PRINCIPAL TERMS AND CONDITIONS OF THE PROPOSED ISSUANCE OF RSLS- SPV1 (FOR PDS DEPARTMENT)

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1 1.01 BACKGROUND INFORMATION (a) Issuer Name Bumper Wood Sdn. Bhd. ( SPV1 ) (ii) Address Level P1, Menara Choy Fook On No. 1B, Jalan Yong Shook Lin Petaling Jaya Selangor Darul Ehsan (iii) Business Registration No U (iv) Date/Place of Incorporation 17 May 2004 / Kuala Lumpur, Malaysia (v) Date of Listing (vi) Status: : - Resident/Non Resident Controlled Company Resident controlled company. : - Bumiputera/Non- Bumiputera Controlled Company Non-bumiputera controlled company. (vii) Principal Activities Property holding and investment. A special purpose company incorporated in Malaysia for the purpose of implementing and carrying out the Proposed Debt Restructuring Scheme 1

2 (viii) Board Directors The directors of Bumper Wood Sdn. Bhd. as at 30 March 2007 are as follows: <-- No. Of Ordinary Shares Held --> Name Designation Nationality Direct % Indirect % Dawin Tang Keng Wai Director Malaysian Chew Chong Eu Director Malaysian (ix) Structure of Shareholdings and Names of Shareholders The shareholders of Bumper Wood Sdn. Bhd. as at 30 March 2007 are as follows: < -- No. Of Ordinary Shares Held - - > Name Federal Furniture Holdings (M) Berhad Place of Incorporation Direct % Indirect % Malaysia Note: * Upon completion of the sale of SPV1 Properties to SPV1, FFHB will dispose its entire shareholdings in SPV1 to a non-related and independent parties. (x) Share Capital - Authorised : 100,000 ordinary shares of RM1.00 each - Issued And Paid- Up : 2 ordinary shares of RM1.00 each 2

3 (b) Originator (in the case of asset-backed securities) Name (ii) Address (iii) Business Registration no. (iv) Date/place of incorporation (v) Date of listing (in case of public-listed company) (vi) Status : resident/non-resident controlled company : Bumiputera/non-Bumiputera controlled company (vii) Principal activities (viii) Boards of directors (ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders (x) Authorised and paid-up capital 3

4 1.02 PRINCIPAL TERMS AND CONDITIONS (a) Name of parties involved in the proposed transactions (where applicable) Principal adviser(s) / lead arranger(s) Aseambankers Malaysia Berhad (ii) Arranger (s) None (iii) Valuers Colliers, Jordan Lee & Jaafar (KL) Sdn. Bhd. and Mohd Nor & Partners (KL) Sdn. Bhd. (iv) Solicitors Lee Choon Wan & Co (v) Financial adviser (vi) Technical adviser (vii) Guarantor (viii) Trustee Amanah Raya Berhad (ix) Facility agent Aseambankers Malaysia Berhad (x) Primary subscriber(s) and amount subscribed (where applicable) Nil 4

5 (xi) Underwriter(s) and amount underwritten. The RSLS-SPV1 are not underwritten as they will be issued to the Affected Secured Lenders pursuant to the Proposed Debt Restructuring Exercise. (xii) Syariah adviser (where applicable), as the RSLS-SPV1 is not Islamic in principle. (xiii) Central depository Bank Negara Malaysia (xiv) Paying agent Bank Negara Malaysia (xv) Reporting accountant Ernst & Young (xvi) Others (please specify) Nil (b) Principal (Conventional/Islamic) Conventional (c) Facility description RM million zero coupon five (5) year RSLS of RM1.00 each in SPV 1 ( RSLS-SPV1 ) at an issue price of RM1.00 per RSLS-SPV1. However, the RSLS-SPV1 will carry a backend effective interest yield of 6.4% p.a. which will accrue on the RSLS-SPV1 until redemption of the RSLS-SPV1 or on the day immediately preceding the 5 th anniversary of the issue date, whichever is earlier. Amount of RSLS-SPV1 to be issued is as follows: Affected Secured Lenders RM* MIDF Amanah Investment Bank Berhad 13,425,194 (formerly known as Utama Merchant Bank Berhad) 5

