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DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential ISLAMIC COMMERCIAL PAPERS AND ISLAMIC MEDIUM TERM NOTES ISSUANCE PROGRAMME OF UP TO RM21.0 BILLION IN NOMINAL VALUE GUARANTEED BY THE GOVERNMENT OF MALAYSIA (“ICP/IMTN PROGRAMME”) PRINCIPAL TERMS AND CONDITIONS OF THE ICP/IMTN PROGRAMME (a) Names of parties involved in the proposed transaction (i) Issuer : DanaInfra Nasional Berhad (“DINB”). (ii) Guarantor : Government “Guarantor”). (iii) Joint Lead Arrangers : (i) AmInvestment Bank Berhad (“AmInvestment”); (ii) CIMB Investment Bank Berhad (“CIMB”); (iii) Maybank Investment Bank Berhad (“Maybank IB”); and (iv) RHB Investment Bank Berhad (“RHB”). (i) AmInvestment; (ii) CIMB; (iii) Maybank IB; (iv) Joint Lead Managers/Joint Bookrunners (“JLAs”) : of Malaysia (“Government” or (iv) RHB; and such other financial institutions to be determined (if applicable). (v) Facility Agent : CIMB. (vi) Shariah Adviser : CIMB Islamic Bank Berhad. (vii) Solicitors : (i) Acting for the JLAs Messrs. Mohamed Ridza & Co. (ii) Acting for the Issuer Messrs. Adnan Sundra & Low. (viii) Primary Subscriber(s) and Amount Subscribed : The Primary Subscribers (if any) will be determined prior to the issuance of the relevant Sukuk (defined hereunder), in the case where the Sukuk are issued via bought deal or direct placement on a best effort basis. (ix) : (i) Central Depository & Paying Agent Central Depository Bank Negara Malaysia (“BNM”) and/or Bursa Malaysia Depository Sdn Bhd (“Bursa Depository”). Page 1 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions (ii) Private and Confidential Paying Agent BNM and/or identified. (b) Facility Description (including the description of Islamic principle) : such other parties to be An Islamic commercial papers (“ICP”) and Islamic medium term notes (“IMTN”) programme of up to RM21.0 billion in nominal value irrevocably and unconditionally guaranteed by the Government (“ICP/IMTN Programme”). The ICPs and IMTNs are collectively referred to as “Sukuk”. Islamic Principle Murabahah and/or such other Islamic principle(s) (including but not limited to Wakalah, Musyarakah, Ijarah, Bai’ Inah or Bai’ Bithaman Ajil) acceptable to the JLAs and the Issuer to be determined prior to each Sukuk issuance. The Transaction Documents (defined hereunder) will provide that no approval from the holders of any Sukuk (“Sukukholders”) will be required, throughout the tenure of the ICP/IMTN Programme for the Issuer: (i) to issue Sukuk under the ICP/IMTN Programme based on Islamic principles other than Murabahah (including but not limited to Wakalah, Musyarakah, Ijarah, Bai’ Inah or Bai’ Bithaman Ajil); or (ii) to amend the structure described in this Principal Terms and Conditions so as to comply with any future requirements of the structure under the Murabahah principle; or (iii) to amend the structure of any Islamic principles (other than Murabahah) which may be adopted by the Issuer so as to comply with any future requirements of the structure under those Islamic principles. Prior approval from the Shariah Adviser will have to be obtained in respect of items (i), (ii) and (iii) above . For the avoidance of doubt, any changes to the structure of the Islamic principle(s) of any Sukuk which are outstanding shall require the prior approval of the Sukukholders of such outstanding Sukuk. Page 2 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential A. Murabahah 1. From time to time, DINB and the Facility Agent (acting on behalf of the potential Sukukholders) will execute an asset purchase agreement (“Purchase Agreement”) under which the Facility Agent shall purchase certain Shariahcompliant assets (“Assets”) from DINB for an asset purchase price (“Purchase Price”). The Purchase Price will be the amount to be disbursed under the Sukuk and will be in compliance with asset pricing requirements stipulated under the Securities Commission Malaysia (“SC”)’s Guidelines on Sukuk (revised and effective on 8 January 2014) as may be amended from time to time (“Guidelines on Sukuk”). 2. The Issuer shall then issue Sukuk to evidence the Sukukholders’ ownership of the Assets and thereafter, upon the onward sale of the Assets to DINB, the Sale Price (as defined hereinafter) and the rights of the Sukukholders via the Facility Agent under the Sale Agreement (as defined hereinafter). The proceeds received from the Sukukholders shall be used by the Facility Agent to pay the Purchase Price. 3. Pursuant to a Murabahah arrangement (“Murabahah Arrangement”), the Facility Agent (acting on behalf of the Sukukholders) will then sell the Assets to DINB via a sale agreement (“Sale Agreement”) for an asset sale price (“Sale Price”), which shall be paid by DINB on a deferred basis and shall be evidenced by the Sukuk. A diagrammatical illustration of the Murabahah transaction is set out in Annexure 1. B. Murabahah (via a Tawarruq arrangement) 1. The Facility Agent, on behalf of the Sukukholders, and the Issuer shall enter into an agency agreement (“Purchase Agency Agreement”), pursuant to which the Issuer is appointed as the agent of the Sukukholders (in such capacity, the “Purchase Agent”) for the purchase of Shariah-compliant commodities which would exclude ribawi items in the category of medium of exchange such as currency, gold and silver (“Commodities”). The Purchase Agent shall then enter into a subagency agreement (“Sub Agency Agreement”) to appoint the Facility Agent as a sub agent (in such capacity, the “Sub Agent”) to purchase Page 3 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential the Commodities. 2. Pursuant to a commodity Murabahah master agreement (“Commodity Murabahah Master Agreement”), prior to the date on which the relevant tranche of Sukuk is issued, the Issuer (as “Purchaser“) shall, from time to time, issue a purchase order (“Purchase Order”) in relation to the said tranche to the Purchase Agent and the Sub Agent. In the Purchase Order, the Purchaser will request the Purchase Agent and the Sub Agent to purchase the Commodities. The Purchaser shall irrevocably undertake to purchase the Commodities from the Sukukholders via the Sub Agent at the sale price (“Sale Price”) on a deferred basis. 