• PTC

• INTEREST/COUPON (%)
APPENDIX 1

BSA INTERNATIONAL BERHAD

PRINCIPAL TERMS AND CONDITIONS

Names and Parties involved in the Proposed Transaction

(i) Issuer BSA

(ii) Lead Manager/Lead CIMB

Arranger/Facility
Agent/Primary
Subscriber (if
applicable)/Authorise
d Depository/Paying
Agent

(iii) Solicitors for the Lead Messrs. Lee Choon Wan & Co.
Manager

(iv) Trustee/Security Malaysian Trustees Berhad

Trustee

(v) Syariah Adviser CIMB Fiqh Council, CIMB

(vi) Reporting Accountant Messrs. Ernst & Young

Facility Description Murabahah CP/MTN Programme of up to

RM150,000,000 in nominal value.

Underlying Transaction

Under the Murabahah structure, the Issuer and

the Trustee (acting for and on behalf of the
Noteholders) shall execute Murabahah
purchase agreements under which the Issuer
will, from time to time, sell the relevant assets
to the Trustee (acting for and on behalf of the
Noteholders). The Murabahah purchase price
will be the amount to be disbursed. Pursuant to
the Murabahah arrangement, the Trustee
(acting for and on behalf of the Noteholders)
will then sell the said assets back to the Issuer
via Murabahah sale agreements. The
Murabahah sale price would represent the
profit and principal under the relevant Notes.

For the initial issuance of up to RM70 million,

the Issuer has identified the ordinary shares in
its wholly-owned subsidiaries, namely BSAM
and CAM, to be used in the Murabahah
transaction.

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 The Issuer will use the aforementioned shares
to effect the Murabahah transaction from time
to time to achieve the required issue amount.
For example, in the first issuance of up to
RM70 million, it is envisaged that the Issuer
may enter into more than one Murabahah
transaction with the Trustee (acting for and on
behalf of the Noteholders~ to achieve an issue
size of up to RM70 million .

For subsequent issuances under the

Murabahah CP/MTN Programme, the above
shares may be used to facilitate the
Murabahah transaction and the value of the
above share shall be based on the NTA of the
said subsidiaries calculated in accordance with
the latest audited accounts. Alternatively, the
Issuer may use such other Syariah-compliant
assets to be determined at the point in time.
1
since 31 march 2004, BSA has been servicing
the banking facilities listed Appendix A and as
of the date of this Information Memorandum,
BSA estimates that the initial issuance to
refinance the said banking facilities would not
exceed RM60 million.

Issue Size (RM) The aggregate nominal value of the

outstanding Notes under the Murabahah
CP/MTN Programme at any point in time shall
not exceed RM150,000,000 with a sublimit of
RM75,000,000 on the aggregate outstanding
nominal value of the CPs at any point in time.

For the avoidance of doubt, it is hereby stated

that the nominal value, in the case of a CP,
shall be the face value of the CP whilst the
nominal value, in the case of a MTN, shall be
the face value of the primary note of the
relevant MTN.

2
Issue Price (RM) CPs:
The CPs shall be issued at a discount and the
issue price will be calculated in accordance
with Part Ill Section 5.1 of the FAST Rules.

MTNs:
The MTNs shall be issued at par or at a
discount and the issue price will be calculated
in accordance with Part Ill Section 5.1 of the
FAST Rules.

Tenor of the Facility Seven years from the date of first issue under
/Issue the Murabahah CP/MTN Programme.

CPs - One, two, three, six, nine or twelve

months as the Issuer may select, provided that
the CPs mature prior to the expiry of the CP
Programme.

MTNs - More than one year to seven years as

the Issuer may select, provided that the MTNs
mature prior to the expiry of the MTN
Programme.

Profit Rate (%) The profit rate for the CPs and/or MTNs shall
be determined at the point of issuance.

