1. Background Information of CIMB Bank Berhad Issuer (i)

Name

:

CIMB Bank Berhad

(ii)

Address

:

Correspondence Address No.6, Jalan Tun Perak, 50050 Kuala Lumpur Registered Address 5th Floor, Bangunan CIMB Jalan Semantan Damansara Heights 50490 Kuala Lumpur

(iii)

Business Registration No.

:

13491-P

(iv) Date /Place of Incorporation

:

30 December 1972 / Malaysia

(v)

:

Not applicable

(vi) Status

:

Resident controlled company / Bumiputra controlled company

(vii) Principal Activities

:

To carry on commercial banking and other related financial services

(viii) Board of Directors (as at 31 October 2008 )

:

Tan Sri G.K. Rama Iyer Dato’ Dr. Mohamad Zawawi bin Ismail

Date of Listing (in case of a public listed company)

Datuk Dr. Syed Muhamad bin Syed Abdul Kadir Tan Sri Dato’ Seri Haidar Mohamad Nor Dato’ Sri Mohamad Nazir bin Abdul Razak Tunku Dato’ Ahmad Burhanuddin Dr. Gan Wee Beng Dato’ Mohd Shukri bin Hussin Dato’ Zainal Abidin bin Putih Dato’ Seri Yeap Leong Huat

i

(ix) Structure of shareholding and name of shareholder or, in the case of public company, names of all major shareholders (as at 30 September 2008)

:

Direct

Shareholder CIMB Group Sdn Bhd

(x)

No. of Ordinary Shares 2,973,976,500

% 99.998

Authorised share capital (as at 30 September 2008 )

:

RM7,550,125,000 divided into 7,000,000,000 ordinary shares of RM1.00 each, 500,000,000 perpetual preference shares of RM1.00 each, 1,000,000 redeemable preference shares of RM0.10 each and 200,000 non-cumulative redeemable preference shares of RM0.10 each, 5,000,000,000 redeemable preference shares of RM0.01 each and 5,000 non-cumulative perpetual preference shares of RM1.00 each

Paid-up share capital (as at 30 September 2008 )

:

RM3,203,750,881 comprising 2,974,009,486 ordinary shares of RM1.00 each, 200,000,000 perpetual preference shares of RM1.00 each, 13,000 redeemable preference shares of RM0.10 each and 2,974,009,486 redeemable preference shares of RM0.01 each.

2. Principal Terms and Conditions of the Capital Securities a.

Names of parties involved in the proposed transaction (where applicable) (i)

Principal Adviser(s)/ Lead Arrangers(s)

:

CIMB Investment Bank Berhad (CIMB) as principal adviser (Principal Adviser) and lead arranger (Lead Arranger)

(ii)

Arranger(s)

:

Not applicable

(iii)

Valuers

:

Not applicable

ii

(iv) Solicitors

:

Due Diligence Counsel/Counsel for the Issuer: Messrs. Zaid Ibrahim & Co. Transaction Counsel/Counsel for the Adviser: Messrs. Adnan Sundra & Low

(v)

Financial Adviser

:

Not applicable

(vi) Technical Adviser

:

Not applicable

(vii) Guarantor

:

Not applicable

(viii) Trustee

:

Malaysian Trustee Berhad

(ix) Facility Agent

:

CIMB

(x)

Primary Subscribers and amount subscribed (where applicable)

:

To be determined if the issuance is via bought deal basis.

(xi) Underwriter(s) and amount underwritten

:

Not applicable

(xii) Syariah Adviser (where applicable)

:

Not applicable

(xiii) Central Depository

:

BNM

(xiv) Paying Agent

:

BNM

(xv) Reporting Accountant

:

Not applicable

i) Lead Manager / Joint Lead Managers

:

CIMB and such other financial institutions as may be determined by CIMB Bank at its discretion

ii) Tax Adviser

:

PwC Tax Services Sdn Bhd

iii) Market Maker (For Retail Tranche only)

:

CIMB and/or its affiliates and such other parties to be appointed by the Issuer (if any).

Not applicable if the issuance is intended to be via private placement and book building.

(xvi) Others (please specify)

The role of the Market Maker is to (i)

provide a two way price quotation

iii

(ii)

for the Stapled Securities; buy and sell the Stapled Securities based on the price quoted.