6 Affected Secured Lenders CIMB Bank Berhad (as vested from CIMB Investment Bank Berhad) (formerly known as Commerce International Merchant Bankers Berhad) RM* 8,658,615 Malayan Banking Berhad 8,762,374 Affin Bank Berhad 4,475,817 Total 35,322,000 (d) Issue size (RM) RM million (e) Issue Price (RM) The RSLS-SPV1 is to be issued at a nominal value of RM1.00 each. (f) Tenor of the facility/issue The RSLS-SPV1 shall be for a period of five (5) years from and including the date of issuance and shall mature on the day immediately preceding the 5 th anniversary of the issue date or upon early redemption by the SPV1 via the disposal of the SPV1 Properties, whichever is earlier. Upon expiry, SPV1 shall be acquired by Federal Furniture Holdings (M) Berhad ( FFHB ) (subject to the provisions of the Intercreditors Agreement and the Trust Deed). (g) Interest/Coupon/Profit or equivalent rates (%) Zero coupon with backend effective interest yield of 6.4% p.a. which will accrue on the RSLS-SPV1 until full redemption of the RSLS-SPV1 or on the day immediately preceding the 5 th anniversary of the issue date, whichever is earlier. (h) Interest/Coupon/Profit Payment frequency & basis The back-end effective interest yield of 6.4% p.a. is payable by SPV1 upon full redemption of the RSLS-SPV1 or on the day immediately preceding the 5 th anniversary of the issue date, whichever is earlier. 6

7 Note:- The back-end effective interest yield of 6.4% p.a. is payable only in the event of excess proceeds from the disposal of SPV1 Properties after the full redemption of the RSLS-SPV1. Yield to Maturity (%) (j) Security/Collateral (if any) The RSLS-SPV1 will be secured by the following securities: (a) a first party first legal charge over (collectively SPV1 Properties ): (ii) (iii) H.S.(D) PT No 34809, Mukim Petaling, Daerah Petaling, Negeri Selangor Darul Ehsan; Geran Lot 13916, Bandar Seremban, Daerah Seremban, Negeri Sembilan; and Geran Lot 13917, Bandar Seremban, Daerah Seremban, Negeri Sembilan. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 7

8 (b) a third party third legal charge over: P.N Lot 5611, Mukim Tanggul, Daerah Hulu Terengganu, Negeri Terengganu ( Terengganu Land ); or GM114 Lot No. 1348, Mukim of Petaling, Daerah of Petaling, Negeri Selangor Darul Ehsan and lease over all that piece of land held under GM116 Lot No. 1347, Mukim of Petaling, Daerah of Petaling, Negeri Selangor Darul Ehsan (collectively Puchong Land ); as the case may be, as provided for in the Trust Deed and the Intercreditors Agreement; (ii) (iii) P.N Lot 1611, Pekan Chembong, Daerah Rembau, Negeri Sembilan; HS(D) , P.T. 11, Bandar Petaling Jaya, Daerah Petaling, Negeri Selangor (formerly QTR 1257 L.O No. PJ 143/62); and (iv) HS(D) , P.T.13, Bandar Petaling Jaya, Daerah Petaling, Negeri Selangor (formerly QTR 105 L.O No. PJ 426/62). In addition, FFHB will compensate for the difference between the value of the Terengganu Land (RM6.3 million) and the Puchong Land (RM4.8 million, being a 10% discount to the value of the Puchong Land as valued by Messrs Colliers, Jordan Lee & Jaafar Sdn Bhd). Further, FFHB will also compensate for any shortfall in the event that the disposal of the Puchong Land to third parties is below RM4.8 million. (k) Details on utilisation of proceeds To repay the debt owing to the lenders. (l) Sinking fund (if any) (m) Rating. Pursuant to Paragraph 7.02(b) of the SC s Guidelines on the Offering of Private Debt Securities a rating is not required for any issue, offer or invitation of PDS which are non-transferable and non-tradable. 8

