FACILITY LETTER
CONTRACTOR FINANCING
PRIVATE AND CONFIDENTIAL
Our Ref: [
]
Date:
[
]
To:
[ Name of Borrower ]
[ Address ]
Dear Sirs
CREDIT FACILITIES
We are pleased to extend to you (the "Borrower") the following credit facilities (collectively "the
Facilities" and each a "Facility") totalling S$[ ] subject to the following terms and conditions and
the Standard Terms and Conditions Governing Banking Facilities:-
1.
LIMITS/QUANTUM
Limit
( )
Overdraft *[of US$ [ ] up to Singapore Dollars
equivalent to S$ [ ]
S$ [
]
( ) Letter of Credit
(Sight and/or usance up to [ ] days)
S$ [
]
( ) Local Letter of Credit
(Sight and/or usance up to [ ]days)
S$ [
]
( ) Trust Receipts
(Under Letter of Credit *[and Inward Collection Bills]
up to [ ]days)
S$ [
]
( ) Draft Loans (Purchase)
(Up to [ ] days)
S$ [
]
( ) Shipping Guarantee/Airway Bills
(Under Letter of Credit *[and Inward Collection Bills])
S$ [
]
( ) Banker’s Guarantee
(Maximum Tenor excluding claim period: [v] years.
Maximum Claim Period: [ ] months)
S$ [
]
( ) Performance Bond(s)/Bid Bond(s)
S$ [
]
*[Within Overdraft limit, sublimit for:]
OCBC Legal / Sep 09
2
(Tenor : up to [ ]months)
Trade Facility
( )
Letter of Credit
S$ [
]
[ Within Letter of Credit limit, sublimit for:- ]
( )
Trust Receipts
S$ [
]
( )
Shipping Guarantee / Airway Bills
S$ [
]
( )
Local Letter of Credit
S$ [
]
( )
Draft Loans (Purchase)
S$ [
]
( )
Account Receivables Financing
S$ [
]
S$ [
]
Total:
*Combined outstanding under (
sublimit] at any one time.
) to (
) shall not exceed S$[ ] [and/or individual
*The Facilities shall not exceed [v]% of the value of [state security], as determined by the
Bank, at any time.
2.
PURPOSE
[state purpose for which the Facilities are granted ]
3.
( )
PRICING
Overdraft
: [ ]% p.a. over the Bank's prevailing prime lending rate
calculated on daily balance with monthly rests.
[or]
[ ]% p.a. over the Bank's prevailing US$ prime lending rate
calculated on daily balance with monthly rests.
( )
Letter of Credit
: As per the Bank’s prevailing schedule of charges.
[or]
commission at [ ]% per month, subject to a minimum [ ]
months, on the amount of the Letter of Credit.
( )
Local Letter of Credit
: As per the Bank’s prevailing schedule of charges.
[or]
OCBC Legal / Sep 09
3
commission at [ ]% per month, subject to a minimum [ ]
months, on the amount of the Letter of Credit.
( )
Trust Receipts
: FOR SGD
[ ]% p.a. over the Bank's prevailing prime lending rate.
[or]
[ ]% p.a. over the Bank's prevailing *[Cost of Funds]/[Swap
Offer Rate] as determined by the Bank.
FOR FCY
[ ]% p.a. over the Bank's prevailing SIBOR as determined
by the Bank.
[or]
[ ]% p.a. over the Bank's prevailing foreign currency prime
lending rate.
( )
Draft Loans
(Purchase)
FOR SGD
[ ]% p.a. over the Bank's prevailing prime lending rate.
[or]
[ ]% p.a. over the Bank's prevailing *[Cost of Funds]/[Swap
Offer Rate] as determined by the Bank.
FOR FCY
[ ]% p.a. over the Bank's prevailing SIBOR as determined
by the Bank.
[or]
[ ]% p.a. over the Bank's prevailing foreign currency prime
lending rate.
( )
Shipping
Guarantee/Airway
Bill
: As per the Bank’s prevailing schedule of charges.
