FACILITY LETTER
PAWNSHOP 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$[] subject to the following terms and conditions and
the Standard Terms and Conditions Governing Banking Facilities:1.
LIMITS/QUANTUM
[New] Limit
( )
Overdraft
S$ [
]
( )
Specific Advance Facility
(Tenor: up to [v] years)
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
( )
Overdraft
: For working capital requirements
( )
Specific Advance Facility
: [state purpose for which the SAF is granted ]
3.
PRICING
( )
Overdraft
: []% p.a. over the Bank's prevailing prime lending rate
calculated on daily balance with monthly rests.
( )
Specific Advance
Facility
: FOR SINGAPORE DOLLARS
[cost of funds]
OCBC Legal / Sep 09
Our Ref:
<Company Name>
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PRIVATE & CONFIDENTIAL
[]% p.a. over the Bank's prevailing Cost of Funds for
interest periods of *[1, 2, 3, 6, 9 & 12 months] at the
Borrower’s option.
[or]
[swap offer rate]
[]% p.a. over the Bank's prevailing Swap Offer Rate as
determined by the Bank for interest periods of *[1, 2, 3, 6, 9
& 12 months] or such other interest periods at may be
agreed by the Bank.
[or]
At the prevailing market rate as determined by the Bank
The Bank’s current prime 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
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.
[For SAF]
If, in relation to the SAF advance, the Bank is unable to determine the *[Swap Offer
Rate]/ [SIBOR] by 11.00 a.m. then the rate of interest applicable to that advance for that
interest period shall be determined by the Bank in consultation with the Borrower.
( )
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].
Guarantee
( )
*[Existing] Deed of Guarantee and Indemnity for *S$[] / [all monies] from [insert name
of guarantor].
OCBC Legal / Sep 09
Our Ref:
<Company Name>
<Page no.>
PRIVATE & CONFIDENTIAL
( )
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.
( )
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.
( )
SPECIFIC ADVANCE FACILITY
Availability/drawdown:
( )
Subject to the availability of funds to the Bank the Specific Advance Facility (“SAF”) will
be available for drawdown by you from time to time on a revolving basis provided always
that at any one time the aggregate principal sum of all advances made under the SAF
and remaining unpaid shall not exceed the SAF limit applicable at that time.
( )
Subject to the Bank's absolute discretion to permit otherwise:(a)
Each advance from the SAF shall be of an amount of not less than S$[] and of
integral multiples of S$[].
(b)
The duration of each interest period shall be *[1], *[2], *[3], *[6], *[9] or *[12]
months as notified to the Bank in your Notice of Drawing relating thereto. You
shall select such interest periods as which shall enable you to comply with your
obligations under this Facility Letter.
(c)
Each interest period shall start on the last day of the preceding such period and
the first interest period shall begin on the date of the first advance.
(d)
The Notice of Drawing under the SAF:-
OCBC Legal / Sep 09
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<Company Name>
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PRIVATE & CONFIDENTIAL
(i)
subject to the Bank's absolute discretion to permit otherwise, shall be
given by you to the Bank not later than 11.00 a.m. on the third Business
Day prior to the intended date of advance;
(ii)
must specify a proposed date of the advance which is a Business Day;
and
(iii)
must be in writing in the form attached to this Facility Letter and shall be
irrevocable and binding on you.
(e)
If you fail to give the Notice of Drawing in accordance with paragraphs (b) and
(d) above, the interest period shall, subject to the other provisions of this Clause,
be 1 month.
(f)
Any interest period which would otherwise end on a non-Business Day shall end
on the next Business Day in that calendar month if there is one, or if there is not,
on the immediately preceding Business Day.
(g)
You shall not be entitled to prepay (whether in whole or part) any advance before
the last day of the interest period.
Repayment:
( )
The SAF is repayable on demand. Without prejudice to the aforesaid, each advance
with interest thereon shall be repaid on its due date or rolled over at the Bank’s
absolute discretion *[save for interest periods of [e.g. 6, 9 & 12] months wherein
interest shall be paid on a [ ] basis.
( )
Amounts drawn under the SAF can only be repaid and/or redrawn on its due date.
( )
The SAF is subject to the following reduction schedule:
Date
Reduction Amount
xx
yy
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 SAF at any time by notice
to you in writing.
( )
AVAILABILITY PERIOD
[Others]
( )
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.
OCBC Legal / Sep 09
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<Company Name>
( )
<Page no.>
PRIVATE & CONFIDENTIAL
FEES
[State fee(s) if applicable. Examples are set out below]]
Front-end / Facility Fees
( )
A non-refundable front-end fee of S$[] shall be payable to the Bank upon acceptance of
this Facility Letter.
( )
A non-refundable facility fee of S$[] shall be payable to the Bank upon drawdown of the
Specific Advance Facility.
Cancellation Fees
( )
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 the 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.
( )
FINANCIAL COVENANTS
[List applicable financial covenants. Examples set out below.]
( )
You shall increase your paid up capital to at least S$[] prior to disbursement of the
Facilities.
( )
You shall maintain your networth at not less than S$[] *[at all times]/[upon completion of
the development]. Networth is defined as the sum of your paid-up capital and retained
earnings.
( )
You shall maintain your gearing at below []% at all times. Gearing is defined as the ratio
of debt to debt plus equity.
( )
You shall maintain your total liabilities to tangible networth *[on a consolidated basis] at
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.
OCBC Legal / Sep 09
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<Company Name>
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PRIVATE & CONFIDENTIAL
( )
OTHER COVENANTS
( )
OTHER TERMS AND CONDITIONS
(a)
You shall submit to the Bank a copy of your Monthly Return to the Registrar of
Pawnbrokers on Pawnbroking Business within 14 days of your submission to the
Registrar of Pawnbrokers of the same.