9 (n) Form and Denomination The RSLS-SPV1 shall be represented at all times by a global loan stock certificate which shall be deposited with Bank Negara Malaysia as the central depository. The RSLS-SPV1 shall be issued in multiples of 1,000 at a nominal value of RM1.00 each. (o) Mode of Issue Non-tender. As the RSLS-SPV1 will only be issued to the Affected Secured Lenders and will not be listed and quoted on the Bursa Malaysia Securities Berhad, the RSLS-SPV1 will be issued under the Real Time Electronic Transfer of Funds and Securities ("RENTAS") and be reported under the Fully Automated System for Tendering ( FAST ). The RSLS-SPV1 shall at all times comply with the rules and requirements of FAST and the RENTAS. (p) Selling Restriction Non-tradable and non-transferable (q) Listing Status The RSLS-SPV1 will not be listed on any exchange. (r) Minimum Level of Subscription (RM or %) 100% (s) Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained None. (t) Additional information for Islamic PDS: Islamic principle as the RSLS-SPV1 is not an Islamic PDS Identified assets as the RSLS-SPV1 is not an Islamic PDS Purchase and selling price/rental as the RSLS-SPV1 is not an Islamic PDS 9

10 (u) Conditions Precedents All conditions precedent set out in the Debt Restructuring Agreement dated 29 June 2005 have been fulfilled THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 10

11 (v) Representations and Warranties SPV1 represents and warrants as follows: (a) (b) (c) (d) (e) Incorporation: SPV1 is duly incorporated and validly existing under the laws of Malaysia; Powers and authorisations: the Memorandum and Articles of Association of SPV1 include provisions which give power to and all necessary corporate authority has been obtained and action taken, for SPV1 to own its assets, carry on its business and operation as they are now being conducted, and for SPV1 to execute and deliver, and perform the transactions contemplated in these presents and each of the Issue Documents, and the Issue Documents constitute legal, valid and binding obligations of SPV1 enforceable in accordance with their respective terms; Ownership: SPV1 is the sole legal and beneficial owner of all its respective assets and properties; Non-violation: neither the execution nor delivery of these presents and the Issue Documents nor the performance of any of the transactions contemplated therein including the issue of the RSLS-SPV1 will contravene or constitute a default under, or cause to be exceeded any limitation on SPV1, and/or the powers of its respective directors imposed by or contained in: any law, regulation, judgment, ordinance by which SPV1 or any of its respective assets is bound or affected, (ii) the Memorandum and Articles of Association of SPV1 or (iii) any agreement to which SPV1 is a party or by which SPV1 is bound; Consents: that all consents, clearances, approvals, authorisations and orders of any court, government department or other regulatory body in Malaysia or elsewhere and all corporate consents, approvals and authorisations required by SPV1 for or in connection with the execution and delivery of the Issue Documents and the offering and issue of the RSLS- SPV1 and the performance of the terms of the RSLS-SPV1 and the Issue Documents have been obtained and SPV1 will take steps pursuant to law to ensure that all such consents, clearances, approvals, authorisations and orders will remain in full force and effect; 11

12 (f) (g) (h) (j) (k) (l) No Default: that no authorisation, approval, consent, licence, exemption, registration, recording, filing or notarisation and no payment of any duty or tax and no other action whatsoever which has been duly and unconditionally obtained, made or taken is necessary or desirable to ensure the validity, enforceability or priority of the liabilities and obligations of SPV1 or the rights of the Trustee under the Security Documents, other than: (aa) registration of the Security Documents with the Companies Commission of Malaysia in accordance with Section 108 of the Companies Act; (bb) registration of the Legal Charges with the relevant land office or registry and (cc) registration of the power of attorney under the Trust Deed with the High Court of Malaya; Event of Default: no Event of Default has occurred or is subsisting and no event has occurred which with the giving of notice or the lapse of time or both would constitute an Event of Default; Litigation & Arbitration: no litigation arbitration or administrative proceeding or claim which might by itself or together with any other such proceedings or claims, either have a material adverse effect on SPV1, is presently in progress or pending or, to the best of the knowledge information and belief of SPV1, threatened against SPV1 and/or any of its assets; Tax Liabilities: all necessary returns have been delivered by or on behalf of SPV1 to the relevant taxation authorities and SPV1 is not in default in the payment of any taxes, and no claim is being asserted with respect to taxes which is not disclosed in the financial statements referred to in Clause 5.1(j) (of the Trust Deed); Financial Statements: the financial statements and other financial information (both audited and unaudited) of SPV1 have been prepared on a basis consistently applied in accordance with generally accepted accounting principles in Malaysia and give a true and fair view of its respective assets and liabilities, the results of its operations, the state of its affairs, the financial condition and changes in its financial condition, taken as a whole, as at the respective dates indicated therein, and in particular accurately disclose or reserve against all its liabilities (actual or contingent); Changes in financial position: there has been no material adverse change in the financial condition of SPV1 since the date of the last financial statement or information provided by SPV1 to the Trustee; Contract or Commitment: since the respective dates of the aforesaid financial statements SPV1 has not entered into any contract or commitment of an unusual or onerous nature (other than in the ordinary course of business) which may be material for disclosure and SPV1 has carried on its business in the ordinary and usual course; 12

