Private & Confidential Malaysia Airports Capital Berhad

Private & Confidential Malaysia Airports Capital Berhad Proposed ICP and IMTN issuance pursuant to an ICP Programme and an IMTN Programme respectively, with an aggregate combined limit of up to RM3.1 billion in nominal value (with a sublimit of RM1.0 billion in nominal value for the ICP Programme) ______________________________________________________________________________

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PRINCIPAL TERMS AND CONDITIONS 1. Background information on the Issuer (i) Name : Malaysia Airports Capital Berhad (the

“Issuer”)

(ii) Address : Malaysia Airports Corporate Office, Persiaran Korporat KLIA, 64000 KLIA, Sepang, Selangor Darul Ehsan

(iii) Business Registration No.

: 906593-U

(iv) Date / Place of Incorporation

: 2 July 2010 / Malaysia

(v) Date of Listing

: Not applicable

(vi) Status • Resident / Non-resident

Controlled Company • Bumiputera / Non-

Bumiputera-Controlled Company

: :

Resident-controlled company Government-controlled company

(vii) Principal Activities : To undertake the issuance of Ringgit-denominated Islamic commercial papers and Islamic medium term notes pursuant to an Islamic commercial papers programme and an Islamic medium term notes programme respectively (collectively, the “Sukuk Programmes”) in accordance with Shariah principles and in connection with Malaysia Airports Holdings Berhad (“MAHB”).

(viii) Board of Directors as at 12 July 2010

: Name

(a) Tan Sri Bashir Ahmad bin Abdul Majid

(b) Faizal Sham bin Abu Mansor

(ix) Structure of shareholdings and names of shareholders or, in the case of a public company, names of all substantial shareholders as at 12 July 2010

: The Issuer is a wholly-owned subsidiary of MAHB.


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(x) Authorised Capital as at 12 July 2010 Issued and Paid-up Capital as at 12 July 2010

: :

RM100,000.00 divided into 100,000 ordinary shares of RM1.00 each RM2.00 divided into 2 ordinary shares of RM1.00 each

2. Principal terms and conditions (a) Names of parties involved in the Proposal:

(i) Joint Principal

Advisers/Joint Lead Arrangers(“JLAs”)

: CIMB Investment Bank Berhad ("CIMB") and Citibank Berhad (“CITI”).

(ii) Arranger

: Not Applicable.

(iii) Valuer(s) : Not Applicable.

(iv) Solicitors : Adnan Sundra & Low acting for the JLAs and Raslan Loong acting for the Issuer.

(v) Financial Adviser : Not Applicable.

(vi) Technical Adviser : Not Applicable.

(vii) Guarantor : Not Applicable.

(viii) Trustee : CIMB Trustee Berhad.

(ix) Facility Agent : CIMB.

(x) Primary Subscriber(s) and Amount Subscribed (where applicable)

: In the event that the Sukuk (as defined below) are issued on a bought deal basis, the primary subscribers will be identified prior to such issuance.

(xi) Underwriter(s) and Amount Underwritten

: The Sukuk will not be underwritten.

(xii) Joint Shariah Advisers : CIMB (backed by CIMB Islamic Shariah Committee); and CITI (backed by Citibank Berhad Sharia Committee).

(xiii) Central Depository : Bank Negara Malaysia (“BNM”).

(xiv) Paying Agent : BNM.

(xv) Reporting Accountant : Ernst & Young.


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(xvi) Others (please specify) § Joint Lead Managers § Tender Panel

Members (“TPMs”)

: :

CIMB and CITI. Persons to whom an issue of, or an offer or invitation to subscribe the Sukuk are made would fall within Schedule 6 or Section 229(1)(b) of the Capital Markets and Services Act 2007 (“CMSA”) and Schedule 7 or Section 230(1)(b) of the CMSA and would fall within Schedule 9 or Section 257(3) of the CMSA.

(b) Islamic Principle Used : The Shariah principles of Ijarah and Murabahah utilising commodities (“Commodity Murabahah”). Where: (a) the current structure described herein is

amended so as to comply with any future requirements of the Ijarah or Commodity Murabahah principles; or

(b) the Sukuk are proposed to be issued

based on a Shariah principle or principles other than Ijarah or Commodity Murabahah; or

(c) the structure of the Sukuk

Programmes based on any Islamic principle (other than Ijarah or Commodity Murabahah) is amended so as to comply with the requirements of such Shariah principles,

the prior approval from the Securities Commission (“SC”), where applicable and the Joint Shariah Advisers will be sought. For the avoidance of doubt, no approval of the holders of the Sukuk (“Sukukholders”) shall be required.

(c) Facility Description : An Islamic Commercial Papers (“ICPs”) Programme (“ICP Programme”) and an Islamic Medium Term Notes (“IMTNs”) Programme (“IMTN Programme”). (Collectively, the ICPs and IMTNs shall be


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referred to as “Sukuk” and the ICP Programme and the IMTN Programme shall be referred to as the “Sukuk Programmes”). Ijarah MAHB and the Issuer (acting on behalf of the Sukukholders) shall from time to time execute asset purchase agreement(s), under which MAHB shall sell certain Shariah-compliant, leasable assets (the “Assets”), by way of transfer of beneficial ownership, to the Issuer for a mutually agreed asset purchase price, which shall at all times comply with the SC’s Shariah Advisory Council Pricing Guidelines. Pursuant to the trust deed and asset declaration of trust, the Issuer shall hold the Assets on trust for the Sukukholders. The Assets will be identified at or around the time of issuance of the Sukuk, to be endorsed by the Joint Shariah Advisers and to be notified to the SC accordingly. The Issuer shall declare a trust (“Trust”) over the Assets, the present and future rights and interest in the Ijarah agreement, the Purchase Undertaking (as described below) and the proceeds of the foregoing (collectively the “Trust Assets”) in favour of the Sukukholders. The Issuer shall issue Sukuk to the Sukukholders to evidence the Sukukholders’ proportionate undivided beneficial ownership and/or interest in the Trust Assets (entitling the Sukukholders to, amongst others, receive the Ijarah rentals and all other payments in relation to the Trust Assets). The proceeds from the Sukuk will be used by the Issuer to purchase the Assets from MAHB. The Issuer shall lease the Assets to MAHB under an Ijarah agreement for a specific lease term in return for periodic/ one-off Ijarah payments. There shall be purchase undertaking executed by MAHB for the benefit of the Issuer (acting on behalf of the Sukukholders).