Profit Payment For the CPs, the profit payment frequencies

Frequency would depend on the maturity periods of each
issue/re-issue selected by the Issuer and such
period is reflected in the formula applicable for
the calculation of the issue price of that
particular issue/re-issue of the CPs which is
found in Part Ill Section 5.1 of the FAST Rules.

For the MTNs, the profit payment frequency

shall be semi-annually or a period to be
mutually agreed between the Issuer and the
Lead Manager which shall be in accordance
with Part Ill Section 5.1 of the FAST Rules.

Profit Payment Basis Profit payments for the Notes are to be

calculated based on actual number of days
elapsed and actual number of days basis
(actual/actual).

Yield to Maturity (%) Determined only upon each issuance of the

Notes.

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Security/Collateral/ An assignment of the Security Accounts (as
Guarantee defined herein).

Security Accounts

(I) Finance Service Reserve Account ("FSRA")

The Issuer shall open and maintain a FSRA
operated under Syariah principles with a
financial institution which is acceptable to the
Lead Manager. The FSRA shall be operated
solely by the Facility Agent (acting as agent for
the Security Trustee).

The Issuer shall ensure that funds are deposited

into the FSRA until the balance held in the FSRA
is at least equivalent to the aggregate nominal
value of:

(a) the outstanding MTNs including any profit

payable which will become due and payable
in the next six (6) months; and

(b) the outstanding CPs which will become due

and payable in the next six months and
which the Issuer does not intend to roll
over1 .
1
Roll over - where the Issuer will issue new
CPs sufficient to refinance all existing CPs
falling due and payable on the relevant maturity
date(s) within the six month period.

The aggregate nominal value of (a) and (b)

above shall hereinafter be defined as the
"Minimum Required Balance".

The Minimum Required Balance shall be

deposited at least three months prior to the first
Profit Payment Date and thereafter, 50% and
100% of the Minimum Required Balance shall
be deposited at least six months and three
months respectively prior to the subsequent
Profit Payment Dates (collectively referred to as
"Deposit Dates"). In the event that the balance
held in the FSRA exceeds the Minimum
Required Balance, the excess shall be released
to an account to be nominated by the Issuer.

For the avoidance of doubt, non-compliance of

the Minimum Required Balance, in the case of
a shortfall, constitutes an Event of Default (as
set out in Section 2.20) subject to the further
provisions of the Events of Default.

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The Issuer may only withdraw sums from the
FSRA for the payment of the profits and
redemption and other outstanding payments
due under the Notes. The Issuer may only
make payments in connection with the
aforesaid items if at the time the relevant
payments are due, the Issuer has insufficient
funds to make full payments from its internally
generated funds. However, any shortfall arising
from withdrawals from the FSRA must be
topped up by the Issuer within thirty days from
and including the date the withdrawal is made,
until the balance is equivalent to the Minimum
Required Balance, failing which it would
constitute as an Event of Default subject to the
relevant provisions of the Events of Default.

Pending disbursements from the FSRA, all

monies standing to the credit of the FSRA shall
be managed by the Facility Agent, although in
any event, such money may be utilised to make
Permitted Investments, provided that such
monies utilised for Permitted Investments shall
be remitted to the FSRA in a timely manner to
meet any payment obligations of the Issuer
when due and payable as permitted under the
preceding paragraph.

(II) Security Account 1

The Issuer shall also open and maintain a
Security Account ("Security Account 1")
operated under Syariah principles with a
financial institution which is acceptable to the
Lead Manager for the purpose of depositing at
least 15% of the proceeds as an additional
security reserve from any listing exercise of the
Issuer's subsidiaries as provided under item (ii)
of the "Negative Covenant" clause below. The
Security Account 1 shall be operated solely by
the Facility Agent (acting as agent for the
Security Trustee) and utilisation of funds
standing to the credit of this Security Account 1
shall be subject to the following conditions:

(a) for the payment of the profits and

redemption and other outstanding
payments due under the Notes provided
that at the time the relevant payments are
due, the Issuer has insufficient funds to
make full payments from its internally
generated funds and from the FSRA; or

5
 (b) at any time on or before the expiry of the
tenure of the Murabahah CP/MTN
Programme and provided that all
outstanding Notes have been fully
redeemed and all other outstanding
payments due under the Notes have been
paid by the Issuer, any balance standing to
the credit of the Security Account 1 shall be
released to an account to be nominated by
the Issuer.