13 (m) No Other Security Interests: none of the assets of SPV1 is affected by any Security Interests, and SPV1 is not a party to, nor are any of its respective assets bound by any order, agreement or instrument under which SPV1 is, or in certain events, may be required to create assume or permit to arise any Security Interest, other than those Security Interests created pursuant to the Security Documents; (n) (o) (p) (q) Winding Up Proceedings: save and except as previously disclosed to the Trustee in writing, SPV1 is solvent and able to pay its debts as and when they fall due and save and except as previously disclosed to the Trustee in writing, no event has occurred and no circumstances exist which may result in SPV1 being deemed unable to pay its respective debts within the meaning of Section 218(2) of the Companies Act and there are no windingup proceedings whether current, pending or threatened against SPV1 and SPV1 has not entered into any arrangement or composition generally with its respective creditors; Information: the information furnished by SPV1 in connection with these presents and the Issue Documents do not contain any untrue statement or omit to state any fact the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading and all expressions of expectation, intention, belief and opinion contained therein were honestly made on reasonable grounds after due and careful enquiry by SPV1; Immunity: neither SPV1 nor any of its respective assets are entitled to immunity from any suit, execution, attachment or other legal process; and Disclosure: SPV1 has fully disclosed in writing all facts relating to SPV1 which SPV1 knows or should reasonably know and which are material for disclosure to the Trustee in the context of these presents and the Issue Documents. Events of default Each of the following shall be an Event of Default:- (a) (b) Non-Payment and Failure to Redeem: SPV1 fails to redeem the RSLS- SPV1 and/or pay the backend effective interest yield of 6.4% per annum payable on the RSLS-SPV1 on the Maturity Date or on demand if so payable; or Breach of Undertaking: SPV1 commits or threatens to commit a breach of any covenant term stipulation or undertaking herein contained or in the Issue Documents or any other documents between the Trustee and SPV1 or any other party and executed pursuant to or referred to in these presents and/or in the Issue Documents and on the part of SPV1 to be observed and performed and in the opinion of the Trustee has failed to remedy or take adequate steps to remedy the same within fourteen (14) Business Days after receipt of written notice from the Trustee; or 13

14 (c) (d) (e) (f) (g) (h) Misrepresentation and Inaccuracy In Warranty: any representation or warranty made in connection with the execution and delivery of these presents and/or the Issue Documents shall be found to have been incorrect in any material respect and shall continue to be incorrect for a period of fourteen (14) Business Days after receipt of written notice thereof shall have been given to SPV1 by the Trustee; or Repudiation: SPV1 repudiates these presents and/or the Issue Documents or SPV1 does or causes to be done any act or thing evidencing an intention to repudiate these presents and/or the Issue Documents; or Cessation of business: SPV1 substantially changes the nature or scope of its business or suspends or threatens to suspend a substantial part of its present business operations which SPV1 now conducts directly or indirectly, or ceases or threatens to cease to carry on its business, or disposes of a substantial part of its businesses or assets (other than pursuant to and in accordance with the provisions of the Intercreditors Agreement) or any governmental authority expropriates or threatens to expropriate all or part of the assets of SPV1, and the result of any of the foregoing will, in the determination of the Trustee, result in a material adverse effect on SPV1; or Insolvency: SPV1 is deemed unable to pay any of its debts within the meaning of Section 218(2) of the Companies Act or becomes unable to pay any of its debts as they fall due or suspend or threaten to suspend making payments (whether of principal or interest) with respect to all or any class of its respective debts; or Composition, winding up: SPV1 convenes a meeting generally of its respective creditors or proposes or makes any arrangement or composition with, or any assignment for the benefit of, its respective creditors generally or a petition is presented or a meeting is convened for the purpose of considering a resolution or other steps are taken for making an administration order against or for the winding-up of SPV1 (other than for the purpose of and followed by a reconstruction previously approved in writing by the Trustee, unless during or following such reconstruction SPV1 becomes or is declared to be insolvent); or Appointment of receiver, legal process: an encumbrancer takes possession of, or a trustee or administrative or other receiver or similar officer is appointed in respect of, all or any part of the assets, business or undertakings of SPV1, or distress or any form of execution is levied, enforced or instituted against any of such assets, business or undertakings and is not discharged within fourteen (14) Business Days after being levied, enforced or instituted, or any Security Interest which may for the time being affect any of the said assets, business or undertakings becomes enforceable; or 14