3. The Sub Agent pursuant to an agreement (“CTP Purchase Agreement”) to be entered into between the Sub Agent and the commodity trading participant (“CTP”), will appoint the CTP to purchase the Commodities on a spot basis from the commodity supplier(s) in the Bursa Suq Al Sila’ (“Commodity Seller(s)”) at a purchase price (“Purchase Price”) which shall be an amount equivalent to the Sukuk proceeds. The Purchase Price shall be in line with the asset pricing requirements stipulated under the Guidelines on Sukuk. 4. The Issuer shall issue the Sukuk to the Sukukholders whereby the proceeds thereof shall be used to pay for the Purchase Price. The Sukuk shall evidence, amongst others, the Sukukholders’ ownership of the Commodities and subsequently once the Commodities are sold to the Purchaser, the Sukukholders’ entitlement to receive the Sale Price. 5. Thereafter, pursuant to a sale and purchase agreement (“Sale and Purchase Agreement”), the Sub Agent (acting on behalf of the Purchase Agent as agent of the Sukukholders) shall sell the Commodities to the Purchaser based on the Murabahah principle at the Sale Price. 6. Upon completion of such sale the Purchaser, pursuant to an agreement (“CTP Sale Agreement”) entered into between the Purchaser and the CTP, shall appoint the CTP to sell the Commodities to Bursa Malaysia Islamic Services Sdn. Bhd. (“Commodity Buyer”) on a spot basis for an amount equal to the Purchase Price. Page 4 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential A diagrammatical illustration of the Murabahah (via a Tawarruq arrangement) transaction is set out in Annexure 2. The Sale Price will represent the Purchase Price plus the applicable profit margin i.e. the aggregate periodic profit payments based on a fixed profit rate to be agreed at the time of issuance (if applicable) plus the Discounted Amount (as defined hereinafter) calculated at the issue date of each relevant Sukuk issuance (if applicable). “Discounted Amount” means the difference between: (i) the nominal value of the relevant Sukuk or (ii) the accreted value of the relevant IMTN (whichever is applicable) and the Purchase Price of the relevant Sukuk, in the case of Sukuk issued at a discount. DINB (as part of its obligation to pay the Sale Price) shall make periodic profit payments in the case of IMTNs with profit payments or one-off payment to the Sukukholders in the case of Sukuk without periodic profit payments (“One-off Payment”). At (i) the maturity date of the Sukuk; or (ii) upon the declaration of an Event of Default whichever is earlier, DINB (as part of its obligation to pay the Sale Price) will pay the Sukukholders all amounts then outstanding on the Sale Price as final settlement of the same subject to the Redemption Rebate (as defined hereinafter) (if applicable), upon which the Sukuk will be cancelled. In the case of IMTNs A Redemption Rebate will be granted by the holders of the IMTNs (“IMTNholders”) if the IMTNs are redeemed prior to the maturity date. “Redemption Rebate” means the difference between (a) the Sale Price at issue date and (b) the Sale Price calculated up to the date of the declaration of an Event of Default. For purposes of calculating the Redemption Rebate, (a) the Sale Price at issue date shall be calculated based on the following formula: Sale Price = Purchase Price plus the aggregate periodic profit payments plus the Discounted Amount calculated at the issue date of each relevant Sukuk issuance (if applicable) and (b) the Sale Price calculated up to the date of the date of the declaration of an Event of Default shall be calculated based on the following formula: Sale Price = Purchase Price plus the aggregate periodic profit payments up to the date of the declaration of an Event of Default plus the Discounted Amount calculated at the issue date of each relevant Sukuk issuance (if applicable). Page 5 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential The Sale Price payable for the IMTNs on the maturity date or upon the declaration of an Event of Default shall be calculated based on the following formula: the Sale Price at issue date less (a) the aggregate profit payments paid (if any), (b) the Redemption Rebate (if applicable), (c) the Premium Amount (if applicable) and (d) the Discounted Amount Rebate (if applicable). “Discounted Amount Rebate” means the difference between (a) the Discounted Amount calculated up to the maturity date and (b) the Discounted Amount calculated up to an Event of Default, and only applies in the case of an Event of Default and in the case of IMTNs without periodic profit payments. “Premium Amount” means the difference between the Purchase Price of the relevant IMTN and the nominal value of the relevant IMTN, in the case of IMTNs issued at a premium. In the case of ICPs The Sale Price Payable for the ICPs on the maturity date or upon the declaration of an Event of Default shall be the nominal value (Purchase Price plus the Discounted Amount) of the ICPs. (c) Programme Size : The aggregate nominal value of the Sukuk outstanding under the ICP/IMTN Programme at any point in time shall not exceed RM21.0 billion. (d) Issue Price : ICPs The ICPs shall be issued at a discount to face value and the issue price for each ICP issuance shall be calculated in accordance with the Operational Procedures for Securities Services issued by Malaysian Electronic Clearing Corporation Sdn Bhd (“MyClear”), as amended or substituted from time to time (“MyClear Procedures”). IMTNs The IMTNs shall be issued at par, at a premium or at a discount and the issue price for each IMTN issuance shall be calculated in accordance with the MyClear Procedures and/or such