Pending disbursements from the Security

Account 1, all monies standing to the credit of
the Security Account 1 shall be managed by
the Facility Agent, although in any event, such
money may be utilised to make Permitted
Investments, provided that such monies utilised
for Permitted Investments shall be remitted to
the Security Account 1 in a timely manner to
meet any payment obligations of the Issuer
when due and payable as permitted under the
preceding paragraph (a).

Corporate Guarantee

Each of the Issuer's Key Subsidiaries shall

provide a Corporate Guarantee to the Security
Trustee in relation to the Notes.

For the avoidance of doubt, Key Subsidiaries

shall be defined as the Issuer's present and
future subsidiaries which contribute at least
10% to the BSA Group Pre-Tax Profit. Key
Subsidiaries shall exclude joint venture
companies between the BSA Group and
external third parties.

Pre-Tax Profit shall be calculated and based on

the latest consolidated audited accounts of the
Issuer.

Details on Utilisation of The proceeds of the Murabahah CP/MTN

Proceeds Programme shall be utilised to finance the
present and future working capital and capital
expenditure requirements of the BSA Group
and to refinance the BSA Group's existing
banking facilities as at 31 March 2004.

The proceeds from the initial issuance of up to

RM70 million shall be utilised to refinance the
BSA Group's existing banking facilities as set
out in Appendix A.

6
Minimum Rating Minimum short-term rating of P2 for CPs and
minimum long-term rating of A3 for MTNs.

Form and Denomination Each issue of the CPs or the MTNs shall be
represented by a global certificate(s) in bearer
form to be deposited with the Authorised
Depository. The Notes shall be subject to the
FAST Rules. Subject to the transaction
documents, no physical delivery of the Notes
will be permitted. The denomination of the
Notes shall be RM1 ,000.00 or in multiples of
RM1 ,000,000 at the time of issuance.

Mode of Issue In the case of CPs, via competitive tender by

tender panel members or direct placement on a
best effort basis or bought deal basis.

In the case of MTNs, via competitive tender by

tender panel members or direct placement on a
best effort basis or bought deal basis or book
running on a best effort basis subject to terms
and conditions to be agreed between the Issuer
and the Lead Manager.

Issuance of the Notes under the Murabahah

CP/MTN Programme shall be in accordance
with the FAST Rules subject to such
exemptions (if applicable) granted from time to
time.

Selling Restrictions At issuance

The Notes may only be offered, sold,

transferred or otherwise disposed directly or
indirectly to a person to whom an offer or
invitation to subscribe the Notes and to whom
the Notes are issued would fall within Schedule
2 or Section 38(1 )(b) and Schedule 3 or
Section 39(1 )(b) of SCA and would fall within
Schedule 5 or Section 66(3) of the SCA.

Thereafter

The Notes may only be offered, sold,

transferred or otherwise disposed directly or
indirectly to a person to whom an offer or
invitation to purchase the Notes would fall
within Schedule 2 or Section 38(1 )(b) of SCA
and Schedule 5 or Section 66(3) of the SCA.

Listing Status The Notes will not be listed on the Bursa

Malaysia.

7
Minimum Level of For each issuance under the Murabahah
Subscription CP/MTN Programme that is not underwritten
and issued via book running or on a tender
basis, the minimum level of subscription shall
be 5% of the size of a particular issue.
For each issue of Notes from the Murabahah
CP/MTN Programme which is:

(i) issued via direct placement; or

(ii) issued on a bought deal basis;

the 5% minimum level of subscription requirement

shall not be applicable and the level of
subscription shall be 100%.