15 (j) (k) (l) (m) (n) (o) (p) Judgment: a judgment is obtained against SPV1 and in the opinion of the Trustee, such event has or could have a material adverse effect on SPV1 or SPV1 shall fail to satisfy any judgment passed against SPV1 by any court of competent jurisdiction, and no appeal against such judgment is pending in any appropriate appellate court in Malaysia; or Nationalisation or Government Action: all or a substantial (as determined by the Trustee in its absolute discretion) part of the assets, business and undertakings of SPV1 is seized, nationalised, expropriated or compulsorily acquired by or under the authority of any governmental body or any person or entity acting under any governmental authority save where adequate compensation has been paid, or any such body, person or entity curtails the authority of SPV1 in the overall conduct of its respective business or operations; or Analogous Proceedings: anything analogous to any of the events or states of affair set out in Clauses 11.1 (e), (f), (g), (h), and (j) (of the Trust Deed) occurs under any applicable laws; or False Financial Statements: SPV1 shall have furnished false financial statements or other data required by the Trustee or materially misstate such information; or Qualified Financial Statements: any of the financial statements delivered to the Trustee shall be qualified by the Auditors that in its view, SPV1 cannot continue to operate as on-going concerns; or Cross-Default: any loan, debt, guarantee or other obligation whatsoever constituting indebtedness of SPV1 become due and if such indebtedness shall not be paid when due, or is capable of being declared due prior to its scheduled maturity (by demand acceleration or otherwise) or any guarantee of SPV1 is not discharged at maturity or when called or if SPV1 is otherwise in breach of or default under any agreement, instrument, deed or mortgage under or pursuant to which such indebtedness or guarantee was created, incurred or assumed, or if any securities created for any other indebtedness becomes enforceable; or Inability: an event or events has or have occurred or a situation exists which could or might, in the opinion of the Trustee and notified to SPV1, prejudice the ability of SPV1 to perform any of its obligations hereunder or under the Issue Documents in accordance with the terms thereof; or Moratorium: SPV1 enters into or proposes to enter into, or there is declared by any competent court or authority, a moratorium on the payment of indebtedness or other suspension of payments generally; or 15

16 (q) (r) (s) (t) (u) (v) Jeopardy: in the opinion of the Trustee, any securities which may be provided hereafter is in jeopardy or if an event or events have occurred or a situation exists or arises which, in the opinion of the Trustee, gives ground for believing that any security from time to time held by or available to the Trustee in respect of or on account of the RSLS-SPV1 (or any part thereof) is in jeopardy; or Suspension by the Exchange: in the event that the RSLS-SPV1 are hereafter secured by a charge of shares of companies listed and quoted by the Exchange or any other Stock Exchange, the trading of such public quoted shares is suspended by the respective Stock Exchange whether such suspension is at the request of SPV1 or otherwise, and the period of such suspension exceeds ten (10) days or such time frame as shall be allowed by the Stock Exchange, whichever is earlier; or Invalidity and/or Unenforceability: any provision of these presents and/or the Issue Documents is or becomes, for any reason, invalid or unenforceable and/or any of the Issue Documents is rejected for registration or otherwise fails to be registered with the Companies Commission of Malaysia, the land registry and/or the other relevant authorities, as the case may be, for any reason whatsoever; or Consent: any consent, authorisation, licence or approval of or registration with or declaration to governmental or public authorities or bodies or courts (if any) required by SPV1 to authorise, or in connection with the execution, issue, sale, delivery, validity, enforceability or admissibility in evidence of these presents and/or the Issue Documents and/or the performance by SPV1 under these presents or the Issue Documents, as the case may be, is or are modified to such degree as would be materially prejudicial to the interests of the Trustee or the Loan Stockholders or is or are not granted or is or are revoked, terminated, expired, not renewed and/or otherwise cease to be in full force and effect; or Litigation: any litigation, arbitration or administrative proceedings has been commenced against the SPV1 which in the reasonable opinion of the Trustee, would have a Material Adverse Effect; or Revocation, etc of Licence and Approvals: there is a revocation, withholding or modification of any licence, authorisation, approval or consent which in the opinion of the Trustee may have a Material Adverse Effect on SPV1, or impairs or prejudices the ability of SPV1 to comply with the terms and conditions of the RSLS-SPV1 and/or the Issue Documents; or 16