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Under the terms of a service agency agreement, MAHB (in such capacity as the service agent) (“Service Agent”), on behalf of the Issuer, will be responsible for the performance of all maintenance in respect of the Assets, to cover/insure the Assets, to pay general ownership expenses including takaful contribution/ insurance premium (“General Ownership Expenses”) and to ensure that the Assets are kept in good repair in accordance with the terms set out in the service agency agreement. The Service Agent shall ensure that the takaful/insurance in respect of the Assets is for an appropriate covered/insured amount at all times taking into account that upon the occurrence of a Total Loss Event (as defined herein), the Sukuk may be required to be redeemed from the proceeds of such takaful/insurance. MAHB shall pay periodic/ one-off Ijarah rentals due under the Ijarah agreement to the Issuer. The Issuer shall make periodic/ one-off distributions to the Sukukholders equivalent to the periodic/ one-off Ijarah rentals received from MAHB. MAHB, as the Obligor, shall purchase the Assets by way of transfer of beneficial ownership at the Exercise Price (as defined below), pursuant to the Purchase Undertaking executed by MAHB for the benefit of the Issuer (acting on behalf of the Sukukholders): (a) upon the maturity date of the Sukuk

(“Scheduled Distribution Date”); or (b) upon declaration of a Dissolution

Event/Event of Default (as defined in item 2(x) below), or

(c) the declaration of a Mandatory

Redemption Event (as defined in item 2(z)(v) below).


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The Exercise Price shall be equal to the outstanding nominal amount of the Sukuk or the accreted nominal amount of the Sukuk (where applicable) plus all accrued but unpaid rental payments under the Ijarah agreement plus General Ownership Expenses. The General Ownership Expenses will be set-off with the amount due from the Issuer. Upon the occurrence of any of the above, the Sukuk held by the Sukukholders shall be cancelled. Pursuant to an undertaking (“Substitution Undertaking”) granted by the Issuer in favour of MAHB, MAHB shall have the right via an exchange agreement, to substitute all or part of the Assets throughout the tenure of the Sukuk with qualified assets that are approved by the Joint Shariah Advisers (“Substitute Assets”) upon certain events, including but not limited to in a Total Loss Event duly notified to the Trustee (on behalf of the Sukukholders) as provided herein. The Substitute Assets shall form part of the Assets and thereby form part of the Trust Assets. Upon substitution of the Assets, MAHB and the Issuer shall continue the lease with the Substitute Assets under the terms of the existing Ijarah agreement. All Ijarah rentals due and payable up to the date of occurrence of a Total Loss Event shall be payable by MAHB to the Issuer. In the event the Assets are not substituted on the occurrence of a Total Loss Event, the Trustee shall: (1) by written notice to the MAHB, declare

that the lease shall be terminated and that MAHB shall pay the Issuer all accrued but unpaid rental payments under the Ijarah agreement; and

(2) in accordance with the provisions of

the agency agreement, by written notice to the Issuer, declare that a Dissolution Event/Event of Default has occurred.


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In such event, the Sukuk will be redeemed using the proceeds of takaful/insurance. If the takaful/insurance proceeds are insufficient to cover the purchase consideration, the Service Agent shall irrevocably and unconditionally undertake to make good the difference, for not taking full takaful/insurance coverage on the Assets pursuant to the terms of the service agency agreement. Any excess from the takaful/insurance proceeds over the Sukuk amount shall be paid to the Service Agent as an incentive fee. “Total Loss Event” is the total loss or destruction of, or damage to the whole (and not part only) of the Assets or any event or occurrence that renders the whole (and not part only) of the Assets permanently unfit for any economic use and the repair or remedial work in respect thereof is wholly uneconomical. A diagrammatical illustration of the Ijarah transaction and the other terms and conditions are set out in Annexure I. Commodity Murabahah The Sukuk will be issued under the principle of Murabahah based on the Commodity Murabahah structure (the “Sukuk”). The Issuer will be appointed as agent (wakeel) of the Sukukholders to buy Shariah-compliant commodity* (the “Commodity”) (in such capacity, the “Purchase Agent”). MAHB will issue a purchase order (the “Purchase Order”) to the Purchase Agent (acting on behalf of Sukukholders). In the Purchase Order, MAHB will order the Commodity and irrevocably undertake to purchase (the “Undertaking to Purchase”) such Commodity from the Purchase Agent (acting on behalf of the Sukukholders) at a deferred sale price (the “Sale Price”). Based on the Purchase Order, the Purchase Agent, on behalf of the Sukukholders, shall purchase, on a spot basis, the Commodity from commodity vendor(s) in the Bursa Suq Al-Sila commodity market (through a Commodity Trading


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Participant (the “CTP”)) at the purchase price of the Commodity (the “Purchase Price”) which shall be an amount equivalent to the Sukuk proceeds. The Issuer shall then issue the Sukuk to evidence the Sukukholders’ ownership of the Commodity and the rights of the Sukukholders via the Issuer (acting in its capacity as the Purchase Agent) under the contract for the purchase of the Commodity from the CTP and, upon onward sale of the Commodity to MAHB, the Sale Price and the rights of the Sukukholders via the Issuer (acting in its capacity as the Purchase Agent) under the contract for the sale of the Commodity to MAHB (the “Murabahah Sale Agreement”). The proceeds received from the Sukukholders shall be used by the Issuer to pay the Purchase Price. Pursuant to the Undertaking to Purchase, MAHB shall buy the Commodity from the Purchase Agent at a Sale Price (which shall be the Purchase Price plus a profit margin) payable on an installment payment basis. MAHB shall then sell the Commodity to commodity buyer(s) in the Bursa Suq Al-Sila commodity market (through the CTP) on a spot basis for an amount equal to the Purchase Price. At maturity, Event of Default/Dissolution Event or Mandatory Redemption Event, MAHB (as part of its obligation to pay the Sale Price) will pay the Purchase Agent (who in turn will pay the Sukukholders) all amounts then outstanding on the Sale Price as final settlement of the same (subject to the Redemption Rebate where applicable) upon which the Sukuk will be cancelled. As the Sale Price/ Selling Price is calculated based on the Purchase Price and profit margin up to the maturity date, a rebate will be granted if the Sukuk is redeemed before maturity upon the declaration of an Event of Default/Dissolution Event or Mandatory Redemption Event. The Redemption Rebate shall be the difference between profit margin under the Sale Price calculated based on the yield to maturity up to maturity and the profit margin calculated based on the yield to maturity up to the declaration of an Event of Default/Dissolution Date or Mandatory Redemption Event. The Sale Price payable by MAHB on the declaration of an Event of Default/Dissolution


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Event or Mandatory Redemption Event is an amount as determined by the Facility Agent, which shall be calculated in accordance with the formula below: Sale Price payable = Sale Price at issue date less the aggregate of Profit Payments paid (if any) less the Redemption Rebate. *Note: Shariah-compliant commodity would exclude ribawi items in the category of medium of exchange such as currency, gold and silver. A diagrammatical illustration of the Commodity Murabahah transaction and the other terms and conditions are set out in Annexure 2.