Conditions Precedent Conditions precedent shall include but not be

limited to the following (all have to be in form
and substance acceptable to the Lead Manager
or the Primary Subscriber, as the case may
be):

A. Main Documentation

(i) The transaction documents have been

executed and, where applicable,
stamped and presented for registration;
and

(ii) All relevant notices and

acknowledgements (where applicable)
shall have been made or received, as the
case may be.

B. Issuer

(i) Certified true copies of the Certificate of

Incorporation and the Memorandum and
Articles of Association of the Issuer;

(ii) Certified true copies of the latest Forms 24

and 49 of the Issuer;

(iii) A certified true copy of board resolutions

of the Issuer authorising, among others,
the execution of the transaction
documents;

(iv) A list of the Issuer's authorised signatories

and their respective specimen signatures;

(v) A report of the relevant company search of

the Issuer; and

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 (vi) A report of the relevant winding up
search or the relevant statutory
declaration of the Issuer.

C. General

(i) The approval from the SC and, where

applicable, all other regulatory authorities;

(ii) The Murabahah CP/MTN Programme

has received the requisite ratings as
stated in this Information Memorandum;

(iii) Evidence that all transaction fees, costs

and expenses have been paid in full;

(iv) The Lead Manager has received from its

solicitors a favourable legal opinion
addressed to it and the Trustee advising
with respect to, among others, the legality,
validity and enforceability of the
transaction documents and a confirmation
addressed to the Lead Manager that all
the conditions precedent have been
fulfilled;

(v) The approval from the Syariah Adviser;

(vi) Evidence that the Security Accounts

have been opened as stipulated;

(vii) Corporate Guarantees from each of the

Issuer's Key Subsidiaries;

(viii) If applicable, receipt of documentary

evidence that the Issuer has notified the
relevant lenders of the existing credit
facilities in respect of the Murabahah
CP/MTN Programme and their
acknowledgement thereto; and

(ix) Such other conditions precedent as

advised by the Solicitors for the Lead
Manager.

Representations and To include but not limited to the following:

Warranties
(i) the Issuer is a company with limited
liability duly incorporated and validly
existing under the laws of Malaysia, has
power to carry on its business and to
own its property and assets;

9
(ii) the memorandum and articles of
association of the Issuer incorporate
provisions which authorise, and all
necessary corporate and other relevant
actions have been taken to authorise,
and all relevant consents and approvals
of any administrative, governmental or
other authority or body in Malaysia have
been duly obtained and are in full force
and effect which are required to
authorise, the Issuer to execute and
deliver and perform the transactions
contemplated in the transaction
documents in accordance with their
terms;

(iii) 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 the Issuer or any of its
assets is bound or which is applicable to
the Issuer or any of its assets, (b) cause
any limitation on the Issuer or the powers
of its directors, whether imposed by or
contained in its memorandum and
articles of association or in any
agreement, instrument, law, ordinance,
decree, order, rule, regulation, judgement
or otherwise, to be exceeded, or (c)
cause the creation or imposition of any
security interest or restriction of any
nature on any of the Issuer's assets;

(iv) 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 when executed or
issued, as the case may be, constitute,
valid and legally binding obligations of
the Issuer enforceable in accordance
with its terms; and

(v) any other representations and warranties

as advised by the Solicitors for the Lead
Manager and mutually agreed between
the Lead Manager and the Issuer.