Prior to the issuance of the retail tranche, CIMB Bank and the Market Maker(s) shall enter into agreement(s) with regards to the market making arrangements.

b.

Facility Description

:

Programme for the issuance of Capital Securities in the form of unsecured subordinated debt, forming part of the Stapled Securities together with the Subordinated Notes. The Capital Securities are intended to qualify as NIT1 capital of CIMB Bank.

c.

Issue Size

:

Issuance from time to time of up to RM4 billion in nominal value of Capital Securities outstanding at any point in time. For avoidance of doubt, at any point in time up to RM4 billion in nominal value 4 billion of Capital Securities stapled to up to RM4 billion in nominal value of Subordinated Notes may be issued and outstanding.

d.

Issue Price

:

Par to the nominal value of the Capital Securities

e.

Tenor of the Facility/Issue

:

Programme Perpetual, subject to cancellation by the Issuer or Facility Agent in accordance with the terms and conditions of the Programme. Availability Period for Utilization The Programme shall be available for utilization for a period of seven (7) years from first issuance of Capital Securities. First issuance under the Programme will be made within two (2) years of SC approval for the Programme. Each Capital Security Perpetual.

f.

Coupon / interest or equivalent rate (%)

:

Distribution Rate Prior to the occurrence of an Assignment Event (see below), the Capital Securities

iv

will not accrue (Distribution).

cash

distribution

Following the occurrence of an Assignment Event, Distribution will accrue on the Capital Securities at a fixed rate, to be determined prior to issuance of each tranche of Capital Securities, from (and including) the interest payment date under the Subordinated Notes immediately prior to the Assignment Date. Assignment Date means the date of the occurrence of the relevant Assignment Event as specified in the notice to be provided by CIMB Bank to the holders of the Stapled Securities. g.

Coupon / interest Payment frequency and basis

:

Subject always to the item LIMITATION ON PAYMENT OF DISTRIBUTIONS, following the occurrence of an Assignment Event, Distributions will be payable quarterly or semi-annually in arrear (each a “Distribution Date”), to be determined prior to issuance of each tranche of Capital Securities, commencing on the first Distribution Date falling immediately after the Assignment Date. For avoidance of doubt, the first Distribution will include an amount calculated from (and including) the Interest Payment Date under the relevant tranche of Subordinated Notes falling immediately prior to the Assignment Date.

h.

Interest / Coupon payment basis

:

Actual / 365.

i.

Yield to Maturity (%)

:

Each tranche of Capital Securities will be priced on a basis of yield to its first Optional Redemption Date. The applicable yield for each tranche will be determined prior to the issue date of that tranche.

j.

Security /Collateral (if any)

:

Not applicable.

k.

Details on utilisation of proceeds

:

Proceeds from the issuance of each tranche of Capital Securities will be used

v

to acquire the Note Assignment Right under the Note Assignment Agreement (see item x (12)). l.

Sinking Fund (if any)

m.

Rating

n.

:

Not applicable.

-

Credit Rating Assigned

:

The indicative rating for the Stapled Securities is AA-.

-

Name of Rating Agency

:

Malaysian Rating Corporation Berhad

:

The Capital Securities shall be issued in accordance with:

Form and Denomination

i)

the CODE OF CONDUCT AND MARKET PRACTICES FOR THE MALAYSIAN BOND MARKET issued by the Institute Peniaga Bon Malaysia and approved by BNM (IPBM Code);

ii)

the

RULES ON THE SCRIPLESS SECURITIES UNDER THE REAL TIME ELECTRONIC TRANSFER OF FUNDS AND SECURITIES (RENTAS) SYSTEM issued

by BNM (Rentas Rules); and iii) the

RULES ON SYSTEM FOR

FULLY AUTOMATED ISSUING/TENDERING

issued by BNM (FAST Rules), The Rentas Rules shall prevail to the extent of any inconsistency between the Rentas Rules and the IPBM Code. The Capital Securities shall be issued in bearer form represented by a global certificate to be deposited with BNM as depositary, exchangeable for definitive bearer form in certain limited circumstances. The denomination of the Capital Securities shall be in multiples of RM5,000 subject to a minimum of RM10,000 at point of issuance. o.

Mode of Issue

:

Each tranche of Capital Securities may be issued via private placement on a best efforts basis, or on a bought deal basis, or

vi

book building on a best efforts basis, with information memorandum or prospectus, as may be applicable for the intended subscribers. p.