(d) Issue Size : The aggregate outstanding nominal value of the Sukuk issued under the Sukuk Programmes at any point in time shall not exceed RM3.1 billion (with a sublimit of RM1.0 billion in aggregate nominal value for the ICP Programme).

(e) Issue Price : ICPs The ICPs shall be issued at a discount to face value and the price payable for each ICP shall be calculated in accordance with the formula as set out in the Rules on Fully Automated System for Issuing/Tendering ("FAST") issued by BNM, as amended or substituted from time to time (“FAST Rules”). IMTNs The IMTNs shall be issued at par, at a premium or at a discount to face value and the price payable for each IMTNs shall be calculated in accordance with the FAST Rules.

(f) Tenor of the Facility/Issue : ICP Programme The tenor of the ICP Programme is seven (7) years from the date of the first issue under the ICP Programme, provided that the first issue of ICPs under the ICP Programme shall not be later than two (2) years from the date


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of the SC approval. The tenor of each issuance of the ICP may be one (1), two (2), three (3), six (6), nine (9) or twelve (12) months as the Issuer may select, provided that the ICPs mature prior to the expiry of the ICP Programme. IMTN Programme The tenor of the IMTN Programme is fifteen (15) years from the date of the first issue under the IMTN Programme, provided that the first issue of IMTNs under the IMTN Programme shall not be later than two (2) years from the date of the SC’s approval. The tenor of each issuance of the IMTN may be more than one (1) year and up to fifteen (15) years as the Issuer may select, provided that the IMTNs mature prior to the expiry of the IMTN Programme.

(g) Coupon/Profit or Equivalent Rate (%) (please specify)

: Periodic Distribution Rate The periodic distribution rate of the ICPs/IMTNs shall be determined on the issue date of the respective issue.

(h) Coupon/Profit Payment Frequency and Basis

: The frequency of the periodic distribution payments for the IMTNs (if any) shall be on a semi-annual basis or such period to be determined prior to each issuance. The periodic distribution rate (if applicable) shall be calculated based on the actual number of days elapsed and 365 days basis (actual/365).

(i) Yield to Maturity (%) : The yield to maturity of the Sukuk shall be determined at the point of each issuance.

(j) Security/Collateral (if any) : Nil.

(k) Details on Utilisation of Proceeds

: Issuer The proceeds from the Sukuk Programmes issued under the Ijarah principle shall be utilised by the Issuer to purchase the Assets from MAHB under the relevant asset purchase agreement.


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The proceeds from the Sukuk Programmes issued under the Commodity Murabahah principle shall be utilised by the Issuer to pay the Purchase Price for the Commodity (as defined below). MAHB Ijarah Sukuk The proceeds from the sale of the Assets shall be utilised by MAHB to part finance the construction of the new Low Cost Carrier Terminal (“KLIA 2”) and/or to refinance MAHB’s borrowings/financing which were utilised for Shariah-compliant purposes and/or for MAHB’s Shariah-compliant general corporate purposes. Commodity Murabahah Sukuk The proceeds from the sale of the Commodity shall be utilised by MAHB to part finance the construction of the KLIA 2 and/or to refinance MAHB’s borrowings/financing which were utilised for Shariah-compliant purposes and/or for MAHB’s Shariah-compliant general corporate purposes.

(l) Sinking Fund (if any) : None.

(m) Rating • Credit Rating Assigned • Name of Rating Agency

: :

The indicative ratings for the ICPs and IMTNs are P1 and AAA, respectively. RAM Rating Services Berhad (“RAM”).

(n) Form and Denomination : The Sukuk shall be issued in accordance with (1) the “Rules on the Scripless Securities” under the Real Time Electronic Transfer of Funds and Securities (“RENTAS”) system issued by BNM (“RENTAS Rules”) and (2) the FAST Rules (collectively, the “Codes of Conduct”) applicable from time to time. Each tranche of the Sukuk shall be represented by a global certificate to be deposited with BNM, and shall be exchanged for definitive bearer form only in certain


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limited circumstances. The denomination of the Sukuk shall be RM1,000 or in multiples of RM1,000 at the time of issuance.

(o) Mode of Issue : ICPs The ICPs may be issued via bought deal or via book-building or via a competitive tender on FAST or via direct placement on a best effort basis. The Joint Lead Managers shall invite a selection of financial institutions and investors to participate as TPMs to bid for the ICPs. The composition of the tender panel may be varied from time to time by the Joint Lead Managers in consultation with the Issuer. Allocation of the ICPs to the bidders shall be based on ascending order of yield or descending order of price, as the case may be. The Issuer shall have the right to reject any or all bids or accept additional bids received from a TPM without assigning any reasons thereof. Alternatively, the ICPs may be directly placed via the Joint Lead Managers to selected investors at a yield to be agreed between the Issuer and the investors on a best effort basis. The ICPs may also be placed out via book-building on a best effort basis. Such direct placement or book-building shall be subject to terms and conditions to be agreed between the Issuer and the Joint Lead Managers. The ICPs may also be issued on a bought deal basis based on terms and conditions to be mutually agreed upon between the Issuer and the primary subscriber(s). IMTNs The IMTNs may be issued via bought deal or via book-building or via direct placement on a best effort basis. The IMTNs may be directly placed via the Joint Lead Managers to selected investors at a yield to be agreed between the Issuer and


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the investors on a best effort basis. The IMTNs may also be placed out via book-building on a best effort basis. Such direct placement or book-building shall be subject to terms and conditions to be agreed between the Issuer and the Joint Lead Managers. The IMTNs may be issued on a bought deal basis based on terms and conditions to be mutually agreed upon between the Issuer and the primary subscriber(s). The issuance of the Sukuk under the Sukuk Programmes shall be in accordance with the FAST Rules, subject to such exemptions (if any) granted from time to time.

(p) Selling Restrictions : At Issuance The Sukuk may only be offered, sold, transferred or otherwise disposed directly or indirectly to a person to whom an offer or invitation to subscribe the Sukuk and to whom the Sukuk are issued would fall within Schedule 6 or Section 229(1)(b) and Schedule 7 or Section 230(1)(b) of the CMSA and would fall within Schedule 9 or Section 257(3) of the CMSA. Thereafter The Sukuk may only be offered, sold, transferred or otherwise disposed directly or indirectly to a person to whom an offer or invitation to purchase the Sukuk would fall within Schedule 6 or Section 229(1)(b) of the CMSA and would fall within Schedule 9 and Section 257(3) of the CMSA.