17 (w) Invalidity: any provision of the Issue Documents is or becomes, for any reason, invalid, illegal, void or unenforceable or if any law is brought into effect which purports to render ineffective or invalid or voidable any provision of the Issue Documents or which would prevent SPV1 from performing any of their obligations under the Issue Documents. Principal terms and conditions for warrants as there are no warrants attached to the RSLS-SPV1. Other principal terms and conditions for the issue Positive Covenants Affirmative Covenants by SPV1: SPV1 covenants with the Trustee that so long as any of the RSLS-SPV1 shall remain outstanding it shall, save with the previous sanction of the Loan Stockholders by an Ordinary Resolution: (a) (b) Carry On Business: at all times, carry on, conduct and operate its respective business, operation and affair in a reasonable manner with due diligence and efficiency and properly and in accordance with its Memorandum and Articles of Association as amended from time to time, and in addition to but without derogation from the foregoing, keep full and particular accounts of the carrying on of its businesses and cause the same to be properly posted up to date and punctually pay or cause to be paid all rents, rates, assessments, taxes and deductions in respect of any social security schemes and/or employee provident fund legislation and all outgoings payable in respect of the premises at which SPV1 carry on its business and obtain and maintain all necessary licences in respect thereof and comply with all regulations relating to the carrying on of SPV1 s business; Consents: obtain and promptly renew from time to time, and promptly deliver to the Trustee certified copies of any authorisation, approval, consent, licence, exemption, registration, recording, filing or notarisation as may be necessary or desirable to ensure the validity, enforceability or priority of the liabilities and obligations of SPV1 or the rights of the Trustee under these presents and the Issue Documents and (ii) relating to the carrying on of its business at the premises at which it carries on such business, and in both cases, to comply at all times with the terms of the same; 17

18 (c) (d) (e) Loan Stockholders' Meeting: from time to time, on application made to SPV1 by the Trustee on behalf of the Loan Stockholders holding not less than one-tenth (1/10th) in nominal value of the RSLS-SPV1 for the time being outstanding, and delivered to SPV1 at its registered address, by giving notice to each Loan Stockholder at its address recorded on the Register of the Loan Stockholders, summon a meeting of the Loan Stockholders to consider the accounts and balance sheet last lodged with the Trustee and to give to the Trustee directions in relation to the exercise of the Trustee's powers. Such meeting shall be held at a time and place specified in the notice and in accordance with the provisions of Schedule 3 (of the Trust Deed); Preparation of Accounts: prepare the financial statements referred to in Clause 5.1(j) (of the Trust Deed) on a basis consistently applied in accordance with generally accepted accounting principles in Malaysia and procure and ensure that those financial statements shall give a true and fair view of the results of the operations of SPV1 for the period in question and the state of affairs of SPV1 for the period to which the financial statements are made up and shall disclose all respective liabilities (actual or contingent) of SPV1; Financial Statements: deliver to the Trustee and/or the Companies Commission of Malaysia, as the case may be: as soon as they become available and in any event within two (2) weeks from the date of SPV1 s annual general meeting, copies of the annual audited accounts of SPV1; (ii) (iii) quarterly and half-yearly financial statements to be delivered not later than sixty (60) days after the end of each quarter and half-year of the respective financial years of SPV1; and promptly, such additional financial or other information in respect of SPV1 as the Trustee and/or the Companies Commission of Malaysia may from time to time request. In this respect, SPV1 shall also deliver to the Trustee, any other accounts, reports, notices, statements or circulars issued to the shareholders of SPV1, and any offer in writing received by SPV1 of any takeover scheme relating to the shares of SPV1; (f) Maintaining Records: maintain adequate financial, statutory and all other necessary records to reflect correctly in accordance with consistently maintained sound accounting practices the respective operations and financial condition of SPV1; 18