Selling Restrictions

:

Capital Securities Sophisticated Investors

intended

for

Selling Restrictions at Issuance: The Capital Securities may only be offered, sold, transferred or otherwise disposed directly or indirectly to a person to whom an offer or invitation to subscribe for the Capital Securities and to whom the Capital Securities are issued would fall within: 1.

2.

SCHEDULE 6 or SECTION 229(1)(B) or SCHEDULE 7 or SECTION 230(1)(B); and SCHEDULE 9 or SECTION 257(3)

of the CAPITAL MARKETS & SERVICES ACT 2007, as amended from time to time (CMSA).

Selling Restrictions after Issuance: The Capital Securities may only be offered, sold, transferred or otherwise disposed directly or indirectly to a person to whom an offer or invitation to purchase the Capital Securities would fall within: 1. and 2.

SCHEDULE

6 or SECTION 229(1)(B);

SCHEDULE 9

or SECTION 257(3)

of the CMSA.

Capital Securities intended for Retail Investors No selling restrictions. However, retail investors will not be able to trade their holdings of Stapled Securities except to the Market Maker. The Market Maker will be able to trade its holdings of

vii

the Stapled Securities to any investor. q.

Listing Status

:

The Capital Securities will not be listed on Bursa Malaysia Securities Berhad or any other stock exchange.

r.

Minimum Level of Subscription (RM or %)

:

10% of the Capital Securities to be issued if the issuance is via book building basis. 100% of the Capital Securities to be issued if the issuance is via bought deal basis or private placement basis.

s.

Other regulatory approvals required in relation to the issue, offer or invitation and whether or not obtained (please specify)

:

1.

Approval from BNM for classification of the Capital Securities as NIT1 capital of CIMB Bank pursuant to the RWCA Framework. Application to BNM has been made vide letter dated 26 September 2008.

2.

Approval from BNM for the incorporation/establishment of Commerce Returns as a subsidiary of CIMB Bank.

Application to BNM has been made vide letter dated 26 September 2008. BNM’s approval was obtained vide letter dated 28 November 2008 for application 1. and 2. above. 3.

Approval of the SC for the issuance of the Subordinated Notes by Commerce Returns. The above application has been made to the SC in an even-dated application.

4.

Approval of the Securities Commission (SC) has been obtained vide letter dated 17 October 2008 for a waiver from PARAGRAPH 6.01 – OTHER REGULATORY APPROVALS THE PDS GUIDELINES to allow

OF

this submission for approval of the Stapled Securities prior to obtaining approval from BNM.

5.

Approval of the SC has been obtained vide letter dated 17 October 2008 for

viii

waivers from certain provisions under the SC’s GUIDELINES ON THE MINIMUM CONTENTS REQUIREMENTS FOR TRUST DEEDS in respect of the Stapled

Securities. 6.

t.

u.

Conditions Precedent

Representations and Warranties

:

:

A waiver from PARAGRAPH 1.03 of PART III of the SC’s PROSPECTUS GUIDELINES was obtained vide letter dated 17 October 2008.

Customary conditions precedent for a transaction of this nature including: (a)

legal opinions from the Solicitors to the Lead Arranger;

(b)

certified copies of the following: (i)

the memorandum and articles of association, and any other constitutive documents of CIMB Bank; and

(ii)

the resolution(s) of the Board of Directors of CIMB Bank and any other internal authorisations authorising issuance of the Capital Securities, the execution of documents relating to the Capital Securities and the entry into and performance of the transactions contemplated thereby;

(c)

approval of the SC for issuance of the Stapled Securities; and

(d)

such other conditions precedent as may be advised by the solicitors to the Lead Arranger and agreed to by CIMB Bank.

Representation and warranties will be included in the subscription agreement to the Capital Securities, and will include such representation and warranties customary and standard for a facility of this nature and shall include, but not limited to the following:

ix

v.

Events of Default

:

1.

The Issuer is duly incorporated and validly in existence and has the power and authority to carry out its business;

2.

The Issuer has the power to enter into the financing documents in relation to the Capital Securities and exercise its rights to perform its obligations under the financing documents in relation to the Capital Securities;

3.