10
Events of Default To include but not limited to the following:

(i) the Issuer fails to pay any amount due

from it under any of the transaction
documents on the due date or, if so
payable, on demand;

(ii) the Issuer fails to maintain the required

Minimum Required Balance and the
Issuer does not remedy the failure within
a period of seven days after the relevant
Deposit Dates as stipulated under the
FSRA provisions;

(iii) any representation or warranty made or

given by the Issuer under the transaction
documents or which is contained in any
certificate, document or statement
furnished at any time pursuant to the
terms of the Notes 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
opinion of the Trustee is capable of being
remedied, the Issuer does not remedy
the failure within a period of fourteen
days after the Issuer became aware or
having been notified by the Trustee or
the Security Trustee of the failure;

(iv) the Issuer fails to observe or perform its

obligations under any of the transaction
documents or the Notes under any
undertaking or arrangement entered into
in connection therewith other than an
obligation of the type ref erred to in
paragraphs (i) and (ii) above, and in the
case of a failure which in the opinion of
the Trustee is capable of being
remedied, the Issuer does not remedy
the failure within a period of fourteen
days after the Issuer became aware or
having been notified by the Trustee or
the Security Trustee of the failure;

(v) there has been a breach by the Issuer of

any obligation under any of the Issuer's
existing contractual obligations which
may materially and adversely affect the
Issuer's ability to perform its obligations
under the transaction documents and, if
in the opinion of the Trustee is capable of
being remedied, the Issuer does not

11
 remedy the breach within a period of
fourteen days after the Issuer became
aware or having been notified by the
Trustee or the Security Trustee of the
breach;

(vi) any indebtedness for borrowed moneys

of the Issuer 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 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 in a court of
competent jurisdiction within thirty days
from the date of such declaration or call,
or the Issuer 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;

(vii) an encumbrancer takes possession of, or

a trustee, receiver, receiver and manager
or similar officer is appointed in respect
of the whole or substantial part of the
business or assets of the Issuer, or
distress, legal process, sequestration or
any form of execution is levied or
enforced or sued out against the Issuer,
or any security interest which may for the
time being affect any of its assets
becomes enforceable;

For the purpose of this paragraph (vii),

references to "substantial" shall mean
such value equivalent to or more than
10% of the Issuer's net tangible assets
as reflected in its latest annual audited
financial statements.

(viii) the Issuer fails to satisfy any judgement

passed against it by any court of
competent jurisdiction and no appeal
against such judgement or an 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;

12
(ix) any step is taken for the winding up,
dissolution or liquidation of the Issuer or
a resolution is passed for the winding up
of the Issuer or a petition for winding up
is presented against the Issuer (provided
that it is not frivolous, vexatious or
scandalous) and the Issuer has not taken
any action in good faith to set aside such
petition within thirty days from the date of
service of such winding up petition or a
winding up order has been made against
the Issuer;

(x) the Issuer 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 Trustee, unless during or
following such reconstruction the Issuer
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;

(xi) where there is a revocation, withholding

or modification of any license,
authorisation, approval or consent which
in the opinion of the Trustee may
materially and adversely impairs or
prejudices the ability of the Issuer to
comply with the terms and conditions of
the Notes or the transaction documents;

(xii) the Issuer is deemed unable to pay any

of its debts or becomes unable to pay
any of its debts as they fall due or
suspend or threaten to suspend making
payments with respect to all or any class
of its debts;

13
(xiii) any creditor of the Issuer exercises a
contractual right to take over the financial
management of the Issuer and such event
in the opinion of the Trustee may have a
Material Adverse Effect on the Issuer;

(xiv) the Issuer changes or threatens to

change the nature or scope of a
substantial part 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 Trustee may have a
Material Adverse Effect on the Issuer;

(xv) at any time any material provision of the

transaction documents is or becomes
illegal, void, voidable or unenforceable;

(xvi) the Issuer repudiates any of the

transaction documents or the Issuer
does or causes to be done any act or
thing evidencing an intention to repudiate
any of the transaction documents;

(xvii) any of the assets, undertakings, rights or

revenue of the Issuer are seized,
nationalised, expropriated or
compulsorily acquired by or under the
authority of any governmental body
which in the opinion of the Trustee may
have a Material Adverse Effect (as
defined in Section 2.23 (vii)) on the
Issuer;

(xviii) any event or events has or have

occurred or a situation exists which in the
opinion of the Trustee may have a
Material Adverse Effect on the Issuer,
and in the case of the occurrence of such
event or situation which in the opinion of
the Trustee is capable of being
remedied, the Issuer does not remedy it
within a period of fourteen (14) days after
the Issuer became aware or having been
notified by the Trustee or the Security
Trustee of the event or situation; and

(xix) such other event as may be advised by

the Solicitors for the Lead Manager and
mutually agreed between the Lead
Manager and the Issuer.