other rules and procedures issued by Bursa Malaysia Securities Berhad (“Bursa”) and/or such other regulatory authorities as may be applicable from time to time. (e) Tenure : Tenure of the ICP/IMTN Programme Fifty (50) years from the date of the first issue under the ICP/IMTN Programme. Page 6 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential Tenure of the ICPs The ICPs can be issued for any tenure of one (1), three (3), six (6), nine (9) and up to twelve (12) months as the Issuer may select, provided that the maturity date of the ICPs shall not extend beyond the tenure of the ICP/IMTN Programme. Tenure of the IMTNs The IMTNs shall have maturities of more than one (1) year but not exceeding fifty (50) years provided that the maturity date of the IMTNs shall not extend beyond the tenure of the ICP/IMTN Programme. (f) Availability Period : Upon completion of documentation and, unless waived by the JLAs, compliance of all conditions precedent and ending on 5.00p.m. in Kuala Lumpur on the final day of the Tenure of the ICP/IMTN Programme. (g) Profit Rate (%) : ICPs Not applicable. IMTNs To be determined prior to each issuance of the IMTNs. (h) Profit Payment Frequency and Profit Payment Basis : ICPs Not applicable. IMTNs The profit payments for each IMTN issue shall be payable in arrears on a semi-annual basis or such other period to be agreed between the Issuer and the JLAs and shall be calculated on an actual/365 days basis. (i) Yield to Maturity : ICPs To be determined prior to each issuance of the ICPs. IMTNs To be determined prior to each issuance of the IMTNs. (j) Guarantee : An irrevocable and unconditional guarantee (“the Guarantee”) by the Government in favour of the Facility Agent (on behalf of the Sukukholders) whereby the Government guarantees the proper and punctual payment by DINB of the Guaranteed Page 7 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential Amount (as defined below) and irrevocably and unconditionally undertakes, as a continuing obligation to the Facility Agent, that if for any reason and at any time and from time to time DINB fails to make payment of the Guaranteed Amount when due, to pay the amounts not so paid within thirty (30) days of the written demand by the Facility Agent (“Payment Period”). “Guaranteed Amount” refers to monies and liabilities which are now or shall at any time hereafter become due, owing or payable or expressed to be due owing or payable by DINB: (1) (2) in relation to the ICP/IMTN Programme: (a) the nominal value of the Sukuk (or in the case of IMTNs without periodic profit payment, the accreted value of the IMTNs); and (b) in the case of IMTNs with periodic profit payments only, any accrued profit thereon. in relation to the SFF-i Facility, the Selling Price, Provided that: (i) the aggregate outstanding principal amount under the SFF-i Facility guaranteed by the Guarantor shall not exceed RM8.0 billion at any one time; (ii) the combined aggregate outstanding nominal value of the Sukuk and the outstanding principal amount under the SFF-i Facility guaranteed by the Guarantor shall not exceed RM21.0 billion at any one time; (iii) any double-counting shall be disregarded; and (iv) the Guarantee Limit may, at the option of the Guarantor, be reduced accordingly so long as and subject to the Facility Agent’s confirmation that, the combined aggregate of (i) the outstanding nominal value of the Sukuk; (ii) the outstanding principal amount under the SFF-i Facility; (iii) the nominal value of any proposed Sukuk issuance as notified by the Issuer to the Facility Agent prior to the exercise of the option; and (iv) the principal amount of any proposed disbursement under the SFF-i Facility as notified by the Issuer to the Facility Agent prior to the exercise of the option, does Page 8 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential not exceed the reduced Guarantee Limit. “Guarantee Limit” means the total sum of Ringgit Malaysia Twenty One Billion (RM21,000,000,000.00) under the Guarantee. (k) Details of Utilisation of Proceeds : To finance the following Shariah-compliant capital expenditure and operating expenses in relation to the development of the Klang Valley Mass Rapid Transit project (“MRT Project”) including but not limited to the following:(i) Progressive payments to contractors; (ii) Purchase of equipments; (iii) Settlement of advances from any relevant entities; (iv) Pre-construction costs including but not limited to financing costs, financial advisor’s fee, advisory costs and fees for solicitors, project delivery partners and independent consultant engineers; (v) All operating expenses including but not limited to all pre-operating expenses, costs relating to the tender process, administrative, financial, legal and staff costs incurred by the Issuer and/or MRT Corp in relation to the MRT Project; and (vi) To refinance any bridging facility or other credit lines undertaken by the Issuer in relation to the MRT Project. (l) Rating : The ICP/IMTN Programme and the Sukuk issued under the ICP/IMTN Programme will not be rated. (m) Form and Denomination : The Sukuk shall be issued in accordance with (1) the “Participation and Operation Rules for Payment and Securities Services issued by MyClear (“MyClear Rules”), (2) MyClear Procedures, or their replacement thereof (collectively the “MyClear Rules and Procedures”) and/or (3) such other rules and procedures issued by Bursa and/or such other regulatory authorities as may be applicable from time to time. Each tranche of the Sukuk shall be represented by global certificate(s) in bearer form to be deposited with BNM and/or Bursa Depository, and is exchanged for definitive bearer form only in certain limited circumstances. The denomination of the Sukuk shall be RM100 and the Sukuk shall be issued in multiples Page 9 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential of RM1,000 at the time of issuance. (n) Status of the Sukuk : The Sukuk shall