( )
Accounts
Receivables
Financing
: [ ]% p.a. over the Bank's prevailing prime lending rate.
[or]
[ ]% p.a. over the Bank's prevailing *[Cost of funds]/[Swap
Offer Rate]/[SIBOR] as determined by the Bank.
OCBC Legal / Sep 09
4
[or]
commission at [ ]% flat.
and
commission charged at [ ]% of Net Invoice Value for
approved debtors, subject to a minimum fee of S$[ ] per
invoice.
( )
Performance
Bond(s)/
Bid Bond(s)
: As per the Bank’s prevailing schedule of charges.
[or]
commission at [ ]% per annum subject to a minimum of
S$[ ].
( )
Banker’s Guarantee
: As per the Bank’s prevailing schedule of charges.
[or]
commission at [ ]% per annum subject to a minimum of
S$[ ].
( )
Draft Loans (Sales)
: FOR SGD
[ ]% p.a. over the Bank's prevailing prime lending rate.
[or]
[ ]% p.a. over the Bank's prevailing *[Cost of Funds]/[Swap
Offer Rate] as determined by the Bank.
FOR FCY
[ ]% p.a. over the Bank's prevailing SIBOR as determined
by the Bank.
[or]
[ ]% p.a. over the Bank's prevailing foreign currency prime
lending rate.
The Bank’s current *[prime lending rate]/[board lending rate] is [ ]% p.a.
The rate(s) applicable to the relevant Facility shall hereinafter be referred to as the
"Prescribed Rate". The Bank shall, at its absolute discretion at any time upon notification
(but without your consent), be entitled to revise the Prescribed Rate, the periodic rests
OCBC Legal / Sep 09
5
applicable to the relevant Facility, and the commission, fee or bank charges in respect of
any of the Facilities granted to you. Such notification shall be conclusive and binding on
you.
4.
AVAILABILITY PERIOD
[State relevant availability period. Examples are set out below. ]
( )
The [state type of facility] shall cease to be available after [state date], unless extended
by the Bank in its absolute discretion.
( )
The [state type of facility] shall be available for drawdown subject to fulfilment of all
conditions precedent until [state event] or [state date], whichever is the earlier, unless
extended by the Bank in its absolute discretion.
5.
SECURITY/SUPPORT
The Facilities will be secured by the following in form and substance satisfactory to the
Bank :[List security(ies) applicable to Facilities granted. Examples are set out below.]
( )
Debenture over Assets
*[Existing] Debenture incorporating a *[Fixed]/[Floating]/[Fixed and Floating] charge over
[all assets] [state specific assets].
( )
Charge/Letter of Set-Off
( )
*[Existing] Charge of Cash and Security Agreement (First Party) for [fixed
deposits/ACU fixed deposits/structured deposits] amounting to not less than
[state currency and amount].
( )
*[Existing] Charge of Cash and Security Agreement (Third Party) for [fixed
deposits/ACU fixed deposits/structured deposits] amounting to not less than
[state currency and amount] maintained by [name(s) of third party depositor(s)]
with the Bank.
( )
*[Existing] Letter of Set-Off (First Party) for [fixed deposits/ACU fixed
deposits/structured deposits] amounting to not less than [state currency and
amount].
( )
*[Existing] Letter of Set-Off and Guarantee (Third Party) for [fixed deposits/ACU
fixed deposits/structured deposits] amounting to not less than [state currency
and amount] maintained by [name(s) of third party depositor(s)] with the Bank.
( )
Existing charge over deposits dated [ ] for [fixed deposits/ACU fixed
deposits/structured deposits] amounting to not less than [state currency and
amount] maintained by [name(s) of third party depositor(s)] with the Bank.
( )
Existing
OCBC Legal / Sep 09
letter
of
set-off
dated
[ ]
for
[fixed
deposits/ACU
fixed
6
deposits/structured deposits] amounting to not less than [state currency and
amount] maintained by [name(s) of third party depositor(s)] with the Bank.