14
Information Covenants (i) the Issuer shall provide to the 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 Murabahah CP/MTN Programme
and that there does not exist or had not
existed, from the date the Notes were
issued, any Event of Default, and if such
is not the case, to specify the same;

(ii) the Issuer shall deliver to the 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 years) copies of
its financial statements for that year
which shall contain the income
statements and balance sheets of the
Issuer and which are audited and
certified without qualification by a firm
of independent certified public
accountants acceptable to the
Trustee;

(b) as soon as they become available

(and in any event within ninety 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 the
income statements and balance
sheets of the Issuer which are duly
certified by any one of its directors;

(c) promptly, such additional financial or

other information relating to the
Issuer's business and its operations
as the Trustee may from time to time
reasonably request; and

(d) promptly, all notices or other

documents received by the Issuer
from any of its shareholders or its
creditors which contents may
materially and adversely affect the
interests of the Noteholders, 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

15
 are dispatched to these shareholders
or creditors,

(iii) the Issuer shall promptly notify the

Trustee of any change in its board of
directors;

(iv) the Issuer shall promptly notify the

Trustee of any change in its condition
(financial or otherwise) and 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
which may materially and adversely
affect the ability of the Issuer to perform
any of its obligations under any of the
transaction documents;

(v) the Issuer shall promptly give notice to

the Trustee of the occurrence of any
Event of Default 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
requirement as contemplated under the
relevant transaction document would
constitute an Event of Default ("Potential
Event of Default") forthwith upon
becoming aware thereof, and it shall take
all reasonable steps and/or such other
steps as may reasonably be requested
by the Trustee to remedy and/or mitigate
the effect of the Event of Default or the
Potential Event of Default; and

(vi) any other covenants as advised by the

Solicitors for the Lead Manager and
mutually agreed between the Lead
Manager and the Issuer.

Positive Covenants (i) the Issuer shall maintain in full force and
effect all relevant 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 is or may become
necessary to enable it to own its assets,
to carry on its business or for the Issuer
to enter into or perform its obligations
under the transaction documents or to
ensure the validity, enforceability,
admissibility in evidence of the

16
 obligations of the Issuer or the priority or
rights of the financiers under the
transaction documents and the Issuer
shall comply with the same;

(ii) the Issuer 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;

(iii) the Issuer 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 shall promptly perform and

carry out all its obligations under all the
transaction documents (including but not
limited to redeeming the Notes on the
relevant maturity date(s) or any other
date on which the Notes are due and
payable) and ensure that it shall
immediately notify the Trustee in the
event that the Issuer is unable to fulfil or
comply with any of the provisions of the
transaction documents;

(v) the Issuer shall 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
operations of the Issuer for the period to
which the financial statements are made
up and shall disclose or provide against
all liabilities (actual or contingent) of the
Issuer;

(vi) the Issuer shall promptly comply with all

applicable provisions of the SCA and/or
the notes, circulars, conditions or
guidelines issued by SC from time to
time; and

(vii) such other undertakings as may be

advised by the Solicitors for the Lead
Manager and mutually agreed between
the Lead Manager and the Issuer.