(q) Listing Status : The ICPs will not be listed. The IMTNs may be listed on Bursa Malaysia Securities Berhad (Exempt Regime) or any other stock exchange.

(r) Minimum Level of Subscription (RM or %)

: The minimum level of subscription for each issue that is not issued on a bought deal or direct placement basis (which shall be fully subscribed) under the Sukuk Programmes shall be 5% of the size of a particular issue.


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(s) Other Regulatory Approvals Required in relation to the Issue, Offer or Invitation and Whether or not Obtained (please specify)

: None.

(t) Identified Assets : Ijarah The Assets will be determined at or around the time of issuance of the Sukuk, and will be endorsed by the Joint Shariah Advisers and notified to the SC accordingly. Commodity Murabahah Shariah-compliant commodities (excluding ribawi items in the category of medium of exchange such as currency, gold and silver) which will be endorsed by the Joint Shariah Advisers and notified to the SC accordingly.

(u) Purchase and Selling Price/Rental (where applicable)

: Purchase Price To be determined at the point of issuance, if applicable and shall at all times comply with the SC’s Shariah Advisory Council Pricing Guidelines. Iiarah Rental To be determined at the point of issuance. Commodity Murabahah Sale Price To be determined at the point of issuance.

(v) Conditions Precedent : To include but not limited to the following (all have to be in form and substance acceptable to the Joint Lead Managers):

A. Main Documentation 1) The transaction documents have been

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

B. Issuer & MAHB

1) Certified true copies of the Certificate of


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Incorporation and the Memorandum and Articles of Association of the Issuer and MAHB, respectively.

2) Certified true copies of the latest Forms

24 and 49 of the Issuer and MAHB, respectively.

3) A certified true copy of board

resolutions of the Issuer and MAHB, respectively authorising, among others, the execution of the transaction documents.

4) A list of each of the Issuer’s and

MAHB’s authorised signatories and their respective specimen signatures.

5) A report of the relevant company

search of the Issuer and MAHB, respectively conducted at the Companies Commission of Malaysia.

6) A report of the relevant winding up

search on the Issuer and MAHB, respectively conducted at the Department of Insolvency of Malaysia.

C. General

1) The approval from the SC.

2) The Sukuk have received their respective requisite ratings as stated in this term sheet.

3) Evidence that all transaction fees,

costs and expenses have been or will be paid in full.

4) The Joint Lead Managers have

received from their legal counsel a favourable legal opinion addressed to the Joint Lead Managers and the Trustee advising with respect to, among others, the legality, validity and enforceability of the transaction documents and a confirmation addressed to the Joint Lead Managers that all the conditions precedent have been fulfilled.


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5) Evidence that the structure and transaction documents have received the approval from the Joint Shariah Advisers.

6) Such other conditions precedent as

advised by the legal counsel of the Joint Lead Managers and agreed between the Issuer, MAHB and the Joint Lead Managers.

(w) Representations and

Warranties : To include but not limited to the following:

(i) each of the Issuer and MAHB is a

company with limited liability duly incorporated and validly existing under the laws of Malaysia, has full power to carry on its business and to own its property and assets, and to enter into, exercise its rights under and perform its obligations under the transaction documents, and has full beneficial ownership of all its assets;

(ii) the memorandum and articles of

association of each of the Issuer and MAHB 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 and MAHB 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


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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, judgment, order, rule, regulation, licence, permit or consent by which the Issuer or MAHB or any of its assets is bound or which is applicable to the Issuer or MAHB or any of its assets;

(b) cause any limitation on the

Issuer or MAHB 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, judgment 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 or MAHB’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 and MAHB (to which each is a party) enforceable in accordance with its terms;

(v) the Sukuk have been duly authorised

and when issued and delivered and authenticated as provided in the transaction documents and paid for, will be duly and validly issued and delivered and will constitute legal, valid and binding obligations of the Issuer in


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accordance with their terms and the payment obligation of MAHB under the transaction documents (including the Ijarah agreement) will rank pari passu as to priority of payment with all other unsecured and unsubordinated indebtedness for borrowed money incurred by MAHB subject to laws affecting creditors’ rights generally;

(vi) all consents, authorisations or

approvals of, or filings with, any governmental authority required in connection with the issue or sale by the Issuer of the Sukuk or the performance of the Issuer’s obligations thereunder or under the transaction documents have been duly obtained and are in full force and effect;

(vii) as of the date of issue thereof, the

information contained in the information memorandum (“Information Memorandum”) is, after having made all reasonable enquiries, true and accurate in all material respects and is not misleading and the Information Memorandum does not contain any untrue statements of a material fact with regard to the Issuer or MAHB or the Sukuk and does not omit to state any material fact necessary to make the statements therein (with regard to the Issuer, MAHB and the Sukuk) not misleading;

(viii) save as disclosed in the Information

Memorandum, since the end of the most recent financial period of the Issuer and MAHB for which each of the Issuer and MAHB has issued its audited accounts, there has not occurred and there is no litigation or governmental proceeding pending, or to the best of the Issuer’s or MAHB’s knowledge threatened, against or affecting the Issuer or MAHB (or any of each of its properties) which would have a Material Adverse Effect (as defined in item 2(x) below) on the Issuer or MAHB;


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(ix) each of the latest audited financial

statements of the Issuer and MAHB have been prepared in accordance with the approved accounting standards in Malaysia, which have been consistently applied and (in conjunction with the notes to such statements) present a true and fair view of the state of affairs of the Issuer and MAHB for the financial year ended on such date; and

(x) such other representations and

warranties as agreed between the Issuer, MAHB and the Joint Lead Managers.