( )
( )
Charge of Securities
(a))
*[Existing] *[[Memorandum of Charge/Assignment (First Party)]/[Memorandum of
Charge/ Assignment (Third Party)] or such other security over securities, shares,
stocks, bonds, notes, interest or units in mutual funds or unit trust schemes or
other collective investment schemes, in form and substance acceptable to the
Bank and as required by the Bank from time to time, whether quoted or
otherwise (hereinafter referred to as “the Charged Securities”).
(b)
In the case of scripless securities, a sub-account be opened with [ ] and all the
Charged Securities be transferred to the said sub-account.
(c)
Execution of such transfer or other forms and notices as may be required by the
Bank from time to time in favour of the Bank or such other party as the Bank may
in its absolute discretion direct or nominate and deliver the certificates relating to
the Charged Securities to the Bank or to its nominee(s).
Charge/Assignment of Proceeds
*[Existing]/[Charge]/[Assignment] of proceeds or receivables from [name of project] *[with
notification and acknowledgement of assignment]/[without notification (unless required
by the Bank)]
Guarantee
( )
*[Existing] Deed of Guarantee and Indemnity for *S$[ ] / [all monies] from [insert name
of guarantor].
( )
*[Existing] Deed of Proportionate Guarantee and Indemnity for *S$[ ] / [all monies] from
your shareholders [insert name of guarantors] in the *[proportions of their respective
shareholdings]/[following proportions: [state proportions]].
( )
*[Existing] Letter of Comfort and Awareness by [ ].
( )
*[Existing] Banker's Guarantee for S$[ ] by [ name of bank/financial institution ] expiring
no earlier than [date].
( )
*[Existing] Standby Letter of Credit for S$[ ] by [ name of bank/financial institution ]
expiring no earlier than [date].
Deed of Subordination
( )
*[Existing] Deed of Subordination of *[shareholders']/[directors’]/[related corporations’]
loans owing by you to your *[shareholders]/[directors]/[related corporations].
( )
Assignment of Insurances (Life Policy)
( )
*[Existing] Deed of Assignment (Life Policy) on the life of [name of life insured] with
notification of assignment to and acknowledgement of assignment from insurers.
OCBC Legal / Sep 09
7
6.
CONDITIONS PRECEDENT TO AVAILABILITY OF FACILITIES
The Facilities will be available for your use upon completion of all matters and
documentation to the satisfaction of the Bank, and upon:
6.1
receipt of the following (where applicable) in form and substance acceptable to the
Bank, including but not limited to:[General provisions]
(a)
Copy of your Certificate of Incorporation and Memorandum and Articles of
Association and that of the guarantors, mortgagors, third party depositors and
any persons (other than you) providing security for the Facilities (collectively “the
Surety”), certified as a true copy by a Director or the Company Secretary.
(b)
Copy of your Board Resolutions and Shareholders' Resolutions (if required by
the Bank) and that of the Surety, if a corporation, in the Bank’s prescribed
format and duly certified as a true copy by two Directors or a Director and the
Company Secretary.
(c)
All security and support documents containing such terms and conditions as the
Bank may in its absolute discretion require duly executed and duly stamped
(where applicable).
(d)
Form for appointment of process agent duly executed (where applicable).
(e)
Spousal Consent duly executed (where applicable).
(f)
Statement Containing Particulars of Charge in respect of the relevant security
documents for filing with the Accounting and Corporate Regulatory Authority.
(g)
All insurance policies and assignments required by the Bank.
(h)
Without prejudice to the generality of the foregoing, adequate insurance for
such purposes and for such amounts as the Bank shall deem fit from time to
time taken out with OVERSEAS ASSURANCE CORPORATION LIMITED or
such other insurance company acceptable to the Bank on terms and conditions
acceptable to the Bank and assigned/endorsed in favour of the Bank as
mortgagee and loss payee. All premium charges are to be borne by you and
must be promptly paid. The policy(ies) and receipts for every premium paid in
respect thereof shall be delivered and/or produced to the Bank without
demand.