17
Negative Covenants (i) the Issuer 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 limitation, title transfer and/or
retention arrangements having a similar
effect or any agreement to create any of
the foregoing, but excluding liens arising
in the ordinary course of business by
operation of law and not by way of
contract, and those security as
contemplated under this term sheet;

(ii) the Issuer and its subsidiaries shall not

dispose any assets in excess of 10% of
the consolidated NTA or RM15.0 million
whichever is higher in aggregate in any
financial year to third parties save and
except for disposal of shares in
subsidiaries arising from any listing
exercise and provided always that (i) the
Issuer's direct and indirect shareholdings
does not fall below 51 % after the listing
exercise, and (ii) at least 15% of the
proceeds from any listing exercise of the
Issuer's subsidiaries shall be deposited
into Security Account 1;

(iii) the Issuer shall not add, delete, amend

or substitute its Memorandum or Articles
of Association in a manner inconsistent
with the provisions of the transaction
documents;

(iv) the Issuer shall not reduce or in any way

whatsoever alter except increase, its
authorised or paid-up share capital
whether by varying the amount, structure
or value thereof or the rights attached
thereto or by converting any of its share
capital into stock, or by consolidating,
dividing or sub-dividing all or any of its
shares;

(v) the Issuer shall not declare or pay any

dividends or make any distribution
whether income or capital in nature
including principal and interest of any
shareholders' loans and advances to its
shareholders if :

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 (a) an Event of Default has occurred, is
continuing and has not been waived,
or if following such payment or
distribution an Event of Default would
occur; or

(b) the Debt to Equity Ratio ("D:E Ratio")

is breached or will be breached if
calculated immediately following such
payment or distribution; or

(c) the balance standing to the credit of

the FSRA both before and after the
payment is less than the Minimum
Required Balance.

(vi) the Issuer shall not obtain or permit to

exist any loans or advances from its
shareholders, subsidiaries or associated
companies unless these loans and
advances are (a) subordinated to the
Facilities or (b) part of the loans and
advances of up to RM5.0 million in
aggregate in any financial year which
have been extended to the Issuer for the
purpose of meeting its operating
expenses arising in the ordinary course
of its business on terms that are no less
favourable to the Issuer than those that
could have been obtained in a
comparable transaction from non-
interested persons;

(vii) subject to paragraph (vi) above, the

Issuer shall not enter into any agreement
with its shareholders, subsidiaries or
associated companies (if applicable)
unless such agreement is entered into:

(a) in the ordinary course of its business;

(b) on an arms-length basis; and

(c) will not have a Material Adverse

Effect (as defined hereunder) on the
Issuer;

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 For the purposes of this term sheet,
Material Adverse Effect means any
material adverse effect on the business
or condition (financial or otherwise) or
results of the operations of the Issuer or
the occurrence of any event which may
materially and adversely affect the ability
of the Issuer to perform any of its
obligations under any of the transaction
documents.

(viii) the Issuer shall not use the proceeds of

the facilities except for the purposes set
out in this term sheet;

(ix) the Issuer shall not lend any money to

any party other than to (a) the Issuer's
directors, officers or employees as part of
their terms of employment and (b)
subsidiaries for the purpose of funding
capital expenditure, refinancing existing
credit facilities or operating expenses
arising in the ordinary course of
business; and

(x) such other undertakings as may be

advised by the Solicitors for the Lead
Manager and mutually agreed between
the Lead Manager and the Issuer.

Tender Panel Members Persons to whom an issue of, or an offer or

("TPM") invitation to subscribe, the Notes would fall
within Schedule 2 or Section 38(1 )(b) and
Schedule 3 or Section 39(1 )(b) of the SCA and
would fall within Schedule 5 or Section 66(3) of
the SCA.

Right to Make Permitted Funds held in the Security Accounts shall be

Investments permitted to be invested in Permitted
Investments by the Facility Agent upon
instruction from the Issuer, provided that:

i) such funds utilised for Permitted

Investments shall, where necessary, be
remitted to the respective Security
Accounts in a timely manner to meet any
payment obligations of the Issuer when
due and payable;

ii) such Permitted Investments are to be held

and not traded; and

iii) shall be denominated in Ringgit Malaysia.