(x) Events of Default/ Dissolution

Event : To include but not limited to the following:

(i) the Issuer or MAHB 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) any representation or warranty made

or given by the Issuer or MAHB under the transaction documents or which is contained in any certificate, document or statement furnished at any time pursuant to the terms of the Sukuk and/or any of the transaction documents proves to have been incorrect or misleading in any material respect on or as of the date made or given or deemed made or given, and in the case of a failure which in the reasonable opinion of the Trustee is capable of being remedied, the Issuer or MAHB does not remedy the failure within a period of fourteen (14) days after the Issuer or MAHB became aware or having been notified by the Trustee of the failure;

(iii) the Issuer or MAHB fails to observe or

perform 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


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paragraph (i) above, and in the case of a failure which in the reasonable opinion of the Trustee is capable of being remedied, the Issuer or MAHB does not remedy the failure within a period of thirty (30) days after the Issuer or MAHB became aware or having been notified by the Trustee of the failure;

(iv) there has been a breach by the Issuer

or MAHB of any obligation under any of the Issuer’s or MAHB’s existing contractual obligations which may materially and adversely affect the Issuer’s or MAHB’s ability to perform its obligations under the transaction documents and, if in the reasonable opinion of the Trustee is capable of being remedied, the Issuer or MAHB does not remedy the breach within a period of thirty (30) days after the Issuer or MAHB became aware or having been notified by the Trustee of the breach;

(v) 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 (30) 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;

(vi) any indebtedness for borrowed

moneys of MAHB in the aggregate outstanding principal amount of


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RM170.0 million (or its equivalent in any other currency or currencies) or more becomes due or payable or capable of being declared due or payable prior to its stated maturity or any guarantee or similar obligations of MAHB 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 MAHB in a court of competent jurisdiction within thirty (30) days from the date of such declaration or call, or MAHB 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, administrator or liquidator is appointed in respect of the whole or substantial part of the business or assets of the Issuer or MAHB, or distress, legal process, sequestration or any form of execution is levied or enforced or sued in respect of the whole or substantial part of the business or assets of the Issuer or MAHB and is not discharged within thirty (30) days after being levied, enforced or sued out, or any security interest which may for the time being affect any of its assets becomes enforceable;

For the purpose of this paragraph (vii), references to “substantial” shall mean such value equivalent to or more than RM170.0 million (or its equivalent in any other currency or currencies) in any financial year;

(viii) the Issuer or MAHB fails to satisfy any

judgment passed against it by any court of competent jurisdiction and no appeal against such judgment or no


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application for a stay of execution has been made to any appropriate appellate court within the time prescribed by law or such appeal or application for a stay of execution has been dismissed;

(ix) any step is taken for the winding up,

dissolution or liquidation of the Issuer or MAHB or a resolution is passed for the winding up of the Issuer or MAHB or a petition for winding up is presented against the Issuer or MAHB and the Issuer or MAHB has not taken any action in good faith to set aside such petition within thirty (30) days from the date of service of such winding up petition or a winding up order has been made against the Issuer or MAHB;

(x) the Issuer or MAHB convenes a

meeting of its creditors or proposes or makes any arrangement including any scheme of arrangement or composition or begins negotiations with its creditors, or takes any proceedings or other steps, with a view to a general rescheduling or deferral of its indebtedness or a moratorium is agreed or declared by a court of competent jurisdiction in respect of or affecting all or any part of its indebtedness or any assignment for the benefit of its creditors (other than for the purposes of and followed by a reconstruction previously approved in writing by the Trustee, unless during or following such reconstruction the Issuer or MAHB 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 or MAHB;

(xi) where there is a revocation,

withholding or modification of any license, authorisation, approval or consent which in the reasonable opinion of the Trustee may materially


23

and adversely impair or prejudice the ability of the Issuer or MAHB to comply with the terms and conditions of the Sukuk or the transaction documents;

(xii) the Issuer or MAHB is deemed

(pursuant to Section 218 of the Companies Act 1965) unable to pay its debts or becomes unable to pay its debts as and when they fall due or suspend or threaten to suspend making payments with respect to all or any class of its debts;

(xiii) the Issuer or MAHB ceases or

threatens to cease to carry on all or a substantial part of its business (otherwise for purposes of or pursuant to an amalgamation or reorganisation or restructuring whilst solvent);

(xiv) at any time any of the material

provisions of the transaction documents is or becomes illegal, void, voidable or unenforceable;

(xv) the Issuer or MAHB 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;

(xvi) any of the assets, undertakings, rights

or revenue of the Issuer or MAHB are seized, nationalised, expropriated or compulsorily acquired by or under the authority of any governmental body which in the reasonable opinion of the Trustee may have a Material Adverse Effect provided that where the assets in question are shares held by MAHB in its Foreign Affiliate (as defined below), such seizure, nationalisation, expropriation or compulsory acquisition shall be only construed as having a Material Adverse Effect in the event that such Foreign Affiliate is a Material Foreign Affiliate (as defined below).


24

“Foreign Affiliate” means any company or corporate entity incorporated outside of Malaysia in which MAHB holds shares of any amount.

“Material Foreign Affiliate” means a Foreign Affiliate:

(a) whose total profits after tax or

consolidated total profits after tax (in the case of a Foreign Affiliate which has subsidiaries) as shown by its latest available audited financial statements or latest available audited consolidated financial statements (where applicable), corresponding to the latest available audited consolidated financial statements of MAHB, and after taking into account MAHB’s percentage of shareholding in such Foreign Affiliate, is at least five percent (5%) of the consolidated total profits after tax of MAHB and its group of companies (“Group”); or

(b) whose total net assets or

consolidated total net assets (in the case of a Foreign Affiliate which has subsidiaries) as shown by its latest available audited financial statements or latest available audited consolidated financial statements (where applicable), corresponding to the latest available audited consolidated financial statements of MAHB, and after taking into account MAHB’s percentage of shareholding in such Foreign Affiliate, is at least five percent (5%) of the consolidated total net assets of the Group. For clarity, total net assets refer to total assets less


25

total liabilities.

For the avoidance of doubt, the above thresholds shall apply individually to each Foreign Affiliate;

(xvii) MAHB’s operating agreement dated

12 February 2009 (as amended) with the Government of Malaysia (“GOM”) and Malaysia Airports (Sepang) Sdn Bhd (“MASSB”) in connection with the management, operation and maintenance of the Kuala Lumpur International Airport and other related services (“Operating Agreement for KLIA”) is terminated without being replaced with a substantially similar or equivalent arrangement allowing MAHB to continue the management, operation and maintenance of the Kuala Lumpur International Airport (which replacement arrangement does not, in the Trustee’s reasonable opinion, depart from the Operating Agreement for KLIA in any way which would have a Material Adverse Effect);

(xviii) MAHB’s operating agreement dated

12 February 2009 (as amended) with GOM and Malaysia Airports Sdn Bhd in connection with the management, operation, and maintenance of all the other airports within Malaysia as identified therein (“Operating Agreement for Designated Airports”) is terminated without being replaced with a substantially similar or equivalent arrangement allowing MAHB to continue the management, operation and maintenance of all the other airports within Malaysia (which replacement arrangement does not, in the Trustee’s reasonable opinion, depart from the Operating Agreement for Designated Airports in any way which would have a Material Adverse Effect);

