Annexure

SMALL BUSINESS LOAN (“SBL”)

INSTRUCTIONS TO OUTSIDE COUNSEL

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1.SEARCHES ON BORROWER / CHARGOR /MORTGAGOR / GUARANTOR / VENDOR (WHERE MORTGAGED PROPERTY (IF HDB PROPERTY) IS NOT PURCHASED DIRECTLY FROM THE HOUSING AND DEVELOPMENT BOARD)

The Bank requires:-

  • the relevant winding-up / judicial management / writ of seizure & sale / Cause Book searches both in High Courts and Subordinate Courts bankruptcy searches to be conducted. For judicial management and writ of seizure & sale searches, the Bank requires these to be conducted for the last two years in the relevant courts;
  • your investigation and confirmation whether there is any negative pledge(s) given by the chargor/mortgagor. If there is a negative pledge(s), the requisite consent(s) and waiver(s) must be obtained. If there is no negative pledge(s), the Bank requires the chargor’s/mortgagor’s confirmation that the chargor/mortgagor has not given any negative pledge(s) in respect of any of the chargor’s/mortgagor’s assets which are to be pledged to the Bank.

2. LODGEMENT OF BANK’S CAVEAT

A caveat against the property to be mortgaged to the Bank (Mortgaged Property) must be filed on the Bank’s behalf immediately upon receipt of our letter of instructions (if the mortgage is not already lodged). The registration particulars thereof are to be advised to the Bank forthwith. You are required to renew the said caveat prior to expiry of the same unless the mortgage has been duly registered.

3. TITLE SEARCHES, LEGAL REQUISITIONS, ROAD & DRAINAGE PLANS

Title Search

A title search shall be conducted immediately after you have received the Bank’s instructions on the

matter and shall be updated on the day of the credit facility implementation or disbursement.

Other Searches

The following searches shall be conducted:

(a) Borrowers and mortgagors/guarantors/other 3rd party security providers:

defendant cause book search in both the High Court and Subordinate Court for the last 2 years and

bankruptcy search (if an individual) or winding-up and judicial management search (if a corporation);

and

(b) Vendor (except for a licensed developer): bankruptcy search (if an individual)/ winding-up search (if

a corporation)

All searches above shall be conducted immediately after you have received the Bank’s instructions on the

matter and (except for cause book searches) shall be updated on the day of the credit facility implementation or disbursement.

Legal Requisitions

Unless otherwise instructed by the Bank, you shall promptly send legal requisitions to the following authorities:

(a) Urban Redevelopment Authority;

(b) Land Transport Authority, Survey and Land Department (Rapid Transit System);

(c) Land Transport Authority, Survey and Land Department (Street Works);

(d) Inland Revenue Authority of Singapore;

(e) Building and Construction Authority;

(f) National Environment Agency, Environmental Health Department; and

(g) Public Utilities Board, Sewerage Department

Unless otherwise instructed by the Bank, you shall promptly obtain the following plans from the relevant authorities:

(a) Land Transport Authority (Road Interpretation Plan); and

(b) National Environment Agency (Drainage Interpretation Plan)

(The drainage interpretation plan is not required if the Mortgaged Property appears in the Schedule to

Government Gazette No. 3553 of 1995. )

If the Mortgaged Property is affected by any scheme or plan, please forward a copy of the plan to the

Bank’s valuer and the valuer’s comments/replies (where applicable) to SBL at least 7 working days

before any disbursement of the credit facility.

Your confirmation that the Mortgaged Property is not affected by compulsory acquisition

Your confirmation that the property is not subjected to Control of Rent Act

In particular, please note:

  • The requisite information or report on structure or structural stability pursuant to Section 28 of the Building Control Act must be obtained if Form BC4 indicates that Orders have been served under Sections 13, 23 or 24 of the Building Control Act or that the Mortgaged Property is still under investigation.
  • If the reply from IRAS shows that there is any outstanding property tax, please confirm that the same will be paid upon completion OR let us have a confirmation that Payment is through GIRO.

Management Corporation

If the Mortgaged Property is a flat or a strata unit, you shall obtain a certificate from the Management

Corporation certifying whether there are any monies and interest owing to the Management Corporation

in respect of the Mortgaged Property.

