any other such proceedings or claims, is presently in progress or pending or, to the best of its knowledge, information and belief threatened against the Issuer and/or the Guarantor or any of its assets and/or subsidiaries which would be reasonably expected to have a Material Adverse Effect; 22 PUBLIC
23. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (xiii) no step has been taken by or against the Issuer or the Guarantor nor has any legal proceeding been commenced or threatened for the dissolution, liquidation or winding up of the Issuer or the Guarantor or for the appointment of a receiver and/or manager, liquidator, judicial manager or similar officer in respect of all or any part of the business or assets of the Issuer or the Guarantor and no demand under Section 466(1)(a) of the Companies Act 2016 has been received by the Issuer or the Guarantor; (xiv) no step has been taken by the Issuer and/or the Guarantor, any of its shareholders, or, to the best of the Issuer’s and/or the Guarantor’s knowledge, its creditors or any other person on its behalf nor have any legal proceedings or applications been started or threatened under Section 366 of the Companies Act 2016 or any other corporate rescue mechanism under the Companies Act 2016; (xv) each of the Issuer and the Guarantor has fully disclosed in writing to the Sukuk Trustee, the PA/LA, the LM and the FA all facts relating to the Issuer and/or the Guarantor which the Issuer or the Guarantor knows or should reasonably know and which are material for disclosure to the Sukuk Trustee, the PA/LA, the LM and the FA in the context of the Sukuk Wakalah, and the Information Memorandum and information furnished by the Issuer and the Guarantor in connection with the Sukuk Wakalah Programme and the transactions contemplated under the Transaction Documents and its assets, business and affairs is true and not misleading and does not contain any material omission, and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful inquiry; (xvi) where applicable, the latest audited financial statements of the Issuer and the Guarantor have been prepared in accordance with the generally accepted accounting standards in Malaysia, which have been consistently applied and (in conjunction with the notes to such statements) present a true and fair view of the state of affairs of the Issuer and the Guarantor for the financial year ended on such date; (xvii) no extraordinary circumstances or change of law or other governmental action has occurred which shall make it improbable for the each of the Issuer and the Guarantor to observe and perform its covenants and obligations to be observed and performed under the Transaction Documents; and (xviii) such other representations and warranties as agreed between the Issuer, the Guarantor and the PA/LA. (26) Events of default or enforcement event, where applicable, including The dissolution events (“Dissolution Events”) shall include but are not limited to the following: 23 PUBLIC
24. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR recourse available to investors (i) The Issuer or the Guarantor fails to pay any amount due from it under any of the Transaction Documents when such payment is due and payable; (ii) any representation or warranty made or given by the Issuer and/or the Guarantor 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 Wakalah and/or any of the Transaction Documents proves to have been incorrect or misleading in any material respect on or as of the date made or given or deemed made or given, and in the case of a failure which in the reasonable opinion of the Sukuk Trustee is capable of being remedied, the Issuer and/or the Guarantor does not remedy the failure within a period of fourteen (14) days after the Issuer and/or the Guarantor became aware or having been notified by the Sukuk Trustee of the failure; (iii) the Issuer and/or the Guarantor fails to observe or perform its obligations under any of the Transaction Documents or the Sukuk Wakalah or under any undertaking or arrangement entered into in connection therewith other than an obligation of the type referred to in paragraph (i) above, and in the case of a failure which in the opinion of the Sukuk Trustee is capable of being remedied, the Issuer and/or the Guarantor does not remedy the failure within a period of thirty (30) days after the Issuer and/or the Guarantor became aware or having been notified by the Sukuk Trustee of the failure; (iv) there has been a breach by the Issuer and/or the Guarantor of any obligation under any of the Issuer and/or the Guarantor existing contractual obligations which may materially and adversely affect the Issuer’s and/or the Guarantor’s ability to perform its obligations under the Transaction Documents and, if in the reasonable opinion of the Sukuk Trustee is capable of being remedied, the Issuer and/or the Guarantor does not remedy the breach within a period of thirty (30) days after it became aware or having been notified by the Sukuk Trustee of the breach; (v) any indebtedness for Islamic financing and borrowed moneys of the Issuer or the Guarantor becomes due or payable or capable of being declared due or payable prior to its stated maturity or any guarantee or similar obligations of the Issuer and/or the Guarantor is not discharged at maturity or when called and such declaration of indebtedness being due or payable or such call on the guarantee or similar obligations is not discharged or disputed in good faith by the Issuer or the Guarantor in a court of competent jurisdiction within thirty (30) days from the date of such declaration or call, or the Issuer or the Guarantor goes into default under, or commits a breach of, any agreement or instrument relating to any such indebtedness, guarantee or other obligations, or any security created to secure such indebtedness becomes enforceable; 24 PUBLIC
25. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (vi) an encumbrancer takes possession of, or a trustee, receiver, receiver and manager or similar officer, administrator or liquidator is appointed in respect of the any of the business or assets of the Issuer or distress, legal process, sequestration or any form of execution is levied or enforced or sued in respect of the whole or any part of the business or assets of the Issuer and is not discharged within thirty (30) days after being levied, enforced or sued out, or any security interest which may for the time being affect any of its assets becomes enforceable; (vii) an encumbrancer takes possession of, or a trustee, receiver, receiver and manager or similar officer, administrator or liquidator is appointed in respect of the whole or substantial part of the business or assets of the Guarantor or distress, legal process, sequestration or any form of execution is levied or enforced or sued in respect of the whole or a substantial part of the business or assets of the Guarantor and is not discharged within thirty (30) days after being levied, enforced or sued out, or any security interest which may for the time being affect any of its assets becomes enforceable; For the purpose of paragraphs (vii) and (xiv), references to “substantial” shall mean such value equivalent to or more than 5% of the consolidated total net assets of V.S. Industry Group (or its equivalent in any other currency or currencies) in any financial year; (viii) the Issuer or the Guarantor 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; (ix) any step is taken for the winding up, dissolution or liquidation of the Issuer or the Guarantor or a resolution is passed for the winding up of the Issuer or the Guarantor or a petition of winding up is presented against the Issuer or the Guarantor and the Issuer or the Guarantor has not taken any action in good faith to set aside such petition within thirty (30) days from the date of service of such winding up petition or a winding up order has been made against the Issuer and/or the Guarantor; (x) the Issuer or the Guarantor 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 general rescheduling or deferral 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 Trustee, unless during or following such reconstruction the Issuer or the Guarantor becomes or is 25 PUBLIC
26. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR declared to be insolvent) or where a scheme of arrangement under Section 366 of the Companies Act 2016 has been instituted against the Issuer or the Guarantor; (xi) where there is a revocation, withholding, invalidation or modification of any license, authorisation, approval or consent of the Issuer or the Guarantor which in the opinion of the Sukuk Trustee may reasonably be likely to have a Material Adverse Effect; (xii) the Issuer or the Guarantor is deemed (pursuant to Section 466 of the Companies Act 2016) unable to pay its debts as and when they fall due or suspends or threatens to suspend making payments with respect to all or any class of its debts; (xiii) the Issuer (i) changes or threatens to change the nature or scope of its business, or (ii) suspends or threatens to suspend, or ceases or threatens to cease the operation of its business which it conducts as at the date of the Trust Deed; (xiv) the Guarantor (i) changes or threatens to change the nature or scope of a substantial part of its business, or (ii) suspends or threatens to suspend, or ceases or threatens to cease the operation of a substantial part of its business which it conducts as at the date of the Trust Deed; (xv) at any time any of the provisions of the Transaction Documents is or becomes illegal, void, voidable or unenforceable; (xvi) the Issuer or the Guarantor repudiates any of the Transaction Documents or the Issuer or the Guarantor does or causes to be done any act or thing evidencing an intention to repudiate any of the Transaction Documents; (xvii) all or any part of the assets, undertakings, rights or revenue of the Issuer or the Guarantor are condemned, seized, or otherwise appropriated, nationalised or compulsorily acquired by any person acting under the authority of the governmental body which in the opinion of the Sukuk Trustee may have a Material Adverse Effect; (xviii) any event or events has or have occurred or a situation or situations exist(s) which in the opinion of the Sukuk Trustee may or would likely have a Material Adverse Effect and in the case of the occurrence of such event or situation which in the opinion of the Sukuk Trustee is capable of being remedied, the Issuer or the Guarantor has not remedied it within thirty (30) days after the earlier of (a) the Issuer or the Guarantor becoming aware of such an event and (b) the Issuer or the Guarantor being notified of such an event in writing by the Sukuk Trustee; 26 PUBLIC
27. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR (xix) Such other event or events as agreed between the Issuer, the Guarantor and the PA/LA. Upon occurrence of any Dissolution Event, whether or not continuing, the Sukuk Trustee may, and if so directed to do so by an extraordinary resolution of the Sukukholders shall, declare that a Dissolution Event has occurred (“Dissolution Declaration Date”) and may take such proceedings against the Issuer as it thinks fit to enforce the Transaction Documents in the following sequence: 1. invoke the Purchase Undertaking; 2. thereafter, the Obligor will be obligated to purchase the Sukukholders’ undivided and proportionate beneficial interest in the Shariah-compliant Business at the relevant Exercise Price in relation to the Purchase Undertaking by executing the Sale Agreement; 3. the Buyer to pay the outstanding amounts of the Deferred Sale Price (subject to Ibra’); and 4. proceeds from the Wakalah Portfolio including the relevant Exercise Price in relation to the Purchase Undertaking and the outstanding Deferred Sale Price received from the Issuer shall be paid to the Sukukholders to redeem the Sukuk Wakalah at the Dissolution Distribution Amount in accordance with the terms of the Transaction Documents. Upon full payment of all amounts due and payable under the relevant Sukuk Wakalah, the relevant trust in respect of the Trust Assets will be dissolved and the relevant Sukuk Wakalah held by the Sukukholders will be cancelled. The Sukuk Trustee shall be entitled to, at any time, take any proceedings to enforce its rights under the Corporate Guarantee provided by the Guarantor without first taking such proceedings abovementioned against the Issuer or may take concurrent proceedings against both the Issuer and the Guarantor. (27) Governing laws Laws of Malaysia. (28) Provisions on buy-back, if The Issuer or any agent(s) of the Issuer, related corporations of the Issuer may purchase the Sukuk Wakalah from the open market or by private treaty at any price. applicable The Sukuk Wakalah which are purchased / redeemed by the Issuer, or any agent(s) of the Issuer or the related corporations of the Issuer shall be cancelled by the Issuer and cannot be reissued or resold. (29) Provisions on early Not applicable. redemption, if applicable (30) Voting Voting by the Sukukholders under the Sukuk Wakalah Programme shall be carried out as follows: Prior to upsizing of the Sukuk Wakalah Programme 27 PUBLIC
28. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR All matters/resolutions in respect of the Sukuk Wakalah shall be carried out on a collective basis by the Sukukholders. Post upsizing of the Sukuk Wakalah Programme: All matters/resolutions in respect of the Sukuk Wakalah shall be carried out by the Sukukholders on a ‘per Series’ basis. “Series” shall mean, in relation to any Sukuk Wakalah, such Sukuk Wakalah with the same issue date. For the avoidance of doubt, any Sukuk Wakalah held by the Issuer or any Interested Person shall not be counted for the purpose of voting, subject to any exceptions set out in the Guidelines on Trust Deeds. (31) Permitted investments, if No permitted investment. applicable (32) Ta`widh In the event the Wakeel breaches its fiduciary duty due to its failure to distribute any realised Periodic Distributions, and/or the Obligor/Issuer/Buyer delays or fails to pay any amounts due and payable to the Sukukholders under any sale agreement pursuant to the exercise of the Purchase Undertaking and/or the Deferred Sale Price, the Wakeel and/or the Obligor/Issuer/Buyer shall pay to the Sukuk Trustee (acting on behalf of the Sukukholders) Ta`widh (compensation) on such delay or failure in payments at the rate and in the manner prescribed by the SC's SAC from time to time. Any Ta’widh (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. (33) Ibra’ Ibra’ is 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 obligations or liabilities towards the former. The release may be either partially or in full. Ibra’ (where applicable) shall be granted by the Sukukholders. The Sukukholders in subscribing to or purchasing the Sukuk Wakalah hereby consent to grant such Ibra’ (if any) on the Deferred Sale Price if the Sukuk Wakalah is redeemed upon the Dissolution Declaration Date. The Ibra’ for redemption upon Dissolution Declaration Date shall be calculated as follows: i. in the case of Sukuk Wakalah with Periodic Distribution and issued at a discount: the aggregate of unearned Expected Periodic Distribution Amount and the unearned discounted amount. ii. in the case of Sukuk Wakalah without Periodic Distribution and issued at a discount: 28 PUBLIC
29. VS CAPITAL MANAGEMENT SDN BHD (“ISSUER”) PROPOSED ESTABLISHMENT OF A SUKUK WAKALAH PROGRAMME OF UP TO RM1.0 BILLION IN NOMINAL VALUE BASED ON THE SHARIAH PRINCIPLE OF WAKALAH BI AL-ISTITHMAR the unearned discounted amount. iii. in the case of Sukuk Wakalah with Periodic Distribution and issued at par: the aggregate of unearned Expected Periodic Distribution Amount. iv. in the case of Sukuk Wakalah with Periodic Distribution and issued at a premium: the aggregate of unearned Expected Periodic Distribution Amount. The Ibra’ in relation to (i), (ii), (iii) and (iv) above shall be calculated from the Dissolution Declaration Date up to the respective Scheduled Dissolution Date of the Sukuk Wakalah. For the avoidance of doubt, Ibra’ will be applicable to the Commodity Murabahah Investment portion of the Wakalah Portfolio, i.e. the Deferred Sale Price only and shall only be deemed granted upon receipt of the redemption amount of the Sukuk Wakalah. If the Sukuk Wakalah is redeemed before the Scheduled Dissolution Date of the relevant Sukuk Wakalah due to reasons other than the taking effect of a Dissolution Declaration Date, the amount of Ibra’ shall be based on a formula to be mutually agreed by the Issuer, the Guarantor and the Sukukholders. In respect of the Sukuk Wakalah, early settlement charges may be imposed up to the unearned profit under the Deferred Sale Price in relation to the Commodity Murabahah Investment in the event there is early redemption of the Sukuk Wakalah. Any double counting shall be disregarded. (34) Kafalah Please refer to the section entitled “Section 1.04 Details of Facility/Programme – Details of guarantee, if applicable”. (The remainder of this page is intentionally left blank) 29 PUBLIC