(xix) any event or events has or have

occurred or a situation exists which in


26

the reasonable opinion of the Trustee may have a Material Adverse Effect on the Issuer or MAHB, and in the case of the occurrence of such event or situation which in the reasonable opinion of the Trustee is capable of being remedied:

(a) in the case of a breach under

the Operating Agreement for KLIA or the Operating Agreement for Designated Airports, MAHB does not remedy it within the period provided by the GOM in its default notice for remedying such default or such other extended period as may be determined by the GOM; or

(b) save for in the situation

described under (a) above, the Issuer or MAHB does not remedy it within a period of thirty (30) days after the Issuer or MAHB became aware or having been notified by the Trustee of the event or situation;

(xx) the occurrence of a Total Loss Event

and MAHB fails to substitute the Assets with such Substitute Assets pursuant to the terms of the Substitution Undertaking; and

(xxi) such other event or events as agreed

between the Issuer, MAHB and the Joint Lead Managers.

“Material Adverse Effect” means: 1. any material adverse effect on the

business or financial condition of the Issuer or MAHB; or

2. the occurrence of an event which may

materially and adversely affect the ability of the Issuer or MAHB to perform any of its obligations under any of the transaction documents.


27

Upon the occurrence of an Event of Default, the Trustee may at its discretion or shall, if directed to do so by a Special Resolution, declare that an Event of Default has occurred and that all the outstanding Sukuk are immediately due and (i) in respect of Sukuk issued under the Ijarah principle, all accrued but unpaid rental payments under the Ijarah agreement and the Exercise Price pursuant to the Purchase Undertaking is payable by MAHB, and (ii) in respect of Sukuk issued under the Commodity Murabahah principle, all accrued but unpaid Sale Price under the Murabahah Sale Agreement is payable by MAHB, subject to the Redemption Rebate.

(y) Principal Terms and Conditions for warrants (where applicable)

: Not applicable.

(z) Other Principal Terms and Conditions for the Issue

:

(i) Information Covenants : To include but not limited to the following: (a) each of the Issuer and MAHB 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 Sukuk and that there does not exist or had not existed, from the date the Sukuk were issued, any Event of Default/Dissolution Event, and if such is not the case, to specify the same;

(b) each of the Issuer and MAHB shall

deliver to the Trustee the following:

(i) 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 audited consolidated financial statements for that year which shall contain the consolidated


28

income statements and consolidated balance sheets of the Issuer and the Group and which are audited by a firm of independent certified public accountants acceptable to the Trustee;

(ii) as soon as they become

available (and in any event within ninety (90) days after the end of the first half of its financial year) copies of its unaudited half yearly consolidated financial statements for that period (as announced quarterly to Bursa Malaysia Securities Berhad) which shall contain the consolidated income statements and consolidated balance sheets of the Group which are duly certified by any one of its directors;

(iii) promptly, such additional

financial or other information relating to the Issuer’s and MAHB’s business and its operations as the Trustee may from time to time reasonably request; and

(iv) promptly, all notices or other

documents received by the Issuer or MAHB from any of its shareholders or its creditors which contents may materially and adversely affect the interests of the Sukukholders, and a copy of all documents dispatched by the Issuer or MAHB to its shareholders (or any class of them) in their capacity as shareholders or its creditors generally at the same time as these documents are dispatched to these shareholders or creditors;

(c) MAHB shall promptly notify the


29

Trustee of any change in its board of directors and/or substantial shareholders;

(d) each of the Issuer and MAHB 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 or MAHB before any court or tribunal or administrative agency which may materially and adversely affect the ability of the Issuer or MAHB to perform any of its obligations under any of the transaction documents;

(e) each of the Issuer and MAHB 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

(f) such other information covenants as

agreed between the Issuer, MAHB and the Joint Lead Managers.

(ii) Positive Covenants : To include but not limited to the following:

(a) each of the Issuer and MAHB 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


30

(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 and MAHB to enter into or perform its obligations under the transaction documents or to ensure the validity, enforceability, admissibility in evidence of the obligations of the Issuer and MAHB or the priority or rights of the financiers under the transaction documents and the Issuer and MAHB shall comply with the same;

(b) each of the Issuer and MAHB 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;

(c) each of the Issuer and MAHB 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;

(d) each of the Issuer and MAHB shall

promptly perform and carry out all its obligations under all the transaction documents (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 Trustee in the event that it is unable to fulfil or comply with any of the provisions of the transaction documents;


keep proper books and accounts at all times and prepare its financial statements on a basis consistently applied in accordance with approved accounting standards in Malaysia and those financial statements shall give a true and fair view of the results of the operations of the Issuer and MAHB for


31

the period to which the financial statements are made;

(f) MAHB shall promptly provide to the

Trustee, such information relating to MAHB’s business, affairs and financial condition as may from time to time be reasonably required by the Trustee in order to discharge its duties and obligations as the Trustee under the transaction documents, to the extent permitted by law and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and to comply with all applicable laws including the provisions of the CMSA and/or the Sukuk, circulars, conditions or guidelines issued by SC from time to time;

(g) each of the Issuer and MAHB shall

ensure that the Issuer’s and MAHB’s obligations under the transaction documents shall at all times rank at least pari passu with all its other present and future unsecured and unsubordinated obligations, other than those preferred by law;

(h) the Issuer shall maintain a paying

agent in Malaysia in respect of payments in relation to the Sukuk in accordance with the relevant laws and regulations and to procure the paying agent to notify the Trustee in the event that the paying agent does not receive payment from the Issuer on the maturity dates of the Sukuk;

(i) MAHB shall obtain and maintain

takaful/insurance over its insurable assets in such amounts and against such risks as (i) are required by law; or (ii) are in the commercially reasonable business judgment (made in good faith) of MAHB, necessary or desirable;

(j) such other positive covenants as



32

(iii) Negative Covenants : To include but not limited to the following:

(a) each of the Issuer and MAHB shall

not (without the prior written consent of the Sukukholders and subject always to the provisions of the transaction documents) 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 (i) liens or security interest created by the operation of law and those arising in the ordinary course of their respective business over any of its undertaking, property, assets, revenues or rights; (ii) security interests created over the shares held by MAHB in any of its Foreign Affiliates other than Material Foreign Affiliates; and (iii) security interests created over the shares held by MAHB in any of its Material Foreign Affiliates where the book value of shares secured via such security interest is less than five percent (5%) of MAHB’s consolidated total assets, as stated in its most recent annual audited consolidated financial statements;