constitute direct, unconditional, unsecured and unsubordinated obligations of DINB 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 DINB, subject to those preferred by law and the Transaction Documents. (o) Status of the Guarantee : The liabilities of the Guarantor under the Guarantee shall rank at least equally and rateably pari passu with all its other unsecured liabilities, both actual and contingent (except liabilities which are subject to liens or rights of set-off wherein the aggregate amount of which is not material). (p) Mode of Issue : ICPs The ICPs may be issued through any of the following modes to be determined by the Issuer and the JLAs: (i) (ii) (iii) via competitive tender; via direct placement on a best effort basis; or via bought deal basis. IMTNs The IMTNs may be issued through any of the following modes to be determined by the Issuer and the JLAs: (i) (ii) (iii) (iv) (q) Listing Status : via direct placement on a best effort basis; via bought deal basis; or via book running on a best effort basis; or via issuance to retail investors including through Exchange Traded Bonds. ICPs The ICPs will not be listed on any stock exchanges. IMTNs The IMTNs may be listed on Bursa. (r) Assets : A. Murabahah Shariah-compliant and unencumbered assets which may be in the form of land, buildings, structure, shares, current assets, property (whether movable or immovable property) and commodities (excluding ribawi items in the category of medium of exchange such as currency, gold and silver) and with an ascribed value which is in compliance with the asset Page 10 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential pricing requirements stipulated under the Guidelines on Sukuk, owned by the Issuer, (and in case of assets owned by the Issuer’s subsidiaries and/or third party, the rights, interests and beneficial ownership therein) and identified by the Joint Lead Arrangers and the Issuer, and approved and endorsed by the Shariah Adviser. B. Murabahah (via a Tawarruq arrangement) Shariah-compliant commodities available at Bursa Suq Al-Sila’ as approved by its Shariah adviser (excluding ribawi items in the category of medium of exchange such as currency, gold and silver). (s) Conditions Precedent : The following in form and substance acceptable to the JLAs: 1. All the Transaction Documents have been duly executed by the parties thereto; 2. The delivery of the certified true copy of the following documents of the Issuer: a) Resolution from the Board of Directors of the Issuer approving amongst others, the ICP/IMTN Programme and execution of the Transaction Documents; b) Certified true copies of the Certificate of Incorporation, Memorandum and Articles of Association and latest Form 24 and Form 49 of the Issuer; and c) List of authorised signatories of the Issuer and their specimen signatures, duly certified by the company secretary or any of its directors; 3. Letter of Confirmation from the Issuer to the Facility Agent on the appointment of independent consultant engineer by MRT Corp, to verify progressive claims from contractors and to monitor the construction progress of the MRT Project; 4. Evidence in writing that the relevant approvals and orders required have been obtained from the Government and/or the Minister of Finance (including under the Loans Guarantee (Bodies Corporate) Act, 1965) and, where applicable, any other regulatory authorities in respect of the relevant tax and stamp duty exemptions and/or remissions in respect of the Sukuk and the ICP/IMTN Programme as advised by the Solicitors acting for the JLAs as may be required Page 11 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential for purposes of the Sukuk and the ICP/IMTN Programme; 5. Evidence of confirmation from the Shariah Adviser that the structure and mechanism of the ICP/IMTN Programme and the Transaction Documents are in compliance with Shariah; 6. Evidence that all transaction fees, costs and expenses will be paid in full relating to the Sukuk and the ICP/IMTN Programme; 7. The JLAs have received from their legal counsel a legal opinion addressed to them and the Facility Agent advising with respect to, among others, the legality, validity and enforceability of the Transaction Documents and a confirmation addressed to the JLAs that all the conditions precedent have been fulfilled; 8. Receipt of certificate from Issuer to confirm among others representations and warranties are true and accurate in all material respects and no Events of Default has occurred and is continuing; 9. A report of the relevant company search of the Issuer; and 10. A report of the relevant winding up search or the relevant statutory declaration of the Issuer. Additional conditions precedent for each issuance of Sukuk under the ICP/IMTN Programme: 1. The JLAs shall have received satisfactory confirmation from the Facility Agent on the amount outstanding under the syndicated revolving credit-i facility (“SFF-i Facility”) (if any) and the ICP/IMTN Programme (if any); and 2. The JLAs shall have received satisfactory confirmation from the Facility Agent and the Issuer that (A) the aggregate of: (i) the outstanding principal amount under the SFF-i Facility and (ii) the principal amount to be disbursed under the SFF-i Facility on the proposed date of disbursement under the SFF-i Facility does not exceed RM8.0 billion; and (B) the aggregate of (i) the outstanding nominal value of Sukuk issued under the ICP/IMTN Programme; (ii) the outstanding principal amount under the SFF-i Facility; (iii) the nominal value of the Sukuk to be issued and (iv) the principal amount to be disbursed under the SFF-i Facility on the proposed date of issuance of the Sukuk and/or the proposed date of disbursement under the Page 12 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential SFF-i Facility (where applicable), does not exceed RM21.0 billion. (t) Representations and Warranties of the Issuer : The representations and