( )
Legal opinion by a legal counsel in the country of domicile/incorporation of the
foreign *[Guarantor]/[Surety] [state name] [and your country of
domicile/incorporation].
[Provisions relating to properties/assets ]
( )
duly signed consent from prior mortgagee or chargee, where required.
OCBC Legal / Sep 09
8
( )
Evidence satisfactory to the Bank that the [state asset] are in good working
order.
( )
(where the asset] are located in premises not owned by you) Letter(s) of
consent(s) from landlords/owners of the premises in which the [state asset] or
any part thereof are placed, located or installed.
( )
(where the asset] are located in premises which are charged/mortgaged to
another
bank/others)
letter(s)
of
consent(s)
from
the
existing
chargees/mortgagees of the premises to exclude the [state asset] from the
existing [state existing security(ies) e.g. mortgage, debenture, charge etc].
[Provisions relating to guarantees]
( )
Form of Confirmation and Consent duly executed by the existing Guarantors
(where applicable).
[Accounts Receivables Financing]
( )
6.2
7.
The aggregate amount of receivables assigned to the Bank should not be less
than S$[ ] at any one time.
the following conditions being satisfied:(a)
There is no material adverse change in your financial condition, operating
environment, management or any other conditions which in the opinion of the
Bank will materially affect your ability to perform your obligations under this
Facility Letter.
(b)
There exists no event of default as set out in the Bank's Standard Terms and
Conditions Governing Banking Facilities or any other event which would, with the
giving of notice or passing or lapse of time and/or a relevant determination,
constitute an event of default.
(c)
All representations and warranties contained in this Facility Letter and in the
Bank's Standard Terms and Conditions Governing Banking Facilities have been
complied with and would be correct in all respects if repeated on the date of
advance, drawdown or availment of each of the Facilities by reference to the
circumstances then existing.
(d)
You shall provide any other document(s) as may be required by the Bank from
time to time and adhere to and abide by all other conditions precedent as the
Bank may in its absolute discretion impose.
(e)
A non-checking account has been opened with the Bank to receive the assigned
proceeds and earnings, where applicable.
AVAILABILITY/DRAWDOWN CONDITIONS
[Letters of Credit]
OCBC Legal / Sep 09
9
( )
Local Letters of Credit may not be issued to a related corporation
(as defined in the Companies Act) or your associate company or a corporation which is
under the control of any of your directors, shareholders or employees, unless prior
approval is obtained from the Bank.
[Draft Loans (Purchase)]
( )
Draft Loan (Purchase) shall be available against the presentation of the following:(a)
Invoice from supplier acceptable to the Bank.
(b)
Document(s) evidencing delivery/shipment of the underlying goods such as bill of
lading or airway bill or cargo receipt or courier receipt or delivery order.
(c)
Your written confirmation that you have not made any payment to the supplier
relating to the underlying financed transaction and there is no double financing.
( )
The proceeds drawn from Draft Loan (Purchase) shall be paid directly to the supplier.
( )
You shall not make a request for Draft loan (Import) where the supplier is a related
corporation (as defined in the Companies Act) or your associate company or the supplier
is under the control of any of your directors, shareholders or employees, unless prior
approval is obtained from the Bank.
( )
Tenor of Draft Loan (Purchase) (including suppliers’ credit) shall not exceed [v] days.
( )
Tenor of Draft Loan (Purchase) from disbursement date shall not exceed [v] days.
[Performance Bond(s), Bid Bond(s), Banker's Guarantee, Standby Letters of
Credit]
( )
The *[Performance Bond(s)]/[Bid Bond(s)]/[Banker's Guarantee]/[Standby Letters of
Credit] shall be in formats acceptable to the Bank.
8.
REPAYMENT
[List all repayment criteria applicable to the Facilities. Examples are set out below.]
[Overdraft]
( )
The Overdraft is subject to monthly or such other periodic interest servicing as the Bank
may specify and is repayable on demand.