(b) save for (i) any sale or disposal which

is made solely as a means of facilitating an Islamic financing exercise; (ii) any sale or disposal of shares held by MAHB in its Foreign Affiliate (save where such Foreign Affiliate is a Material Foreign Affiliate); and/or (iii) any sale or disposal of shares held by MAHB to its wholly-owned subsidiary, MAHB shall not sell or dispose any assets equal to or in excess of five percent (5%) of MAHB’s consolidated total assets, as stated in


33

its most recent annual audited consolidated financial statements in aggregate amount in any financial year. For the avoidance of doubt, the value of the assets to be sold and/or disposed hereunder shall be based on its book value as set out in the latest available annual audited consolidated financial statements of MAHB;

(c) each of the Issuer and MAHB shall

not add, delete, amend or substitute its Memorandum or Articles of Association in a manner inconsistent with the provisions of the transaction documents, unless required by law or any applicable regulation;

(d) MAHB shall not amend or agree to

any amendments to the Operating Agreement for KLIA or the Operating Agreement for Designated Airports which in the reasonable opinion of the Trustee may have a Material Adverse Effect on MAHB;


not obtain or permit to exist any loans or advances from its shareholders or directors unless these loans and advances are subordinated to the Sukuk;

(f) the Issuer shall not declare or pay any

dividends to its shareholders; (g) MAHB shall not declare or pay any

dividends to its shareholders if:

(i) 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

(ii) the Financial Covenant is

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


34

(h) the Issuer and MAHB, respectively

shall not enter into any agreement or transactions, whether directly or indirectly with its directors, substantial shareholders or persons connected with them unless such agreement or transaction is entered into:

(i) on terms that are not less

favourable to the Issuer and/or MAHB than those which could have been obtained in a comparable transaction from persons who are not interested persons; and

(ii) with respect to transactions

involving an aggregate payment or value equal to or greater than five percent (5%) of MAHB’s consolidated total assets as stated in its most recent annual audited consolidated financial statements, the Issuer and/or MAHB obtains certification from an independent adviser that the transaction is carried out on fair and reasonable terms;

PROVIDED that (a) in the case of (i) above, the Issuer and/or MAHB certifies to the Trustee that the transaction complies with paragraph (i); (b) in the case of (ii) above, the Issuer and/or MAHB has received the certification referred to in paragraph (ii) (where applicable); and (c) in the case of (i) or (ii) above, the transaction has been approved by the majority of the board of directors or shareholders in a general meeting as the case may require;

(i) the Issuer and MAHB, respectively

shall not enter into any agreement or transactions, whether directly or indirectly, with its subsidiaries or associated companies, unless such


35

agreement is entered into:

(a) in the ordinary course of business;

(b) on an arms-length basis; and

(c) will not will have a Material

Adverse Effect on each of them;

(j) the Issuer shall not use the proceeds

of the Sukuk except for the purposes set out in item 2(k) above;

(k) the Issuer shall not lend any money or

grant any advances or loans. MAHB shall not lend any money to any party other than to (a) MAHB’s directors, officers or employees as part of their terms of employment; and (b) MAHB’s subsidiaries and/or associated companies in its ordinary course of business; and

(l) such other negative covenants as


(iv) Financial Covenants : To include but not limited to the following:

Debt to Equity (“D:E”) Ratio MAHB shall maintain the D:E Ratio not exceeding 1.25 times throughout the tenure of the Sukuk Programmes. The D:E Ratio is the ratio of the indebtedness of the Group represented by: (a) the aggregate face value of all

outstanding ICPs, and all outstanding principal amount payable under the IMTNs; and

(b) all other indebtedness of MAHB for

borrowed monies (be it actual or contingent) for principal only, hire purchase obligations, finance lease obligations, fair value of financial derivatives in connection with


36

borrowed monies recognised by MAHB in its audited consolidated financial statements and other contingent liabilities of MAHB calculated in accordance with the applicable accounting standards; but excluding any inter-company loans which are subordinated to the Sukuk,

to the equity of the Group including, if any, preference equity, subordinated shareholders’ advances/loans and retained earnings/losses less goodwill (if any). The D:E Ratio shall be calculated on a yearly and half yearly basis and as and when such calculations are required to be made under the terms of the transaction documents during the tenor of the Sukuk Programmes. In the case of D:E Ratio calculated on a yearly basis, such calculations shall be based on the latest audited consolidated financial statements of MAHB and in the case of D:E Ratio calculated at any other times, the calculations shall be based on the latest consolidated management accounts of MAHB. The calculations of the D:E Ratio shall be duly confirmed by: (a) in the case of D:E Ratio calculated

based on audited consolidated financial statements, MAHB’s external auditors;

(b) in the case of D:E Ratio calculated

based on consolidated management accounts, by the authorised officers of MAHB.

MAHB shall arrange for the external auditors or MAHB’s authorized officer’s confirmation (as the case may be) 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.

(v) Mandatory Redemption Events

: “Mandatory Redemption Event” means the occurrence at any time where the GOM, through the Minister of Finance (Incorporated) of Malaysia or other entities owned or controlled by the GOM (“Special


37

Shareholder”), ceasing to hold (through redemption, transfer or otherwise) the special rights redeemable preference share issued by MAHB to the Special Shareholder on June 28, 1999 (or any replacement preferred security with substantially similar terms). If any of the above occurs, the Trustee may at its discretion or shall, if so directed by a Special Resolution, declare (by giving a written notice to the Issuer) that, (i) in respect of Sukuk issued under the Ijarah principle, the Obligor shall be obliged to immediately purchase the Assets at the Exercise Price pursuant to the Purchase Undertaking and (ii) in respect of Sukuk issued under the Commodity Murabahah principle, the Obligor shall be obliged to settle immediately all accrued but unpaid Sale Price under the Murabahah Sale Agreement, subject to the Redemption Rebate.

(vi) Tender and Issue : The Sukuk may be issued in multiples of RM1,000,000 but subject to the FAST Rules and other standard conditions including, without limitation, the following: (i) a minimum issue size of RM1,000,000

for each issue; and (ii) the issue notice shall be given to the

Facility Agent at least eight (8) business days (for the first issue) and at least six (6) business days (for subsequent issues) prior to and excluding the date of proposed issue; and

(iii) the Sukuk have received the

respective requisite ratings as stated in this termsheet; and

(iv) any amount redeemed may be re-

issued.

(vii) Transferability : Transferable but subject to the Selling Restrictions.