Advice On Title

If there is any defect in the title or if the Mortgaged Property is encumbered (and such encumbrance will

not be removed before the registration of the mortgage) or subject to restrictive covenants or if any of the

searches or replies to legal requisitions or interpretation plans are not satisfactory, we will require your

considered opinion and advice whether the Bank should proceed with the mortgage, with or without

variation in the terms of our Letter of Offer, or whether the Bank may abort the financing.

Your Report on Title must be given to the Bank in the Bank’s standard form Report on Title

Please note that legal requisitions are not required for HDB shop units mortgaged to the Bank.

4.REQUISITE PRIOR CONSENTS

(i)THE RESIDENTIAL PROPERTY ACT (CAP. 274)

Where the Mortgaged Property is a “residential property” within the meaning of the Residential Property Act (Cap. 274), requisite approval from the relevant authority must be obtained and furnished to the Bank for the purchase / retention of the Mortgaged Property.

(ii)GOVERNMENT DEPARTMENTS/ STATUTORY BOARDS

Requisite consents to mortgage the Mortgaged Property must be obtained and furnished to the Bank where the lessor is the Housing & Development Board, Jurong Town Corporation, Urban Redevelopment Authority or any other relevant party.

5. DIRECTORS’ RESOLUTIONS

The Bank requires Directors’ resolution for Borrower / chargor / mortgagor /assignor/ guarantor/ subordinated lender (where applicable) to be obtained, where necessary.

6. SHAREHOLDERS’ RESOLUTIONS

The Bank requires the chargor’s / mortgagor’s confirmation that the deposits / security / property to be charged / mortgaged to the Bank is not the whole or substantially the whole of the chargor’s / mortgagor’s assets. Without such a confirmation, the Bank requires evidence of the shareholders’ resolutions authorising the creation of the relevant charge / mortgage.

Further (where applicable), where the security provider is not the Borrower and the issue of corporate benefit is not apparent, shareholders’ resolutions are required to be obtained.

Please verify that the shareholders’ resolutions (form and content) have been passed appropriately.

7. CPF UTILISATION (where applicable)

Where CPF funds will be used, please note that the Bank shall have the first charge over the Mortgaged Property. You are required to let us have a copy of the CPF Board’s Letter of Approval at least 7 days before the first disbursement and also to ensure that you have given sufficient notice to CPF Board for CPF monies to be released for the servicing of the monthly instalments. Please highlight to us if the amounts or purposes of withdrawal as approved by the CPF Board are inconsistent with those approved by us in our Letter of Offer immediately upon your receipt of the CPF Board’s letter.

For Refinancing cases, please let us have a copy of the CPF Board’s Letter of Consent and either one of the following documents at least 7 days before the first disbursement: -

  • the latest CPF Withdrawal Statement; or
  • your written confirmation as to the latest update on the CPF amount withdrawn thus far.

The word “latest” in the above context shall mean a date which is not earlier than 1 month from the proposed disbursement date.

Please also let us have a copy of the updated Redemption Statement. You are to ensure that, where applicable, the loan amount disbursed by us will be accorded the usual CPF ranking.

8. GUARANTEE

Where applicable, we have enclosed our standard Deed of Guarantee and Indemnity to be duly executed by the guarantor(s) for your necessary action. A personal guarantor’s execution of the Deed of Guarantee & Indemnity must be witnessed by a solicitor. The company registration/NRIC particulars of the guarantor(s) must be set out.

9. ASSIGNMENT OF RENTAL / SALE PROCEEDS

The Bank requires, before the first disbursement, (i) confirmation that the Assignment of Rental/Sale Proceeds has been duly executed (ii) where applicable,a copy of the requisite Notice of Assignment to the tenant(s)/ purchaser(s) as well as the duly signed Acknowledgement of Notice.

The Bank requires, within 4 weeks after the first disbursement, confirmation that the Assignment of Rental/Sale Proceeds have been duly stamped and the original Assignment of Rental/Sale Proceeds (which has been duly stamped) shall be delivered to the Bank.