Entry into and the exercise of the Issuer’s rights and obligations under the financing documents in relation to the Capital Securities do not violate any existing law or regulation;

4.

The financing documents in relation to the Capital Securities are valid, binding and enforceable;

5.

All necessary actions, authorisations and consents required under the financing documents in relation to the Capital Securities and the Capital Securities have been obtained and remain in full force and effect;

6.

The audited accounts of the Issuer are prepared in accordance with generally accepted accounting principles and standards and represent true and fair view;

7.

Any other representation and warranties as may be advised by the Solicitors and agreed by CIMB Bank.

There are no events of default under the Capital Securities. Upon occurrence of any of the following events (Enforcement Events): (a)

a default made in the payment of any nominal value of the Capital Securities on the due date for payment thereof; or

x

(b)

a default made in the payment of Distribution amounts (including any additional amounts) on the Capital Securities on the due date for payment thereof, which default continues for 14 days consecutively (other than nonpayment of Distribution under the item LIMITATION ON PAYMENT OF DISTRIBUTIONS)

the holders of the Capital Securities may, at their discretion and without further notice, institute winding up proceedings against CIMB Bank in Malaysia (but not elsewhere) provided that, such holders shall have no right to accelerate payment of such Capital Securities in the case of non-payment of Distribution on, or other amounts owing under, such Capital Securities or a default in the performance of any other covenant of CIMB Bank. If a Winding Up Proceeding (see below) commences in respect of CIMB Bank, or an effective resolution of the shareholders of CIMB Bank is passed for a Winding Up Proceeding in respect of CIMB Bank, the holders of the Capital Securities may, at such holders’ option, declare the principal of and any Distribution amounts on the Capital Securities to be due and payable immediately, by a notice in writing to CIMB Bank. Upon such a declaration, such nominal value and any Distribution amounts shall become immediately due and payable. Winding Up Proceeding means the occurrence of any of the following: (a)

a court or agency or supervisory authority in Malaysia having jurisdiction in respect thereof shall have instituted a proceeding or entered a decree or order for the appointment of a receiver or liquidator in any insolvency, rehabilitation, readjustment of debt, marshalling of assets and liabilities, or similar arrangements involving CIMB Bank or all or substantially all

xi

of its properties, or for the winding up of or liquidation of its affairs and such proceeding, decree or order shall not have been vacated or shall have remained in force undischarged or unstayed for a period of 60 days; or (b)

CIMB Bank files a petition to take advantage of any insolvency statute.

w.

Principal terms and conditions for warrants (where applicable)

x.

Other principal terms and conditions for the Capital Securities

1

Limitation on Payment of Distribution

:

Not applicable

:

If any of the following is satisfied: (A) If CIMB Bank is, on a Distribution Payment Date, in breach of BNM’s minimum capital adequacy ratio requirements applicable to CIMB Bank or; (B) If CIMB Bank would, immediately after a Distribution Payment Date, be in breach of BNM’s minimum capital adequacy ratio requirements applicable to CIMB Bank as a result of the payment of a Distribution on that Distribution Payment Date; Then the right of the holders of the Capital Securities to receive such Distribution shall be lost and CIMB Bank shall have no obligation to pay the holders of the Capital Securities the Distribution which would otherwise have been payable on such Distribution Payment Date. To the extent that the above clause does not apply, if the Payment Limitation Condition (see below) is met (A) on the 15th business day prior to any Distribution Payment Date, and (B) continues to be met from such prior 15th Business Day to (and including) such Distribution Payment

xii

Date, CIMB Bank may, at its option, cancel the Distribution which would otherwise have been payable on such Distribution Payment Date. Any such cancellation will not constitute or be deemed a default by CIMB Bank for any purpose whatsoever. Subject to the provisions below, CIMB Bank’s obligations to make payment of such Unpaid Distribution Amount (see below) shall cease to exist and such payments shall no longer be due and payable. Payment Limitation Condition means that during the 12 month period immediately preceding any Distribution Payment Date, CIMB Bank did not declare and/or pay any dividend to its shareholders, or make any interest payment or distribution, on any securities or instruments ranking junior to the Capital Securities. Unpaid Distribution Amount means any Distribution which is cancelled by CIMB Bank pursuant to this Limitation on Payment of Distributions. Notwithstanding the above, if (i) the Capital Securities no longer qualify as NIT1 capital of CIMB Bank for the purposes of BNM’s minimum capital adequacy requirements under any applicable regulations, and such disqualification has been confirmed by BNM, and (ii) CIMB Bank is not in breach of BNM’s minimum capital adequacy ratio requirements applicable to CIMB Bank, any Unpaid Distribution Amounts shall become cumulative and compounding at the Distribution rate. In such circumstances, any Unpaid Distribution Amounts, together with accrued amounts relating to the compounding of such Unpaid Distribution Amounts, will become due and payable upon Redemption of the

xiii

Capital Securities. 2

Dividend and Capital Stopper

:

Following an Assignment Event, in the event that CIMB Bank has not (a) made a full payment of any Distribution on a Distribution Payment Date or (b) fully paid to holders of the Capital Securities an amount equal to accrued and unpaid interest payments (if any) on the Subordinated Notes previously stapled to such Capital Securities and any other amounts outstanding (if any) on such Subordinated Notes from the last interest payment date of such Subordinated Notes before the Assignment Date up to (and excluding) the Assignment Date (which has not otherwise been fully met through the payment of a Distribution), then (A) CIMB Bank shall not pay any dividends to its shareholders or make any interest payment or distribution on any security or instruments ranking pari passu with or junior to the Capital Securities (the Dividend Stopper); and (B) CIMB Bank shall not redeem, purchase, reduce or otherwise acquire any of its ordinary shares, preference shares, securities or instruments ranking pari passu with or junior to the Capital Securities, or any securities of any of its subsidiary undertakings benefiting from a guarantee from CIMB Bank, ranking, as to the right of redemption of principal, or in the case of any such guarantee, as to the payment of sums under such guarantee, pari passu with or junior to the Capital Securities (the Capital Stopper). The Dividend Stopper or Capital Stopper shall continue to apply, as the case may be, until either (i),(ii) or (iii) below is met: (i)

CIMB Bank has paid full Distributions due for two or, in the case of quarterly payments, four consecutive Distribution Payment Dates

xiv

after the application of the Dividend Stopper and the Capital Stopper; (ii)

CIMB Bank has irrevocably set aside in a separately designated trust account of CIMB Bank for payment to the holders of the Capital Securities, an amount sufficient to provide for the full Distributions due for two or, in the case of quarterly payments, four consecutive Distribution Payment Dates after the application of the Dividend Stopper and the Capital Stopper and if upon determination of the amount of each of such Distribution there is a shortfall in the amounts set aside with reference to the amounts so determined, an amount at least equal to such shortfall shall be paid or irrevocably set aside in the same manner; or

(iii)

an Optional Distribution (see below) has, at the option of CIMB Bank and subject to BNM’s approval, been paid to all holders of the Capital Securities equal to, without duplication of amounts previously paid to the holders of the holders of the Capital Securities, amounts outstanding (if any) on the Subordinated Notes or the Capital Securities which were scheduled to be paid in the 12 months before the date of payment of the Optional Distribution;

Optional Distribution means amount, equal to the sum of:

an

(a) any due and unpaid Interest Amount in respect of the Subordinated Notes; and

xv

(b) any due and unpaid Distribution in respect of the Capital Securities, each scheduled to have been paid during the 12 month period immediately preceding the date on which CIMB Bank shall pay the Optional Distribution. 3

Optional Redemption

CIMB Bank may, at its option and subject to the Redemption Conditions (see below) being satisfied, Redeem (see below) the Capital Securities (in whole but not in part) on any Optional Redemption Date. Redemption Conditions means: (1)

CIMB Bank is solvent at the time of any Redemption (see below) of the Capital Securities and immediately thereafter;

(2)

CIMB Bank is not in breach of BNM’s minimum capital adequacy ratio requirements applicable to CIMB Bank; and

(3)

CIMB Bank has obtained the written approval of BNM prior to Redemption of the Capital Securities.

Redeem means: (1)

redeem the Capital Securities for the Redemption Amount (see 7. REDEMPTION AMOUNT below); or

(2)

procure an entity to acquire the Capital Securities for the Redemption Amount.