(viii) Redemption : Unless previously redeemed or purchased and cancelled, the Sukuk will be redeemed by the Issuer at 100% of their nominal value


38

on their respective maturity dates.

(ix) Repurchase and Cancellation

: The Issuer, MAHB or any of their related corporations may at any time purchase the Sukuk at any price in the open market or by private treaty, but these repurchased Sukuk shall not be counted for the purposes of voting and the Sukuk repurchased by the Issuer and/or MAHB shall be cancelled and cannot be reissued.

(x) Status : The Sukuk shall constitute direct, unconditional and unsecured obligations of the Issuer and shall at all times rank pari passu, without discrimination, preference or priority amongst themselves and at least pari passu with all other present and future unsecured and unsubordinated obligations of the Issuer, subject to those preferred by law. The obligations of MAHB under the Sukuk pursuant to the Purchase Undertaking in the case of Ijarah and the Murabahah Sale Agreement in respect of the Commodity Murabahah shall constitute direct, unconditional and unsecured obligations of MAHB 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 MAHB, subject to those preferred by law.

(xi) Availability : Upon completion of documentation and, unless waived by the Joint Lead Managers, compliance of all conditions precedent and other applicable conditions to the satisfaction of the Joint Lead Managers.

(xii) Taxation: : All payments under the Sukuk 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


39

withholding or deductions are made.

(xiii) Governing Laws : Laws of Malaysia.

(xiv) Jurisdiction : The Issuer and MAHB shall unconditionally and irrevocably submit to the non-exclusive jurisdictions of the courts of Malaysia.

(xv) Other Conditions : The Sukuk shall at all times be governed by the guidelines issued and to be issued from time to time by the SC, BNM and/or any other authority in Malaysia having jurisdiction over matters pertaining to the Sukuk, and the FAST Rules.

(xvi) Clear Market : For the first issuance of the ICPs and the IMTNs, from the date of provision of a formal offer by the Joint Lead Managers to sixty (60) days after the first issuance of the ICPs and IMTNs, as the case may be, and for subsequent issuances of the IMTNs, from sixty (60) days before the relevant issuance date to sixty (60) days after the relevant issuance date, the Issuer and MAHB shall ensure that no other borrowings, debt instruments or securities issued and/or guaranteed by the Issuer, MAHB and/or any of its subsidiaries and associated companies are mandated, syndicated or privately placed which may, in the opinion of the Joint Lead Managers, have the effect of prejudicing the successful completion of this transaction and the tender and/or placement and/or selling down of the Sukuk.

(xvii) Adverse Market : From the date of provision of a formal offer by the Joint Lead Managers until the first issue date of the Sukuk, the Joint Lead Managers retain the right to amend, withdraw and/or terminate the offer if there occurs any event or circumstance which, in the opinion of the Joint Lead Managers, may materially and adversely affect any of the international and domestic money, capital or syndicated loan markets, the business activities of the Issuer, MAHB and/or any of its subsidiaries and/or associated companies, and/or the social, political, financial and/or economic situation in Malaysia.

(xviii) Compensation for late : Ijarah:


40

and/or default payment(s) (“Ta’widh”):

In the event of overdue payments of any amount due under the Ijarah agreement and the Purchase Undertaking, the Issuer and MAHB shall pay the compensation on such overdue amount at the rate and manner prescribed by the SC’s Shariah Advisory Council from time to time in accordance with Shariah. Commodity Murabahah: In the event of overdue payments of any amount due under the Sukuk, MAHB shall pay the compensation on such overdue amount at the rate and manner prescribed by the SC’s Shariah Advisory Council from time to time in accordance with Shariah


41

Annexure 1

Leases Assets2

Sukuk Proceeds

Sukuk

Periodic / One-off Distributions5Periodic/ One-off Ijarah Rentals4

Purchase Undertaking

SPV (Issuer) Sukukholders

MAHB

(Obligor/Originator) Sale Proceeds equivalent to the Sukuk proceeds

3

2Sells Asset1

Step 1

A special purpose vehicle, SPV (“Issuer”) shall be set-up. MAHB and the Issuer (acting on behalf of the Sukukholders) shall f rom time to timeexecute asset purchase agreement(s), under which MAHB shall sell certain leasable Shariah-compliant assets (the “Assets”), by way oftransfer of benef icial ownership, to the Issuer for a mutually agreed asset purchase price which shall be at all times comply with the SC’sShariah.Advisory Council Pricing Guidelines. Pursuant to the Trust Deed and Asset Declaration of Trust, the SPV shall hold the Assets on trustfor the Sukukholders.

Step 2The Issuer shall issue Sukuk to the Sukukholders to evidence the Sukukholders’ proportionate undivided benef icial ownership and/or interest inthe Trust Assets (entitling the Sukukholders to, amongst others, receive the Ijarah rentals and all other payments in relation to the TrustAssets). The proceeds from the Sukuk will be used by the Issuer to purchase the Assets f rom MAHB.

Step 3 The Issuer shall lease the Assets to MAHB under an Ijarah Agreement for a specif ic lease term in return for periodic /one-off Ijarah payments.There shall be purchase undertaking executed by MAHB for the benef it of the Issuer (acting on behalf of the Sukukholders).

Step 4 MAHB shall pay periodic/one-off Ijarah rentals due under the Ijarah Agreement to the Issuer,

Step 5

The Issuer shall make periodic/one-off distributions to Sukukholders equivalent to the periodic/ one-off Ijarah rentals received from MAHB. OnMaturity Date, Event of Default (“EOD”)/ Dissolution Event or Mandatory Redemption Event, MAHB, as the Obligor, shall purchase the Assetsand the Issuer shall sell the Assets at the Exercise Price, pursuant to the Purchase Undertaking executed by MAHB for the benefit of the Issuer(acting on behalf of the Sukukholders).


42

Annexure 2

SPV(Issuer)

Sells the Commodity at DSP

Sukukholders

Broker ABroker B

Sells the

CommodityOrder & Undertaking To

PurchaseIssues

Purchases the Commodity

Appoints SPV

as

3a

5

MAHB2

4

3b

1

SPV(Issuer /

PurchaseAgent)

Sells the Commodity at the Sale Price

Sukukholders

Supplier of commodityBuyer of commodity

Sells the Commodity

Issues Purchase

Order & Undertaking To Purchase

Pur

Issues Sukuk

Purchases the Commodity

Appoints SPVAs Wakeel

3

6

MAHB(Purchaser) 2

5

4

1

7

Payment of Sale Price =Purchase Price + Profit

Commodity Trading ParticipantCommodity Trading

Participant

Documents

Private & Confidential Malaysia Airports Capital Berhad