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Permitted Investments Permitted Investments shall comprise
investment products approved by the SC
Syariah Advisory Council, BNM's Syariah
Council and/or other recognised Syariah
authorities. For the purposes of the Murabahah
CP/MTN Programme, Permitted Investments
are as follows:

(a) Mudharabah, wadiah and other deposits

under Syariah principles with licensed
financial institutions; or

(b) Bankers acceptances, bills and other

money market instruments issued under
Syariah principles by licensed financial
institutions with a short term rating of P1
and a minimum long term rating of AA3 or
their equivalent; or

(c) Treasury bills, money market instruments,

and other debt instruments issued under
Syariah principles by BNM or the
Government of Malaysia ("GOM"); or

(d) Debt securities issued by quasi

Government or Government related entities
under Syariah principles with a short term
rating of P1 and a minimum long term rating
of AA3 or their equivalent or debt securities
guaranteed by the GOM.

Status The Notes shall constitute direct, unconditional

and secured obligations of the Issuer and shall
at all times rank pari passu, without
discrimination, preference or priority amongst
themselves and at least pari passu with all
other present and future unsecured and
unsubordinated obligations of the Issuer,
subject to those preferred by law and the
transaction documents.

Repurchase and The Issuer or any of its subsidiaries may at any

Cancellation time purchase the Notes at any price in the
open market or by private treaty, but these
repurchased Notes shall be cancelled and
cannot be reissued.

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Availability Upon completion of documentation and, unless
waived by the Lead Manager or the Primary
Subscriber (as the case may be), compliance of
all conditions precedent and other applicable
conditions to the satisfaction of the Lead
Manager or the Primary Subscriber (as the
case may be).

Financial Covenants D:E Ratio

The Issuer shall maintain an annual D:E Ratio

not exceeding the limit prescribed below
throughout the tenure of the Murabahah
CP/MTN Programme.

D:E Ratio
Up to 31 December 2004 2.2 times
Thereafter 2.0 times

Debt to Equity Ratio The D:E Ratio is the ratio of indebtedness of

("D:E Ratio") the Issuer represented by:

i. all amounts outstanding under the

Murabahah CP/MTN Programme;

ii. all other indebtedness for borrowed

monies (be it actual or contingent), hire
purchase obligations, finance lease
obligations, net exposure determined on
a marked to market basis under any
derivative instrument and
obligations/contingent liabilities under
guarantees/call or put options of the
Issuer but excluding any inter company
loans which are subordinated to the
Notes and net of the balance standing
to the credit of the Security Accounts,

to the shareholders' funds of the Issuer

including, if any, preference equity,
subordinated shareholders' advances/loans
and retained earnings/losses (if any) less
goodwill.

The D:E Ratio calculations shall be duly

confirmed by the Issuer's external auditors and
based on the latest audited accounts of the
Issuer. The Issuer shall arrange for the external
auditor's confirmation to be forwarded to the
Facility Agent for its distribution to the Trustee
and the Rating Agency. For the avoidance of
doubt, any double counting shall be
disregarded.

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Compensation In the event of overdue payments of any amount
("Ta'widh") due under the Notes, the Issuer shall pay
compensation on such overdue amounts at the
rate and manner prescribed by the SC Syariah
Advisory Council or other relevant authority.

Taxation All payments by the Issuer shall be made

without withholding or deductions for or on
account of any present or future tax, duty or
charge of whatsoever nature imposed or levied
by or on behalf of Malaysia or any other
applicable jurisdictions, or any authority thereof
or therein having power to tax, unless such
withholding or deduction is required by law, in
which event the 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.

Governing Laws Laws of Malaysia.

Jurisdiction The Issuer shall unconditionally and irrevocably

submit to the exclusive jurisdiction of the courts
of Malaysia.

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