ASSIGNMENT OF EA PROCEEDS ACCOUN

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ASSIGNMENT OF EA PROCEEDS ACCOUN Powered By Docstoc
					1.   Earmarked Assets Intercreditor Agreement

     An Earmarked Assets Intercreditor Agreement (“EAIA”) was entered into between OIB
     Industries Berhad (“OlB”), Irredeemable Convertible Bonds (“ICB”) - Holders (the
     “Optionholders”), Malaysian Trustees Berhad (“MTB”) (in the capacity as the “EA
     Intercreditor Agent” and the “Security Agent”) on 30 November 2006 to establish agreed
     procedures and terms for the exercise by the EA Intercreditor Agent of its rights in
     relation to the earmarked assets (“EA”) listed below, to address certain intercreditor
     issues and for the appointment of the Security Agent.

     The EA are as follows:

     (i)     All the issued share capital (consisting of 180,000,000 shares of RM1.00 each) of
             MA Realty Sdn Bhd (“MA Realty”);

     (ii)    All the issued share capital (consisting of 210,000,000 shares of RM1.00 each) of
             Naturelle Sdn Bhd (“Naturelle”);

     (iii)   All the issued share capital (consisting of 128,210 of RM1.00 each) of Harta
             Sekata Sdn Bhd (“Harta Sekata”);

     (iv)    A piece of land held by MA Realty under the title No. MLO 2277, HS(D)60410 in
             the district of Johor Bahru in the state of Johor;

     (v)     The 334 pieces of land held by Naturelle in the district of Jelebu in the state of
             Negeri Sembilan;

     (vi)    A piece of land held by Harta Sekata under PT No. 242 HS(D) 114558 in the
             district of Petaling in the state of Selangor; and

     (vii)   A piece of land held under PT 243, HS(D) 114559 in the town of Petaling Jaya in
             the district of Petaling in the state of Selangor Darul Ehsan (the “Affected Land”)
             subject to the Affected Land being rendered free of all proceedings and security
             interests with Harta Sekata being the legal and beneficial owner of the Affected
             Land no later than 12 months before the maturity date of the RM246,327,068
             nominal value of six(6) year ICB to be issued by OIB pursuant to, inter alia,the
             Restructuring Scheme.

     The salient terms of the EAIA are as follows:-

     (i)     All undertakings of OIB shall be subject to the completion of the acquisitions of
             MA Realty, Naturelle and Harta Sekata (the “Acquisitions”). In addition, the EAIA
             is subject to fulfilment of certain conditions precedent, including the execution of
             power of attorneys (“PAs”) in favour of the EA Intercreditor Agent over the EA by
             OIB, Harta Sekata, MA Realty and Naturelle (“PA Companies” or “PA
             Company”).

     (ii)    OIB has undertaken to complete the sale of all the EA on or before the date that
             falls six (6) months prior to the maturity date of the ICB except for the Affected
             Land, unless the proceedings on the Affected Land have been resolved with
             Harta Sekata, the legal and beneficial owner of the Affected Land such that the
             Affected Land is free from all proceedings and encumbrances 12 months before
             the maturity date of the ICB.




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     (iii)   The PA Companies, or any of them may sell any of the EA without the need to
             obtain the consent of the EA Intercreditor Agent if the sale price of the EA is not
             less than 80% of the fair market value of that EA.

     (iv)    In the event that the EA are shares belonging to a PA Company (the “Sale
             Company”), OIB or any of the PA Company shall not enter into any agreement to
             sell the EA without the prior consent of the EA Intercreditor Agent if the sale price
             of each share in the Sale Company is less that 80% of the net tangible assets of
             the Sale Company.

     (v)     OIB undertakes to procure the depositing of the sale proceeds of the EA (after
             deducting amounts payable to any secured creditor, real property gain tax, any
             other taxes payable and reasonable expenses) (the “EA Sale Proceeds”) directly
             into the account opened and maintained by OIB for the deposit of sale proceeds
             from the disposal of the EA (“EA Proceeds Account”).

     (vi)    At any time upon the exercise of a put option following the occurrence of an
             exercise event, the EA Intercreditor Agent, shall be entitled to forthwith exercise
             any of the PAs to effect any sale or disposal or charge any of the EA in
             accordance with the terms of the EAIA and of the PA.