(b)
You shall permit a regular inspection to be undertaken at your pawnshop and your
pawn articles, which shall be conducted by an inspector appointed by the Bank.
(c)
The total credit limit of the Facilities shall not exceed [v]% of the value of [pledged
stocks][state security], as determined by the Bank based on your Monthly Return to the
Registrar of Pawnbrokers on Pawnbroking Business, at any time.
( )
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:
( )
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)
A copy of your Pawn Broking Licence.
( )
Form for appointment of process agent duly executed (where applicable).
( )
Spousal Consent duly executed (where applicable).
( )
Statement Containing Particulars of Charge in respect of the relevant security
documents for filing with the Accounting and Corporate Regulatory Authority.
( )
All insurance policies and assignments required by the Bank.
OCBC Legal / Sep 09
Our Ref:
<Company Name>
<Page no.>
PRIVATE & CONFIDENTIAL
( )
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].
( )
Form of Confirmation and Consent duly executed by the existing third party
mortgagor/chargor (where applicable).
[Provisions relating to properties/assets]
( )
All title deeds and documents relating to the Property.
( )
Evidence satisfactory to the Bank that the title to the Property is in order and that
there are no defects, legal, structural or otherwise, in or affecting the Property
and that the Property is acceptable to the Bank, in its absolute discretion, in all
respects as security for the Facilities granted to you.
( )
Satisfactory replies to all title/legal requisitions relating to the Property and all
other searches as may be applicable and required by the Bank in connection
with the Facilities.
( )
A valuation report from a valuer approved by the Bank stating that the market
value of the [state asset] is not less than S$[].
( )
Evidence satisfactory to the Bank that all stamp fees, goods and services tax,
value added or other similar taxes or fees payable in respect of the purchase
and/or mortgage of the Property have been fully paid or have been
earmarked/set-aside in such manner as the Bank may, in its absolute discretion,
deem fit.
( )
(where the Property is leased from the JTC, HDB, URA or other authority)
Approval(s) from the relevant authority(ies) to the mortgage of the Property to the
Bank.
( )
Duly signed consent from prior mortgagee or chargee, where required.
( )
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.
OCBC Legal / Sep 09
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<Company Name>
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PRIVATE & CONFIDENTIAL
(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).
The following conditions being satisfied:[General provisions]
(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.
( )
BREAKFUNDING COSTS
( )
If you fail to effect drawdown in respect of the [state type of facility], or satisfy the
conditions for advance after the Notice of Drawing has been given by you, in addition to
the other remedies of the Bank hereunder, you shall on demand, pay to the Bank such
amount as the Bank may certify as necessary to compensate it for any costs incurred by
the Bank resulting from your failure to effect the drawdown or a failure to satisfy the
conditions for the advance, including but not limited to losses from re-employment of
funds borrowed or contracted for to fund the advance at rates lower than the cost of
such funds.
( )
In addition to the prepayment fee and/or cancellation fee in respect of the [state type of
facility], any break funding costs incurred by the Bank, to be determined by the Bank in
its sole discretion, in respect of any amount prepaid before its original due date or in
unwinding its funding prematurely shall be borne by you notwithstanding that the
prepayment or full settlement before the maturity of the loan(s) is requested by the
Bank.
OCBC Legal / Sep 09
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<Company Name>
( )
<Page no.>
PRIVATE & CONFIDENTIAL
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 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
(b)
any utilisation in excess of the approved limit of the Facilities.
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
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.
OCBC Legal / Sep 09
Our Ref:
<Company Name>
......................................................................
For and on behalf of [Name of Borrower]
Name of Authorised Signatory(ies):
Date:
OCBC Legal / Sep 09
<Page no.>
PRIVATE & CONFIDENTIAL
Our Ref:
<Company Name>
<Page no.>
PRIVATE & CONFIDENTIAL
[On Borrower’s Corporation Letterhead]
FORM OF NOTICE OF DRAWING
OVERSEA-CHINESE BANKING CORPORATION LIMITED
65 Chulia Street
OCBC Centre
Singapore 049513
Date:
Dear Sirs
NOTICE OF DRAWING
SPECIFIC ADVANCE FACILITY OF S$[]
Pursuant to Clause [] of the Facility Letter dated _____________________________ (“Facility
Letter”) in respect of the above Specific Advance Facility, we hereby give you notice that we
request a drawing under the said facility to be made to us under the Facility Letter on the
following terms:(a)
(b)
(c)
Amount
Proposed Drawing Date
Interest/Loan Period
:
:
:
*(1), (2), (3), (6), (9), (12) months
The proceeds of this drawing are to be made available to us by [specify mode of
disbursements].
We confirm:(i)
that the conditions precedent under the Facility Letter and the Bank's Standard Terms
and Conditions Governing Banking Facilities have been complied with in every respect;
(ii)
that each of the representations and warranties contained in the Facility Letter and the
Bank's Standard Terms and Conditions Governing Banking Facilities are true and
accurate in all respects as though made on the date of this request;
(iii)
that all the covenants on our part contained in the Facility Letter and the Bank's
Standard Terms and Conditions Governing Banking Facilities have been fully performed
and observed by us; and
(iv)
that as at the date hereof no event of default as set out in the Facility Letter and the
Bank's Standard Terms and Conditions Governing Banking Facilities (“Event of Default”)
has occurred and no event has occurred which, with the giving of notice and/or the lapse
of time and/or upon your making any necessary certification and/or determination under
the Facility Letter and the Bank's Standard Terms and Conditions Governing Banking
Facilities, might constitute an Event of Default. We further represent warrant and
undertake that no Event of Default and none of the events aforesaid will exist at the date
of the intended drawdown.
By:
______________________
Authorised Signatory
OCBC Legal / Sep 09