10. DEED OF SUBORDINATION

The document must be complete and dated.

11.SECURITY DOCUMENTATION FOR :

(i)FIXED DEPOSIT

(a) Charge Of Cash Security Agreement (First Party) /

(b) Charge Of Cash Security Agreement (Third Party) /

(c) Letter Of Set-Off (First Party) /

(d) Letter Of Set-Off & Guarantee (Third Party)

Please ensure that the particulars of the Borrower / chargor / depositor are accurately set out. The document(s) must be complete and dated.

(ii)SECURITIES

(a) Memorandum Of Charge / Assignment (First Party) /

(b) Memorandum Of Charge / Assignment (Third Party)

Please ensure that the particulars of the Borrower / chargor / depositor are accurately set out. The document(s) must be complete and dated.

12. SPOUSAL CONSENT

The Bank requires spousal consent(s) from the spouse of any Indonesian, Thai or Myanmese / guarantor / chargor / mortgagor/ subordinated lender.

13. DOCUMENTATION EXECUTED OVERSEAS

If any document is signed by the mortgagor(s)/borrower(s)/Guarantor(s) outside ofSingapore, the execution must be witnessed by a Notary Public and duly legalized by theSingapore Embassy in the jurisdiction where the execution took place, with the exception ofdocuments executed and witnessed by a Notary Public in South Korea or a Commonwealthcountry;

14. LEGAL OPINION (IF REQUIRED)

A legal opinion on the validity and enforceability of any loan or security document under foreign laws is required if such loan or security document is executed by a foreign party. In this regard, the minimum legal opinions we require that you obtain are stated below. It is entirely your responsibility to ensure that any foreign legal opinion obtained contains any further opinions and/or recommends any further action to be taken or noted to ensure the compliance by the Bank with all applicable laws and to safeguard the rights and interests of the Bank in all respects.

(1)Whether the Security Provider has the capacity and power to execute the Security Document and (if a corporation) validly exists under the laws of its country.

(2)(Where the Security Provider is a corporation) whether its directors resolutions have been duly certified by their director/secretary in accordance with its constitution and bye-laws.

(3) Whether the Security Provider is required to obtain any authorisation, exemption of licence from or to file any registration with any authority in its country or make any payment of stamp duty in connection with the Security Document.

(4) Whether the execution of the Security Document will contravene any applicable laws or regulations of its country or (if a corporation) under its constitution and bye-laws.

(5) The choice of Singapore law which governs the duties and obligations of the Security Provider under the Security Document is valid under the laws of its country and would be given effect by the courts of its country.

(6) The submission of the Security Provider to the laws and jurisdiction of Singapore courts is valid and binding on the Security Provider under the laws of its country and any judgement obtained against the Security Provider in the courts of Singapore will be recognised and enforced by the courts of its country without re-examination or litigation.

(7) The Security Provider and its assets are not subject to any political immunity from legal proceedings or judgment.

(8) The Bank is not required to carry on business or be licensed in the country of the Security Provider for the Bank to enforce its rights under the Security Document.

(9) There are no winding up or liquidation proceedings commenced against the Security Provider.

15.MULTIPLE REPRESENTATION

Where you have been retained or have accepted instructions to act for more than one party to a transaction where a diversity of interests exists between the parties, it is your responsibility to determine how you are best able to discharge your duties including to disclose the multiple representation and all material facts relating to the parties and to the transaction. We require your confirmation (in the form as set out in our Report On Title) that you have advised each of the party providing security and/or support for this transaction about the nature, effect and consequences of the transaction including that the Bank is fully entitled to enforce its legal rights in accordance with the terms and conditions of the security furnished.

16.EXECUTION OF SECURITY DOCUMENTATION

Please ensure that

(i)ALL documents are executed by the Borrower / chargor / mortgagor / guarantor before a solicitor;

(ii)the parties are properly identified;

(iii)the relevant seal(s) are affixed in respect of the parties’ execution thereof; and

(iv)there are no amendments made to the documents with the use of correction liquid and all

typographical amendments must be duly initialled against by the Borrower / chargor / mortgagor

/ guarantor; and

When forwarding to SBL the engrossed security documentation for execution, the Bank requires:-

(a)your written confirmation that

  • all the security documentation are complete, accurate, in order and commercially reflect the full terms and documentation requirements of the account with respect to the Bank’s proposed disbursement / activation of the credit facilities;

We require at least 7 working days for execution and return of the documents. Please arrange to

collect the executed documents from us thereafter. The Bank will cease to notify law firms on the

collection of the executed documents.All mortgage and security or related documents for execution must be forwarded to the Bank under coverof the Bank’s standard form Execution of Legal Documents (Mortgage).