warranties of the Issuer are as follows: 1. It is a company duly established and existing under Malaysian laws; 2. It has the power to enter into, exercise its rights under and perform its obligations under the Transaction Documents to which it is a party, its Memorandum and Articles of Association incorporate provisions which authorise, and all necessary corporate action has been taken to authorise the Issuer to exercise its right and to perform its obligations under the Transaction Documents to which it is a party; 3. All necessary authorisations, licences, and consents required for its performance under the Transaction Documents to which it is a party to have been obtained, renewed, fulfilled and remain in full force and effect to ensure the legality, validity or enforceability in Malaysia of the Transaction Documents to which it is a party in accordance with their terms; 4. No registration and no payment of any duty or tax or other action whatsoever is necessary to ensure the validity, enforceability or admissibility as evidence in Malaysia of the Transaction Documents to which it is a party to; 5. Its entry into and the exercise of its rights under, and performance of its obligations under the Transaction Documents to which it is a party to, do not and will not violate any law or any provision contained in any agreement to which it is a party; 6. No litigation or arbitration is current or, to its knowledge, is threatened, which if adversely determined will have a Material Adverse Effect; For the purposes of this Principal Terms and Conditions, “Material Adverse Effect” means an event or an effect which will or may have a material adverse effect on (i) the financial condition of the Issuer; or (ii) the ability of the Issuer to perform any of its obligations under any of the Transaction Documents to which it is a party; 7. It is subject to civil and commercial law with respect to its obligations under the Transaction Page 13 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential Documents to which it is a party to, the transactions contemplated hereby and thereby constitute private and commercial acts done for private and commercial purposes and it is not entitled to immunity on the grounds of sovereignty or otherwise from any legal action or proceeding (which may include, without limitation, suits, attachment prior to judgment, execution or other enforcement in Malaysia); 8. Each of the Transaction Documents to which it is a party to is or will when executed and/or issued, be in full force and effect and constitutes, or will when executed or issued, constitutes its valid and legally binding obligations enforceable in accordance with its terms; 9. The Sukuk constitute direct, unconditional, unsecured and unsubordinated obligations of the Issuer and shall at all times rank pari passu without discrimination, preference or priority among themselves and at least pari passu with all other unsecured and unsubordinated obligations of the Issuer, subject to the provisions of the Transaction Documents and those preferred by law; 10. Its audited financial statements have been or will be prepared in accordance with approved accounting standards in Malaysia and together with the notes thereto present a true and fair view of the results of its operations for that year and the state of its affairs at that date and have been prepared, examined, reported on and approved in accordance with all procedures required by its memorandum and articles of association and the laws of Malaysia and audited and certified by qualified auditors; 11. The information furnished by the Issuer or on its behalf and with the knowledge of the Issuer, in connection with the ICP/IMTN Programme and the Transaction Documents does not contain any false or misleading statement or any material omission and any opinions contained therein were honestly made on reasonable grounds after its due and careful enquiry; and 12. No Event of Default has occurred and is continuing. (u) Events of Default : The Events of Default are as follows: 1. The Issuer fails to distribute/pay any amount in respect of the ICP/IMTN Programme and/or the Page 14 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential Transaction Documents as and when it falls due or when demanded from the Issuer, under any of the Transaction Documents; 2. The indebtedness of the Issuer under the SFF-i Facility becomes capable, in accordance with the relevant terms thereof, of being declared due prematurely by reason of a default by the Issuer in its obligations in respect of the same, or the Issuer fails to make any payment in respect thereof on the due date for such payment or if due on demand when demanded or the Security Interest created for any such indebtedness becomes enforceable and such declaration of indebtedness being due or payable or demanded is not discharged or disputed in good faith by the Issuer in a court of competent jurisdiction within thirty (30) days from the date of such declaration or demand; For the purposes of this Principal Terms and Conditions, “Security Interest” means 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. 