19 (g) (h) (j) (k) (l) Certificate to Trustee: provide to the Trustee at least annually, a certificate that SPV1 has complied with its obligations under this Trust Deed and the Issue Documents and that there did not exist or had not existed, from the Issue Date, any Event of Default, and if such is not the case, to specify the same; Sending Accounts to Loan Stockholders: send to every Loan Stockholder a copy of its annual report/return and accounts together with all documents required by law to be annexed thereto; Inspection of Offices: allow and cause to be allowed the Trustee, the Auditors, their respective agents and servants to inspect the offices, branches, place of business and operations of SPV1, all records and documents at any office branch or place of business of SPV1 or elsewhere and all records kept by any other authorities or persons so far as such records relate to or affect the respective properties assets and business of SPV1 and give to the Trustee, the Auditors or any person authorised by the Trustee or Auditors to inspect such records such written authorisation as may be required; and to make inventories and records thereof; Assistance to Trustee: to the extent permitted by law, give to the Trustee such information as it shall require for the purpose of the discharge of the duties, obligations and discretion vested in it hereunder or by operation of law; Rates and Taxes: punctually pay all rents, rates, taxes, duties, fees, impositions and all other outgoings whatsoever payable from time to time in respect of the premises at which it carries on its business and its assets and if requested in writing, to forward copies of the receipts in respect of such payments to the Trustee and perform and observe all covenants, terms and conditions, express or implied and on its part to be performed and observed and contained in any document or instrument of title or lease; Insurance: keep the assets, business, properties and undertakings of SPV1 insured with such insurance companies and/or underwriters in accordance with sound commercial practice and in such form and extent, usual for assets similar those assets, business, properties and undertakings and acceptable to the Trustee, and produce to the Trustee on request, documentary evidence of compliance by SPV1 with the obligations contained in this paragraph; 19

20 (m) Ranking of Priorities: procure and ensure that SPV1 s liabilities under the Security Documents rank and will rank in point of priority with all its other liabilities (both actual and contingent) except: (ii) (iii) (iv) (v) the RSLS-SPV2 (Class A) Securities; the RSLS-SPV2 (Class B) Securities; the Security Interests provided in the Intercreditors Agreement; liabilities which are subject to liens or rights of set off arising in the normal course of trading and the aggregate amount of which is in the opinion of the Trustee not material; and liabilities which are preferred solely by the laws of Malaysia and not by reason of any Security Interests (n) (o) (p) (q) Paying Debts: punctually pay all its respective indebtedness when due and owing; Performing Obligations: perform all SPV1 s respective covenants and obligations under these presents and the Issue Documents; Insolvency Event, Litigation and Claims: inform the Trustee of any Insolvency Event, legal proceedings, litigation, arbitration and/or such other claims (of a material adverse effect) existing, pending and/or threatened involving SPV1; Notification: immediately notify the Trustee in the event SPV1 becomes aware of: (ii) (iii) (iv) (v) the occurrence of an Event of Default with full details of any steps which it is taking, or is considering taking, in order to remedy or mitigate the effect of the Event of Default or otherwise in connection with it, or of any other right or remedy under the Issue Documents as may have become immediately enforceable; any circumstance that has occurred that would materially prejudice SPV1or any security included in or created under the Issue Documents (where applicable) or any event which may have a material adverse effect on SPV1; any substantial change in the nature of the business of SPV1; a change in the name of the guarantors (where applicable); any cessation of liability of guarantors (where applicable) for the payment of the whole or part of the monies for which they are or become liable under the relevant guarantees (if any); 20

21 (vi) (vii) (viii) any change in the withholding tax position or taxing jurisdiction of SPV1; any change in the utilisation of proceeds from the RSLS-SPV1 where the relevant prospectus, information memorandum or any agreement entered into in connection with the issuance of the RSLS-SPV1 sets out a specific purpose for which the proceeds are to be utilised; and/or any other matter that may materially prejudice the interests of the Loan Stockholders; (r) (s) (t) (u) (v) (w) Execution of Security Documents: execute any documents or agreements required by the Trustee within the period of time as may be specified by the Trustee only for the purpose of perfecting the Security Interests created under the Security Documents; Execution of Further Documents: so far as required by law, at all times, execute all such further documents and do all such further acts and things as may be necessary at any time to give further effect to the terms and conditions of these presents; Change of Auditors: in the case of SPV1, ensure that if it should change its auditors, such new auditors or firm of auditors to be recommended to its shareholders for appointment shall be acceptable to the Trustee; Preservation of securities: do all whatsoever acts, deeds or things which the Trustee may from time to time require or deem necessary for the preservation or protection of any securities now or hereafter held by the Trustee in respect of the RSLS-SPV1. Paying Agent: at all times maintain a paying agent for the RSLS-SPV1 in Malaysia; and Notification to Trustee: cause and procure the paying agent to notify the Trustee in the event the Paying Agent does not receive payment from SPV1 as required under the Trust Deed. Negative Covenants SPV1 covenants that, during the continuance of these presents, without the previous sanction of the Loan Stockholders by an Ordinary Resolution, it shall not: (a) Negative Pledge: create or permit to exist over all or any part of its business or assets any Security Interests (other than any Security Interests arising prior to the date hereof and any permitted hereunder that has already been disclosed to the Trustee); 21