(b)documents with regard to the Borrower / chargor / mortgagor / guarantor

  • directors’ resolutions / shareholders’ resolutions (where applicable);
  • Certificate(s) of Incorporation;
  • Memorandum and Articles of Association;
  • Accounting & Corporate Regulatory Authority’s search papers;
  • duly executed spousal consent(s) (where applicable);
  • copies of the Sale and Purchase Agreement / Option to Purchase (in escrow matters), the Certificate of Title (where title has been issued) and any other documents of title;
  • where the mortgage is an all monies open mortgage and the Mortgagor and the Borrower is not the same party, copy of the executed Third Party Letter of Consent;

17. POWER OF ATTORNEY

You are to confirm and highlight to the Bank (where applicable) that the attorney(s) appointed pursuant to

the relevant Power of Attorney is authorised to act on behalf of the mortgagor(s)/ borrower(s)/guarantor(s)/third party security provider(s) (as the case may be) on the purchase, borrowing or such other transaction to which the Power of Attorney relates before any disbursement of the credit facility.

18. NOTICE OF CHARGE WITH ACCOUNTING & CORPORATE REGULATORY AUTHORITY (ACRA)

Please ensure that these are filed in respect of the relevant charge(s) / mortgage/ assignment / Subordination within the stipulated time-frame and send a copy of ACRA’s email confirmation that the charge has been filed to the Bank forthwith for record.

19. COMMUNICATION

(i)All correspondence by you on any proposed changes to template(s), conditions precedent for proposed disbursement / activation of the credit facilities and completion should be addressed and sent to the respective officers in charge in SBL.

(iii)All documents for execution by the Bank should be addressed and sent to and sent to the respective officers in charge in SBL

(iv)As far as possible, you are to use the Bank’s templates. Where it is not commercially possible to use the Bank’s templates, you are to draft the relevant document.

(v)Where the Bank’s templates are used, you are required to provide a written summary of changes you have made to the Bank’s templates which may have an adverse effect on the Bank’s interests or which deviate from the Bank's requirements or conditions in the Facility Letter. This summary shall be sent together with the engrossed document for execution.

(vi) Please send all original security documents and title deeds collectively, instead of on a piecemeal basis, for better coordination and records, to the SBLat 105 Cecil Street #14-00 The Octagon Singapore 069534 for their safekeeping immediately after execution and if necessary, registration.

20.DISBURSEMENT

SBL requires at least 7 working days for each disbursement / drawdown of the Loan or part thereof.

Prior to the disbursement / implementation of the Loan or part thereof, you shall: -

  • ensure that it is in order to disburse or implement the Loan or part thereof;
  • ensure that the amount requested for disbursement is correct, and where applicable, such amount will be used in accordance with the respective purposes specified in our Letter of Offer (in the case of purchase, such amount shall be paid directly to the vendor on completion or progressively against the relevant architect’s certificates, as the case may be, and if the Mortgaged Property is subject to an existing mortgage which mortgage shall be discharged on completion, such amount shall be paid directly to the existing mortgagee);
  • ensure that all pre-conditions to disbursement (whether general or specific)as stipulated in the Bank’s letter of offer and/or otherwise advised by us from time to time prior to disbursement have been fulfilled;

If the Loan or part thereof is to be used to finance the purchase of the Mortgaged Property, please ensure that the difference between the purchase price and the Loan is actually paid or will be paid by the Borrower / Mortgagor on or before our first disbursement. SBL is entitled to regard your written instruction/ advice to disburse the Loan or part thereof as your confirmation that this condition has been fulfilled to your satisfaction for purposes of disbursing the Loan or part thereof.