( )
The Overdraft limit is to be reduced by [ ] *[monthly/quarterly/semi-annual]
instalments of S$[ ] each starting from [state date], until the *[Overdraft limit is at
S$[ ]]/[Overdraft is fully repaid].
Notwithstanding the above, the above reduction schedule shall always be subject to
review at the Bank’s absolute discretion. The Bank shall have the right and shall be
entitled to cancel and demand repayment of the outstanding Overdraft Facility at any
time by notice to you in writing.
OCBC Legal / Sep 09
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( )
The Overdraft is subject to monthly or such other periodic interest servicing as the
Bank may specify and is repayable on demand. The Overdraft limit is to be reduced
as follows :
Date
Amount of Reduction
xxx
yyy
Notwithstanding the above, the above reduction schedule shall always be subject to
review at the Bank’s absolute discretion. The Bank shall have the right and shall be
entitled to cancel and demand repayment of the outstanding Overdraft Facility at any
time by notice to you in writing.
9.
FEES
[State fee(s) if applicable. Examples are set out below]]
Front-end / Facility Fees
( )
A non-refundable front-end fee of S$[ ] shall be payable to the Bank upon acceptance
of this Facility Letter.
Cancellation Fees
[ general ]
( )
A cancellation fee of [ ]% flat will be charged if any of the Facilities are not disbursed
by the end of the availability period and shall be payable on [state date/period] .
( )
Other Fees
All out-of-pocket expenses (including legal fees and goods and services tax) incurred in
connection with the preparation, execution and delivery of the Facility Agreement or
Term Loan Agreement (where applicable) and related documentation shall be for your
account. Further, if upon acceptance of this Facility Letter, the Facilities are aborted for
any reason whatsoever or if you subsequently decide not to proceed with the Facilities,
you shall in addition pay an abortive fee of [ ]% flat of the limit of the Facilities to the
Bank.
10.
DEFAULT INTEREST
[State applicable default interest. Example set out below.]
Default interest shall be payable at the rate of [ ]% p.a. over the Bank’s *[prime
lending rate]/[Cost of Funds]/[Swap Offer Rate] prevailing from time to time for
financing in Singapore Dollars and [ ]% p.a. over *[SIBOR/foreign currency prime] for
financing in foreign currencies or such other rates as may be determined by the Bank in
its absolute discretion on the following:-
(a)
any part of the Facilities that is not paid on due date or upon demand, as the case may
be; and
OCBC Legal / Sep 09
11
(b)
any utilisation in excess of the approved limit of the Facilities.
11.
TOP UP CLAUSE
(a)
Without prejudice to Clause 13 of the Bank's Standard Terms and Conditions
Governing Banking Facilities, the total outstanding or the limit of [state type of facility]
shall not at any time exceed [ ]% of the market value of the [state asset], otherwise
you will have to top up by providing additional collateral acceptable to the Bank and/or
reduce the outstanding or facility limit within such period as the Bank may in its
absolute discretion determine and notify to you.
(b)
The Bank may in its absolute discretion value the [state asset] and any other securities
held by the Bank and it reserves the right to call for valuation thereof at any time and
such valuation shall be final and conclusive. All expenses, fees and charges incurred
shall be borne by you.
12.
FINANCIAL COVENANTS
[List applicable financial covenants. Examples set out below.]
( )
Your paid up capital is to be increased to at least S$[ ] prior to disbursement of the
Facilities.
( )
Your networth is to be maintained at not less than S$[ ] *[upon completion of the
development]. Networth is defined as the sum of your paid-up capital and retained
earnings.
( )
Your gearing is to be maintained at below [ ]% at all times.
( )
Your total liabilities to tangible networth *[on a consolidated basis] shall be less than
[ ]% at all times.
( )
No dividends are to be paid to shareholders without the Bank's prior written consent.
( )
*[Directors', shareholders' and related corporations’ loans of at least S$[ ]]/[All
directors’, shareholders’ and related corporations’ loans] shall be subordinated to the
Facilities from the Bank and any repayment thereof would require the Bank's consent.