3. Any representation or warranty made or given by the Issuer in any of the Transaction Documents to which it is a party to or which is contained in any certificate, document or statement furnished at any time pursuant to the terms of the Sukuk and/or any of the Transaction Documents to which it is a party to proves to have been incorrect or misleading in any material respect on or as of the date made or given or deemed made or deemed given; 4. Any representation or warranty made or given by the Guarantor under the Government Guarantee proves to have been incorrect or misleading in any material respect on or as of the date made or given or deemed made or deemed given; 5. The Issuer fails to observe or perform any of its obligations under any of the Transaction Documents or the Sukuk or under any undertaking or arrangement entered into in connection therewith other than an obligation of the type referred to in paragraph 1. of this section above and such failure shall continue for a period Page 15 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential of sixty (60) days or more from the date the Issuer receives written notification by the Facility Agent of the failure; 6. Any step or action is taken for the bankruptcy, winding up, dissolution or liquidation of the Issuer (including without limitation, the presentation of a petition for the bankruptcy of or winding up against the Issuer or the making of any order or the passing of any resolution for the winding up, dissolution or liquidation of the Issuer) unless such petition or order has been struck out, withdrawn, set aside or stayed within sixty (60) days of the petition or order being served on the Issuer; 7. Any consent, authorisation, licence or approval or declaration to governmental or public bodies or authorities required by the Issuer to authorise or required by the Issuer in connection with the execution, issue, delivery, validity, legality, enforceability or admissibility in evidence of any of the Transaction Documents or the performance by the Issuer of its obligations under any of the Transaction Documents as the case may be, is not approved or is revoked or expired or is not renewed or otherwise ceases to be in full force and effect and such non-approval, revocation, expiration, or non-renewal continues for thirty (30 days or more from the date the Issuer has been notified in writing by the Facility Agent of such failure, unless in respect of the afore going, such non-approval, revocation, expiration, or nonrenewal will not have a Material Adverse Effect; 8. At any time any provision of any of the Transaction Documents relating to the payment obligations of the Issuer and/or the Guarantor is or becomes, for any reason, invalid, illegal, void, voidable or unenforceable; 9. The Issuer enters into any composition or arrangement with or for the benefit of its creditors (including pursuant to Section 176 of the Companies Act 1965) or a moratorium is agreed or declared in respect of or affecting all or a substantial part of any of its financings (whether conventional or based on Shariah principles); 10. 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 Page 16 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential thing to repudiate any of the Transaction Documents to which it is a party. (x) Covenants : The covenants of the Issuer are as follows: 1. The Issuer shall ensure that its directors shall, at some date no later than thirty (30) days after the audited financial results of DINB have become available (which shall be available no later than one hundred and eighty (180) days after the end of its financial year), cause to be made out and lodged with the Companies Commission of Malaysia and delivered to the Facility Agent the audited profit and loss account and the audited balance sheet as at the end of the financial year to which the audited profit and loss account relates; 2. The Issuer shall immediately notify the Facility Agent and the Government as soon as it becomes aware of: (i) any Event of Default; (ii) any Material Adverse Effect on the Issuer; or (iii) any other matters that may materially prejudice the interests of the Sukuk holders or any of them. 3. So far as is required by law, the Issuer shall execute all such further documents and do all such further acts and things as may be necessary at any time or times to give further effect to the terms and conditions of the Transaction Documents to which it is a party; 4. The Issuer shall carry out its business and affairs in a proper and efficient manner; 5. The Issuer shall promptly perform and carry out all its obligations under the Transaction Documents to which it is a party and the terms and conditions of the Sukuk (including but not limited to redeeming the Sukuk on the relevant maturity date(s) or any other date on which the Sukuk are due and payable) and ensure that it shall immediately notify the Facility Agent in the event that the Issuer is unable to fulfil or comply with any of the provisions of the Transaction Documents; 6. The Issuer shall promptly comply with all applicable laws, regulations and guidelines relating to the entry into and performance by the Page 17 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential Issuer of its obligations under the Transaction Documents to which it is a party; 7. The Issuer will promptly give to the Facility Agent any information as the Facility Agent may reasonably require relating to its affairs in connection with the performance of its duties and the exercise of its powers to the extent permitted under the law; 8. The Issuer will instruct its auditors to disclose to the Facility Agent such information as the Facility Agent may reasonably require in connection with any calculation or matter arising under the Transaction Documents or as the Facility Agent may reasonably require for the purpose of performing its duties and exercising its powers as Facility Agent; 9. The Issuer shall comply with its obligations under the Central Securities Depository and Paying Agency Rules issued by MyClear, as modified or revised or substituted from time to time by MyClear and without prejudice to the generality of the foregoing, maintain at all times a paying agent with a specified office in Malaysia in respect of payments in relation to the Sukuk in accordance with the relevant laws and regulations; 10. The Issuer shall obtain and promptly renew from time to time, and to the extent permitted by law, promptly deliver or procure the delivery to the Facility Agent upon demand certified true copies of any and all licences, authorisations, approvals, consents and exemptions as may be necessary or desirable to ensure the validity, enforceability or priority of its liabilities and obligations