22 (b) Indebtedness to others: incur, assume, guarantee or permit to exist any indebtedness, save for the advances from CHOY WAI CEONG (NRIC No: / ), a director of FFHB and except for:- (ii) indebtedness arising under the RSLS-SPV1; and indebtedness arising prior to the date of this Trust Deed; (c) (d) (e) (f) (g) (h) Disposal of Assets: save and except in relation to the Charged Properties, sell, transfer, lease or otherwise dispose of, or in any way cease to exercise control over, whether by a single transaction or a number of transactions, related or not, the whole or any part of its assets and undertakings other than in the ordinary course of business or trade or its controlling interest in its subsidiaries hereafter to be acquired; Change in Business: carry on any business other than its existing business or undertake or permit any merger, consolidation or reorganisation or make any alteration to the general nature of its business or change the nature of the present business of SPV1 or undertake or permit any merger, consolidation or reorganisation or make any alteration to the general nature of its business; Loans, Guarantees and Indemnity: make or permit to exist loans or lend or make advances to others or make investments in other companies or enterprises or guarantee or indemnify any person enterprise or company (other than normal trade credit or trade guarantees or temporary loans to staff, customers, contractors or suppliers); Loans To Related Parties: make any loans to its respective directors, shareholders, related or subsidiary companies or persons connected therewith (as defined in Section 122A of the Companies Act) or enter into any transaction with any such aforesaid persons whereby an indebtedness in their favour is incurred; Prepayment of other loans: make any prepayment of any other loans or indebtedness other than those provided for under this Agreement; Constitutional Documents: add to, delete, vary or amend the Memoranda and Articles of Association of SPV1 in any manner which would be inconsistent with the provisions of these presents or the Issue Documents, or change the respective financial years of SPV1; Share Capital: reduce, or in any way whatsoever alter except increase, their authorised issued or paid-up capital whether by varying the amount, structure or value thereof or the rights attached thereto or convert any of their share capital into stock, or by consolidating dividing or subdividing all or any of their shares; 22

23 (j) (k) (l) Declare Dividends: declare, make or pay any dividend, bonus issue or other distribution to its shareholders; Enter into partnership: save where any such agreement or arrangement is entered into solely in the best interest of SPV1, on ordinary commercial terms and on the basis of arm's length arrangements, enter into any partnership, profit-sharing or royalty agreement or other similar arrangement whereby its income or profits are, or might be, shared with any other person, firm or company or enter into any management contract or similar arrangement whereby its business or operations are managed by any other person, firm or company; Related-Party Transactions: enter into a transaction, whether directly or indirectly with interested persons (including a director, substantial shareholder or persons connected with them as defined in Section 122A of the Companies Act) unless: (ii) such transaction shall be on terms that are no less favourable to SPV1 than those which could have been obtained in a comparable transaction from persons who are not interested persons; and SPV1 obtains certification from an independent advisor that the transaction is carried out on fair and reasonable terms; PROVIDED THAT SPV1 certifies to the Trustee that the transaction complies with this sub-clause, that SPV1 has received the certification mentioned above (where applicable) and that the transaction has been approved by the Directors and/or their shareholders, as the case may be, pursuant to and in accordance with the relevant Articles of Association; and (m) Restriction on Transactions: subject to the provisions set out above, enter into any transaction with any person, firm or company, except in the ordinary course of business on ordinary commercial terms and on the basis of arm's length arrangements, or where applicable, establish any exclusive purchasing or sales agency or enter into any transaction whereby they might pay more than the ordinary commercial price (subject to trade discounts) for its products. 23