     (vii)   At any time after the occurrence of an exercise event under the Option
             Agreements dated 16 November 2006, or if the Affected Land is not free of all
             proceedings and encumbrances with Harta Sekata being the legal and beneficial
             owner of the Affected Land 12 months prior to the maturity date of the ICB, and
             at that relevant time there are outstanding available ICB, the EA Intercreditor
             Agent shall be entitled to sell or charge 24 million shares in OIB and 24 million
             shares in Mycom Berhad (the “Deposited Securities”) deposited by Kenny Height
             Developments Sdn Bhd in accordance with the terms of the MTB Stakeholder
             Agreement as disclosed in Section 4 below.


2.   Power of Attorney

     Pursuant to the EAIA, OIB has granted an irrevocable PA dated 30 November 2006 to
     MTB as the attorney to do and execute all or any of the following acts, things and
     documents:

     (i)     To sell the following earmarked assets at any time after an exercise event or
             after the day that falls 66 months immediately after the date of the issuance of
             the ICB but not later than the date that falls 90 months immediately after the date
             of the issuance of the ICB by public auction, tender, private contract or otherwise
             for cash upon the instructions of the original ICB holders who represent and hold
             at least 51% of the face value of the ICB:

             (a)     All the issued share capital in MA Realty Sdn Bhd;

             (b)     All the issued share capital in Naturelle Sdn. Bhd;

             (c)     All the issued share capital in Harta Sekata Sdn. Bhd;

     (ii)    To charge the earmarked assets at any time after an exercise event and / or OIB
             has not sold or procured the sale of all the EA by 6 months prior to the expiry of
             the maturity of the ICB.




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3   Assignment of EA Proceeds Account, EA Sale Proceeds and Sale Contracts

    An Assignment of EA Proceeds Account, EA Sale Proceeds and Sale Contracts (the
    “Assignment”) was entered into between OIB (the “Assignor”), Naturelle, MA Realty,
    Harta Sekata (the “Owners”) and MTB (the “Security Agent”) on the 30 November 2006.

    Under the Assignment:

    (i)     The Assignor has assigned absolutely and charged in favour of the Security
            Agent and as continuing security for the payment of the amounts owing under the
            option agreements the (“ICB Secured Amounts”), all its rights and interest to the
            account to be opened and maintained by the Assignor (the “EA Proceeds
            Account”). In addition, the Assignor and each Owner has assigned absolutely
            and charged in favour of the Security Agent and as continuing security for the
            payment of the ICB Secured Amounts, all its rights to the sale proceeds from the
            disposal of the EA (“EA Sale Proceeds”) and all of their rights and interest in and
            to the sale contracts to be entered into between each of the Assignor / the
            Owners with the respective purchasers in connection with the sale and disposal
            by the Assignor or relevant Owner of the EA to such purchaser (“Sale
            Contracts”).

    (ii)    The Assignor will cause each of the Owners to credit into the EA Proceeds
            Account, the EA Sale Proceeds received from or in respect of disposal of the EA.

    (iii)   The Assignor shall cause and ensure that all monies standing to the credit of the
            EA Proceeds Account shall not be withdrawn for any purpose otherwise as
            permitted under the Assignment and all monies received by the Security Agent
            under the Assignment shall be applied towards the payment and repayment of
            ICB Secured Amounts in accordance with the EAIA.

    (iv)    Each of the Assignor and the Owner has appointed the Security Agent as its
            attorney to do and execute all such acts, documents and instruments necessary
            to protect or otherwise perfect the interest of the Security Agent to the security
            created in the Assignment, to demand sue for and recover and take all
            appropriate legal proceedings for the recovery of the EA Sale Proceeds and/or
            the whole or any part of the sums due and payable by the respective purchasers
            under the respective Sale Contracts.




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4.   MTB Stakeholder Agreement

     A Stakeholder Agreement was entered into between Bukit Seremban Jaya Sdn Bhd
     (“BSJ”), Harta Sekata, Kenny Height Developments Sdn Bhd (“Depositing Shareholder”),
     MTB (in its capacity as the “EA Intercreditor Agent” and “Stakeholder”) on 30 November
     2006 (“MTB Stakeholder Agreement”).