13
OTHER COVENANTS
14
OTHER TERMS AND CONDITIONS
[List the terms and conditions applicable to the Facilities. E.g. are set out below.]
[Facilities secured on a mortgage over property]
( )
(Where security given is an Assignment of Rental *[and Sale] Proceeds). You are to
furnish to the Bank copies of all tenancy *[and sale] agreements. *[All rental income
*[and sale proceeds] shall be credited into the account specified by the Bank.]
OCBC Legal / Sep 09
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( )
You shall observe and perform all terms, covenants, stipulations and conditions on
your part to be performed and observed in relation to the Property, including without
limitation, the terms, covenants, stipulations and conditions contained in the Building
Agreement, Lease, Agreement for Lease and/or Sale and Purchase Agreement in
respect of the Property.
OR
( )
You shall observe and perform and shall ensure and procure that [name of mortgagor]
(“the Mortgagor”) performs and observes all terms, covenants, stipulations and
conditions on your or the Mortgagor’s part to be performed and observed in relation to
the Property, including without limitation, the terms, covenants, stipulations and
conditions contained in the Building Agreement, Lease, Agreement for Lease and/or
Sale and Purchase Agreement in respect of the Property.
[Clauses relating to trade facilities]
( )
Combined tenor for usance Letters of Credit and Trust Receipts Financing shall not
exceed [ ] days or such other period as notified by the Bank to you.
[clauses relating to contract financing]
( )
All security and legal documentation must be completed within [v] months from letter of
award or [v] month(s) after the execution of the main contract between you and [name
of Project Owner], whichever is earlier.
( )
You shall submit to the Bank the Project’s accumulative progress claims schedule
within 3 months from the date of disbursement of the Facilities for Accounts
Receivables Financing.
( )
The [state Facilities] shall be cancelled upon completion of [v] % of the Project or
[specify date] whichever is earlier.
( )
You undertake to arrange for all GIRO / Irrevocable payment instructions from you to
[name of Project Owner] for the progress claims from the Project to be credited into
your existing non-checking account [v] with the Bank.
( )
You shall use proceeds from progress claims of the Project credited to your nonchecking account with the Bank [to repay any outstanding import loans due under [type
of facility].
( )
You shall submit to the Bank the progress report on the Project on a monthly basis.
You shall, unless otherwise agreed to by the Bank, maintain at least one operating account with
the Bank for the day-to-day operation of your business for so long as any sum remains owing
under the Facilities. You agree that the volume of your transactions including FX spot, forward
and derivative transactions and Interest Rate swap and derivative transactions with the Bank
would reasonably correspond with the utilization of the Facilities as well as the level and nature
of your business activities.
To the extent that the same are not inconsistent with the express terms herein, the Bank's
OCBC Legal / Sep 09
13
Standard Terms and Conditions Governing Banking Facilities and any amendments,
supplements or replacements thereto from time to time shall form part of and be deemed to be
incorporated in this offer.
[This Facility Letter when accepted will supersede the Bank’s previous letter(s) of offer to you.]
The Bank reserves the right to request you, from time to time, to furnish it with documentary
evidence (in form and substance acceptable to the Bank) showing your compliance with all the
terms and conditions required by the Bank and to execute any further document(s) deemed
necessary by the Bank.
We trust that the above terms and conditions are acceptable to you. This offer will lapse after
[ ] days from the date of this Facility Letter, unless otherwise arranged.
Please signify your acceptance by signing and returning to us the duplicate copy of this Facility
Letter *[together with a certified copy of your Board *[and Shareholders'] Resolution(s) in the
form attached].
We are pleased to be of service to you and look forward to hearing from you in due course.
Yours faithfully
for OVERSEA-CHINESE BANKING CORPORATION LIMITED
......................................................................
We hereby accept the Facilities on the terms and conditions contained in this Facility Letter and
in the Standard Terms and Conditions Governing Banking Facilities.
......................................................................
For and on behalf of [Name of Borrower]
Name of Authorised Signatory(ies):
Date:
OCBC Legal / Sep 09