“Redemption” and “Redeemed” have the corresponding meanings. 4

Optional Redemption Date

:

For each tranche of Capital Securities, a date falling no earlier than the fifth anniversary of the relevant Issue Date, and any Distribution Payment Date

xvi

thereafter. 5

Tax Redemption

:

If there is more than an insubstantial risk that: (1)

CIMB Bank has or will become obliged to pay Additional Amounts (see 15. WITHHOLDING TAXES) or any Taxes other than the Additional Amounts (if any), in relation to the Capital Securities;

(2)

CIMB Bank has or will become obliged to pay Additional Amounts pursuant to the terms and conditions of the intercompany subordinated loan and/or any taxes other than the Additional Amounts (if any), in relation to the inter-company subordinated loan;

(3)

The issuer of the Subordinated Notes has or will become obliged to pay Additional Amounts pursuant to the terms and conditions of the Subordinated Notes and/or any taxes other than the Additional Amounts (if any), in relation to the Subordinated Notes;

(4)

The issuer of the Subordinated Notes is not able to fully deduct interest payments made under the Subordinated Notes from interest income received under the inter-company subordinated loan; or

(5)

CIMB Bank would no longer obtain tax deductions for the purposes of Malaysian corporation tax for any payment in respect of the inter-company subordinated loan (see PRINCIPAL TERMS CONDITIONS FOR SUBORDINATED NOTES);

AND THE

as a result of a change in, or

xvii

amendment to, the laws or regulations of Malaysia or any political subdivision or any authority thereof or therein having power to tax, or change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the date of first issue and CIMB Bank cannot, by taking reasonable measures available to it, avoid such obligations, then CIMB Bank may, at its option, Redeem the Capital Securities (in whole, but not in part) at the Redemption Amount, subject to the Redemption Conditions being satisfied. 6

Regulatory Redemption

:

If the Stapled Securities no longer qualify as NIT1 capital of CIMB Bank for the purposes of BNM’s capital adequacy requirements under any regulations applicable to CIMB Bank, then CIMB Bank may, at its option, Redeem the Capital Securities (in whole, but not in part) at the Redemption Amount, subject to the Redemption Conditions being satisfied.

7

Redemption Amount

:

In the case of an Optional Redemption, a Tax Redemption or a Regulatory Redemption, an amount equal to 100% of the face value together with accrued but unpaid Distributions (if any) relating to the then current Dividend period (if any) up to (and excluding) the date on which the Capital Securities are Redeemed.

8

Note Assignment

:

In respect of a tranche, if an Assignment Event occurs: (1)

All amounts which become due and payable in respect of the tranche of Subordinated Notes after the occurrence of an Assignment Event (the Assignment Event Date) (including any previously deferred Interest amounts and whether or not relating to the interest periods prior to the

xviii

Assignment Event Date) will be payable to the Assignment Right Holder (see 10 ASSIGNMENT RIGHT HOLDER); (2)

The tranche of Subordinated Notes and all rights, title and interests of the holders in them are automatically assigned and transferred to the Assignment Right Holder on the Assignment Event Date; and

(3)

The Assignment Right Holder may at its option Redeem the tranche of Subordinated Notes accordingly.

Each Subordinated Note holder irrevocably appoints the Assignment Right Holder to be the agent of the Subordinated Note holder to do all such acts and things (including signing all documents or transfers) as may in the opinion of the Assignment Right Holder be necessary or desirable to be done in order to record or perfect the transfer of the Subordinated Notes from the Subordinated Note holder to the Assignment Right Holder under the Note Assignment. Such acts and things shall include the execution and delivery of irrevocable standing instructions by each Subordinated Note holder to its ADI to effect the transfer of the Subordinated Notes to the Assignment Right Holder and the delivery by the Subordinated Note holder of a copy of such instruction to the Assignment Right Holder and the Issuer. 9

Assignment Events

:

An assignment event means the occurrence of any of the following events: (1)

the Assignment Right Holder in its absolute discretion elects that an Assignment Event occurs; or

(2)

BNM in its absolute discretion

xix

elects that an Assignment Event occurs; or (3)

The redemption of the Capital Securities by CIMB Bank pursuant to a Tax Redemption or a Regulatory Redemption; or

(4)

The deferral of any interest on the Subordinated Notes in accordance with the Interest Deferral Right and the Mandatory Interest Deferral; or

(5)

CIMB Bank is in breach of BNM’s minimum capital adequacy ratio requirements applicable to CIMB Bank; or

(6)

Commencement of a Winding Up Proceeding in respect of Commerce Returns or CIMB Bank; or

(7)

Appointment of an administrator in connection with a restructuring or similar arrangements of CIMB Bank or all or substantially all of its properties; or

(8)

An Enforcement Event under the terms of the Subordinated Notes or the Capital Securities; or

(9)

Commerce Returns ceases to be, directly or indirectly, a wholly-owned subsidiary of CIMB Bank.