     Under the MTB Stakeholder Agreement:

     (i)     BSJ and Harta Sekata have warranted and agreed that Harta Sekata shall be the
             legal and beneficial owner of the property held under PT 243, HS (D) 114559,
             town of Petaling Jaya, district of Petaling, state of Selangor Darul Ehsan (the
             “Affected Land”) free from all proceedings and encumbrances on or before 12
             months before the maturity date of the ICB (“the Proceedings Cut Off Date”).

     (ii)    The Depositing Shareholder and the EA Intercreditor Agent has appointed the
             Stakeholder in relation to the 24 million ordinary shares in Mycom Berhad and 24
             million ordinary shares in OIB (the “Deposited Securities”).

     (iii)   In the event of:

             (a)     an occurrence of an exercise event under the option agreements; or

             (b)     the Affected Land is not free of all proceedings and encumbrances by
                     the Proceedings Cut Off Date and at that relevant time, there shall be
                     outstanding available ICB,

             the Stakeholder shall be entitled to sell and/or charge all or any of the Deposited
             Securities.

     (iv)    The Stakeholder and the EA Intercreditor Agent shall cause the proceeds of the
             sale of Deposited Securities (after payment of all commissions and expenses) to
             be paid into the EA Proceeds Account to be applied in accordance with the terms
             of the EAIA.

     (v)     The Depositing Shareholder shall simultaneously upon the execution of the MTB
             Stakeholders Agreement procure Dato’ Yap Yong Seong to execute a
             Guarantee.

     (vi)    The Depositing Shareholder has appointed the Stakeholder as its attorney and
             has executed a PA on 30 November 2006 to effect such appointment.




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5.   OSK Stakeholder Agreement

     A Stakeholder Agreement was entered into between OIB, Bukit Seremban Jaya Sdn Bhd
     (“BSJ”) and OSK Trustees Berhad (“OSK Stakeholder”) on 30 November 2006 (“OSK
     Stakeholder Agreement”).

     Under the OSK Stakeholder Agreement:

     (i)     As part of the Restructuring and Acquisition Agreement dated 19 March 2003
             (“Restructuring and Acquisition Agreement”) between BSJ and OIB wherein OIB
             has agreed to purchase from BSJ 100,000 ordinary shares at RM1.00 each
             representing 78% of the issued and paid up share capital in Harta Sekata (“Sale
             Shares”) at the purchase consideration of RM48,360,000 to be satisfied by the
             issuance of 48,360,000 new ordinary shares of RM1.00 each in OIB
             (“Consideration Shares”), BSJ warranted and agreed that Harta Sekata shall be
             the legal and beneficial owner of PT 243, HS (D) 114559, town of Petaling Jaya,
             district of Petaling, state of Selangor Darul Ehsan (the “Affected Land”) free from
             all existing proceedings and all encumbrances and BSJ shall do such acts as
             may be necessary to procure that Harta Sekata shall be the legal and beneficial
             owner of the Affected Land free from the proceedings and all encumbrances on
             the date that falls one (1) year before the maturity date of the ICB (“Cut Off
             Date”).

     (ii)    BSJ and OIB have appointed the OSK Stakeholder in relation to the entire
             Consideration Shares which are to be placed with the OSK Stakeholder
             (“Deposited Securities”) in accordance with the terms of the OSK Stakeholder
             Agreement.

     (iii)   In the event that the proceedings are not resolved before the Cut Off Date or if
             the proceedings are resolved but with Harta Sekata not being the legal and
             beneficial owner of the Affected Land free from the proceedings and all
             encumbrances (“Cancellation Event”):-

             (a)     OIB and BSJ shall proceed to cancel the Consideration Shares; and

             (b)     BSJ shall pay to OIB on demand a sum of RM4,836,000 as agreed
                     liquidated damages (“Agreed Compensation”) in respect of the default by
                     BSJ under the OSK Stakeholder Agreement.

     (iv)    Upon the happening of the Cancellation Event, BSJ and OIB shall act and
             execute such documents necessary to cancel the Consideration Shares including
             applying to the Court to effect the Cancellation.

     (v)     In the event that the proceedings are resolved on or before the Cut Off Date, the
             OSK Stakeholder shall release to BSJ the Deposited Securities which are still
             under its custody and/ or its nominee company and all the remaining credit
             balance of the interest bearing account opened and maintained by the OSK
             Stakeholder after deducting any monies payable by BSJ to the OSK Stakeholder
             or OIB under the OSK Stakeholder Agreement.




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