or the rights of the Sukukholders (or any of them) under the Transaction Documents, and shall comply with the terms of the same; 11. The Issuer shall utilise the proceeds from the ICP/IMTN Programme in accordance with the purposes as set out herein; 12. The Issuer shall ensure that (A) the aggregate of: (i) the outstanding principal amount under the SFF-i Facility and (ii) the principal amount to be disbursed under the SFF-i Facility on the proposed date of disbursement under the SFF-i Facility does not exceed RM8.0 billion; and (B) the aggregate of (i) the outstanding nominal value of Sukuk issued under the ICP/IMTN Programme; (ii) the outstanding principal amount under the SFF-i Facility, (iii) the nominal value of the Sukuk to be issued and (iv) the principal amount to be Page 18 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential disbursed under the SFF-i Facility on the proposed date of issuance of the Sukuk and/or the proposed date of disbursement under the SFF-i Facility (where applicable), does not exceed RM21.0 Billion; and 13. The Issuer shall not (without the prior written consent of the Facility Agent and which shall not be unreasonably withheld), reduce or in any way whatsoever alter except increase, its authorised or paid-up capital whether by varying the amount, structure or value thereof or the rights attached thereto or convert any of its share capital into stock, or by consolidation, dividing or sub-dividing all or any of its shares or add to, delete or amend its Memorandum and Articles of Association in a manner inconsistent with the Transaction Documents. (y) Other terms and conditions of the issue (i) Transferability : The Sukuk are transferable. (ii) Redemption : Unless previously redeemed, purchased or cancelled, all outstanding Sukuk will be redeemed by the Issuer at 100% of their nominal value on their respective maturity dates. (iii) Repurchase and Cancellation : The Issuer may at any time purchase the Sukuk at any price in the open market or by private treaty, but these repurchased Sukuk shall be cancelled and cannot be reissued. (iv) Transaction Documents : (a) Programme Agreement; (b) Agency Agreement; (c) Supplemental Agency Agreement; (d) Second Supplemental Agency Agreement; (e) Government Guarantee; (f) Securities Lodgement Form; (g) Tender Panel Agreement; and (h) other relevant agreements agreed between the parties that may be required to complete the ICP/IMTN Programme as advised by the JLAs’ legal counsel and agreed by the Issuer. (v) 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 Page 19 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential withholding or deduction is required by law (in which event the Issuer 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) Provided That no such additional amount shall be payable in respect of any Sukuk presented for payment:(1) by or on behalf of a payee who is liable to such taxes, duties, assessments or governmental charges in respect of such Sukuk by reason of it being a non-resident of Malaysia for tax purposes; or (2) by or on behalf of a payee who would not be liable or subject to such withholding or deduction by making declaration of residence in Malaysia or other similar claim for exemption to the relevant tax authority; or (3) more than thirty (30) days after the Relevant Date, unless the payee is entitled to such additional amount upon presentation of such Sukuk for payment on the last day of such period of thirty (30) days. For the avoidance of doubt, paragraph (3) shall not apply to such payee falling under paragraphs (1) or (2) above. For the purpose of this term sheet, “Relevant Date” shall mean the date on which the payment first become due but, if the full amount of the money payable has not been received by the Facility Agent on or before the due date, it shall mean the date on which, the full payment of money having been so received. (vi) Governing Laws : Laws of Malaysia. (vii) Jurisdiction : DINB shall unconditionally and irrevocably submit to the exclusive jurisdiction of the courts of Malaysia. (viii) Special Condition : The Issuer shall ensure and/or procure that the Minister of Finance (Incorporated) holds directly and/or indirectly at least fifty one per centum (51%) of the ordinary paid-up share capital of the Issuer at all times. (ix) Increase in : Programme Limit The limit of the ICP/IMTN Programme of Ringgit Malaysia Twenty One Billion (RM21,000,000,000.00) in nominal value may, at the option of the Issuer, and without further reference to or consent by the Sukukholders, be increased to an amount exceeding Page 20 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential Ringgit Malaysia Twenty One Billion (RM21,000,000,000.00) in nominal value, provided that any Sukuk issued pursuant to the increased limit shall be irrevocably and unconditionally guaranteed by the Government. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK Page 21 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential Annexure 1 Sukukholders 4 Periodic Profit Payment/ One-off Payment Facility Agent (acting on behalf of the Sukukholders) 3 Sale Price 1 Purchases Assets 3 Sells Assets 2 2 Proceeds Issues Sukuk 1 Purchase Price DINB Step 1 From time to time, DINB and the Facility Agent (acting on behalf of the Sukukholders) will execute an asset purchase agreement (“Purchase Agreement”) under which the Facility Agent shall purchase certain Shariahcompliant assets (“Assets”) from DINB for an asset purchase price (“Purchase Price”). The Purchase Price will be the amount to be disbursed under the Sukuk and will be in compliance with the asset pricing requirements under the Securities Commission Malaysia (“SC”)’s Guidelines on Sukuk (revised and effective on 8 January 2014) as may be amended from time to time (“Guidelines on Sukuk”). Step 2 The Issuer shall then issue Sukuk to evidence the Sukukholders’ ownership of the Assets and thereafter, upon the onward