In addition to the above, an Assignment Event is deemed to have occurred in relation to a tranche of Capital Securities on the business day prior to the Maturity Date for the tranche of Subordinated Notes that was stapled to that tranche of Capital Securities. 10

Assignment Right Holder

:

CIMB Bank

xx

11

Stapling

:

Transfer Restriction Each Capital Security will be stapled to a Subordinated Note. Each Subordinated Note and Capital Security together will constitute a stapled security. Until an Assignment Event occurs and the Subordinated Notes have been transferred to the Assignment Right Holder, the Subordinated Notes cannot be transferred without the Capital Securities also being transferred to the same transferee. Un-stapling Upon Assignment of the Subordinated Notes to the Assignment Right Holder upon the occurrence of an Assignment Event, the corresponding Capital Security ceases to be stapled to the Subordinated Note. For the avoidance of doubt, the Subordinated Note does not cease to be stapled to the corresponding Capital Security which forms part of the Stapled Security in any other circumstances. Once unstapled, the Subordinated Notes may not be assigned to any person other than the Assignment Right Holder.

12

Note Assignment Agreement

:

Investors will subscribe for the Capital Securities by paying CIMB Bank the consideration equal to the nominal value of the Capital Securities. CIMB Bank will then enter into a note assignment agreement (the Note Assignment Agreement) with such investors pursuant to which: i)

CIMB Bank pays such investor upfront (in an amount equal to the nominal value for the Capital Securities purchased by such investors) for the right to require the assignment of the Subordinated Notes to CIMB Bank (as Assignment Right Holder) upon an Assignment

xxi

Event, whereby upon an Assignment Event, the Subordinated Notes will be transferred automatically to CIMB Bank.

13

Ranking

:

ii)

Such investors apply this upfront amount to subscribe for the relevant amount of Subordinated Notes from Commerce Returns, at par.

iii)

Such investors shall execute and deliver irrevocable standing instructions to their respective ADIs to effect the transfer of the Subordinated Notes to the Assignment Right Holder and deliver a copy of such instruction to the Assignment Right Holder and the issuer of the Subordinated Notes.

The Capital Securities are direct and unsecured obligations of CIMB Bank. Amounts payable on the Capital Securities will be subordinated in right of payment upon the occurrence of any winding up proceeding to the prior payment in full of all deposit liabilities and all other liabilities of CIMB Bank (including liabilities of all offices and branches of CIMB Bank wherever located and any debt securities (whether subordinated or unsubordinated) of CIMB Bank that rank senior to the Capital Securities) except, in each case, to those liabilities which by their terms rank equal with or junior to the Capital Securities. Claims in respect of the Capital Securities will rank pari passu and without preference among themselves and with the most junior class of preference shares (if any) of CIMB Bank, but in priority to the rights and claims of holders of the ordinary equity shares of CIMB Bank.

14

Guarantee

:

The Capital Securities will not be

xxii

secured or covered by a guarantee of CIMB Bank or any related entity of CIMB Bank, or any other arrangement that legally or economically enhances the seniority of the claims of the holders. 15

Withholding taxes

:

All payments in respect of the Capital Securities by or on behalf of CIMB Bank shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or government charges of whatever nature imposed, levied, collected, withheld or assessed by or within any relevant jurisdiction, unless the withholding or deduction of the taxes is required by law. In the event such taxes are imposed, CIMB Bank will not have to pay additional amounts (Additional Amounts) as may be necessary in order that the net amounts received by the holders after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Capital Securities in the absence of the withholding or deduction.

16

Voting Rights

Holders will not be entitled to receive notice of or attend or vote at a meeting of the ordinary shareholders of CIMB Bank or to participate in the management of CIMB Bank.

17

Amendments to the Conditions

Amendments to the conditions of the Capital Securities shall only be made with the prior approval of BNM and the SC.

18

Governing Laws

:

The Capital Securities will be governed by, and shall be construed in accordance with Malaysian Law.

xxiii