sale of the Assets to DINB, the Sale Price and the rights of the Sukukholders via the Facility Agent under the Sale Agreement. The proceeds received from the Sukukholders shall be used by the Facility Agent to pay the Purchase Price. Step 3 Pursuant to a Murabahah arrangement (“Murabahah Arrangement”), the Facility Agent (acting on behalf of the Sukukholders) will then sell the Assets to DINB via a sale agreement (“Sale Agreement”) for an asset sale price (“Sale Price”), which shall be paid by DINB on a deferred basis and shall be evidenced by the Sukuk. Step 4 The Sale Price will represent the Purchase Price plus the applicable profit margin i.e. the aggregate periodic profit payments based on a fixed profit rate to be agreed at the time of issuance (if applicable) plus the Discounted Amount calculated at the issue date of each relevant Sukuk issuance (if applicable). Page 22 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential DINB (as part of its obligation to pay the Sale Price) shall make periodic profit payments in the case of IMTNs with profit payments or one-off payment to the Sukukholders in the case of Sukuk without periodic profit payments (“One-off Payment”). At (i) the maturity date of the Sukuk; or (ii) upon the declaration of an Event of Default whichever is earlier, DINB (as part of its obligation to pay the Sale Price) will pay the Sukukholders all amounts then outstanding on the Sale Price as final settlement of the same subject to the Redemption Rebate (if applicable), upon which the Sukuk will be cancelled. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK Page 23 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Private and Confidential Annexure 2 Facility Agent (acting on behalf of Sukukholders) 7 Periodic Profit Payment/ One-off Payment DINB (Purchase Agent) 2 Issue Sukuk Purchase Order 6 CTP Sale Agreement Commodity Buyer Step 2 Agency Agreement Sukuk Proceeds 1 DINB (Issuer / Purchaser) Step 1 1 5 Sell Commodities at Deferred Sale Price Facility Agent (Sub Agent) 3 CTP 6 Sell Commodities on spot Bursa Suq Al-Sila’ Sub Agency Agreement 1 3 CTP Purchase Agreement Commodity Seller Sell Commodities on spot The Facility Agent, on behalf of the Sukukholders, and the Issuer shall enter into an agency agreement (“Purchase Agency Agreement”), pursuant to which the Issuer is appointed as the agent of the Sukukholders (in such capacity, the “Purchase Agent”) for the purchase of Shariah-compliant commodities which would exclude ribawi items in the category of medium of exchange such as currency, gold and silver (“Commodities”). The Purchase Agent shall then enter into a sub-agency agreement (“Sub Agency Agreement”) to appoint the Facility Agent as a sub agent (in such capacity, the “Sub Agent”) to purchase the Commodities. Pursuant to a commodity Murabahah master agreement (“Commodity Murabahah Master Agreement”), prior to the date on which the relevant tranche of Sukuk is issued, the Issuer (as “Purchaser“) shall, from time to time, issue a purchase order (“Purchase Order”) in relation to the said tranche to the Purchase Agent and the Sub Agent. In the Purchase Order, the Purchaser will request the Purchase Agent and the Sub Agent to purchase the Commodities. The Purchaser shall irrevocably undertake to purchase the Commodities from the Sukukholders via the Sub Agent at the sale price (“Sale Price”) on a deferred basis. Page 24 of 25 DanaInfra Nasional Berhad ICP/IMTN Programme Principal Terms and Conditions Step 3 Private and Confidential The Sub Agent pursuant to an agreement (“CTP Purchase Agreement”) to be entered into between the Sub Agent and the commodity trading participant (“CTP”), will appoint the CTP to purchase the Commodities on a spot basis from the commodity supplier(s) in the Bursa Suq Al Sila’ (“Commodity Seller(s)”) at a purchase price (“Purchase Price”) which shall be an amount equivalent to the Sukuk proceeds. The Purchase Price shall be in line with the asset pricing requirements stipulated under the Guidelines on Sukuk. Step 4 The Issuer shall issue the Sukuk to the Sukukholders whereby the proceeds thereof shall be used to pay for the Purchase Price. The Sukuk shall evidence, amongst others, the Sukukholders’ ownership of the Commodities and subsequently once the Commodities are sold to the Purchaser, the Sukukholders’ entitlement to receive the Sale Price. Step 5 Thereafter, pursuant to a sale and purchase agreement (“Sale and Purchase Agreement”), the Sub Agent (acting on behalf of the Purchase Agent as agent to the Sukukholders) shall sell the Commodities to the Purchaser based on the Murabahah principle at the Sale Price. Step 6 Upon completion of such sale the Purchaser, pursuant to an agreement (“CTP Sale Agreement”) entered into between the Purchaser and the CTP, shall appoint the CTP to sell the Commodities to Bursa Malaysia Islamic Services Sdn. Bhd. (“Commodity Buyer”) on a spot basis for an amount equal to the Purchase Price. The Sale Price will represent the Purchase Price plus the applicable profit margin i.e. the aggregate periodic profit payments based on a fixed profit rate to be agreed at the time of issuance (if applicable) plus the Discounted Amount calculated at the issue date of each relevant Sukuk issuance (if applicable). Step 7 DINB (as part of its obligation to pay the Sale Price) shall make periodic profit payments in the case of IMTNs with profit payments or one-off payment to the Sukukholders in the case of Sukuk without periodic profit payments (“One-off Payment”). At (i) the maturity date of the Sukuk; or (ii) upon the declaration of an Event of Default whichever is earlier, DINB (as part of its obligation to pay the Sale Price) will pay the Sukukholders all amounts then outstanding on the Sale Price as final settlement of the same subject to the Redemption Rebate (if applicable), upon which the Sukuk will be cancelled. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK Page 25 of 25