Exhibit 10.13
SJPP
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STRICTLY PRIVATE & CONFIDENTIAL
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Ref No.: GCA/COMM-C5/TPY/23/288/LO
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4 July 2023
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KAINAN SDN BHD (“Borrower”)
No.20-2F, Jalan Setia Perdana BF U13/BF,
Seksyen U13,
Bandar Setia Alam,
40170 Shah Alam,
Selangor.
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Dear Sirs,
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Re: CREDIT FACILITIES
We are pleased to offer the following Credit Facilities subject to the terms and conditions stated herein:-
| CREDIT FACILITIES | AMOUNT (RM) | |||
| Overdraft | 1,000,000-00 | |||
| Term Loan | 643,000-00 | |||
| Promissory Note | 4,000,000-00 | |||
| Total | 5,643,000-00 |
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| 1. | Overdraft (“OD”) under Pemulih Government Guarantee Scheme guaranteed by Syarikat Jaminan Pembiayaan Perniagaan Berhad (“SJPP”) |
Limit: RM1,000,000-00 Only.
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Purpose
To finance your working capital requirements.
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Interest Rate
Base Lending Rate (“BLR”) + 1.00% per annum (“p.a.”)
The above rate is subject to a minimum rate of 2.75% p.a. at all times.
(Presently our BLR is 6.67% p.a.)
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Availability of OD
Subject to periodic review.
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Repayment
Payable on demand.
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Additional Interest on Excesses
1.00% p.a. above the prescribed rate on any OD excesses.
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| Alliance Bank Malaysia Berhad 198201008390 (88103-W) | ||
| Menara Multi-Purpose | Customer Service 603.5516 9988 | |
| Capital Square, 8 Jalan Munshi Abdullah | ||
| 50100 Kuala Lumpur, Malaysia. | ||
| www.alliancebank.com.my |
| Ref No. : | GCA/COMM-C5/TPY/23/288/LO |
| Name : | Kainan Sdn Bhd |
Commitment Fee
1.00% p.a. on unutilised portion of the OD facility.
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Default Rate
At 1.00% p.a. above the prescribed rate on the entire outstanding sum in the event the facility is recalled or terminated.
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| 2. | Term Loan (“TL”) |
Limit: RM643,000-00 Only.
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Purpose
To finance the insurance premium for Dato’ Whitney Tan Ann Nee.
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Tenure
Up to 60 months.
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Interest Rate
BLR + 1.00% p.a.
The above rate is subject to a minimum rate of 2.75% p.a. at all times.
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Interest on Late Payment
1.00% p.a. above the prescribed rate on any portion of principal and/or interest that is overdue subject always to a minimum charge of RM5-00.
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Availability Period
Availability of the TL is up to 6 months from the date of this Letter of Offer. Any amount undrawn at the end of the Availability Period shall be deemed as cancelled and any extension of the Availability Period shall be at the sole discretion of the Bank.
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Mode of Drawdown
In one lump sum to the Bank’s appointed insurer as per the Letter of Acceptance or up to RM643,000-00, whichever is lower. Any remaining balance shall be cancelled.
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Repayment
The TL shall be repayable by 60 monthly instalments of RM12,937-00 each (inclusive of interest) until the TL is fully settled and satisfied. For the avoidance of doubt, the last instalment may be varied to incorporate any shortfall arising from variations in interest rate during the TL tenure.
The first instalment is to commence on the first day of the following month if full drawdown is on or before 15th of the month, or on the first day of the month following next if full disbursement is after the 15th of the month.
In the event of any variation in the TL tenure, limit and/or interest rate, the Bank reserves the right to vary the instalment amount accordingly and/or to vary the amount of the last instalment only accordingly.
Interest is to be serviced monthly in arrears pending full drawdown.
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Prepayment
Prepayment is allowed subject to three (3) months’ prior written notice or payment of three (3) months’ interest in lieu of the required notice. In addition, a prepayment fee of 1.00% flat shall be charged on the amount prepaid. All prepayments shall be applied in the inverse order of maturity.
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| Ref No. : | GCA/COMM-C5/TPY/23/288/LO |
| Name : | Kainan Sdn Bhd |
Lock In Period
In addition to the above, a 5.00% flat fee shall be charged to the original TL amount subject to a minimum sum of RM5,000-00 whichever is higher, in the event of full redemption of the TL prior to full settlement in accordance with the repayment clause above.
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| 3. | Promissory Note (“PN”) under Pemulih Government Guarantee Scheme guaranteed by Syarikat Jaminan Pembiayaan Perniagaan Berhad |
Limit: RM4,000,000-00 Only.
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Purpose
To finance foreign/local bills acceptable to the Bank for the sale of services rendered and invisibles (including labour supply charges, insurances, transportations, custom duties, and Sales and Service Tax) in relation to your normal business operations.
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Tenure
Up to 150 days.
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Interest Rate
Effective Cost of Funds (“ECOF”) + 1.50% p.a.
[ECOF is defined as Kuala Lumpur Interbank Offer Rate (“KLIBOR”) for funds of matching tenure plus the cost of maintaining liquidity requirements, statutory reserves and any other cost that may be stipulated by the relevant regulatory authorities plus the Bank’s Administration Cost.]
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Overdue Interest
1.00% p.a. above prescribed rate subject always to a minimum charge of RM5-00.
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Other Terms Applicable for Trade Facilities
| a) | Utilisation of PN is restricted to 10 pre-approved suppliers to be submitted to the Bank for approval. |
| Note: | A handling fee of RM25-00 is payable for each request to include new supplier/buyer (whichever is applicable) and will be debited to your account with the Bank. |
| b) | Financing of inter-related company transactions under PN is not allowed. |
SECURITY/SUPPORT
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To Be Obtained
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For All Credit Facilities
| 1. | Facilities Agreement to be stamped as Principal Instrument. |
| 2. | Joint and Several Guarantee of the following persons for RM5,643,000-00:- |
| a) | Tan Poh Hee | (NRIC No.: 490925-08-5451) |
| b) | Dato’ Whitney Tan Ann Nee | (NRIC No.: 791114-08-5780) |
| 3. | Any other supporting documents and/or security documents as required by the Bank and/or the Solicitors. |
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| Ref No. : | GCA/COMM-C5/TPY/23/288/LO |
| Name : | Kainan Sdn Bhd |
Additional for OD and PN
| 4. | Guarantee from Syarikat Jaminan Pembiayaan Perniagaan Berhad (“SJPP”) which provides a guarantee of 80% on the loan amount:- |
| a) | Pemulih Government Guarantee Scheme (“Scheme”) |
| b) | Guarantee fee of 1.00% p.a. based upon guarantee amount to be collected upfront yearly. |
| 5. | Certificate of Guarantee from SJPP under the Pemulih Government Guarantee Scheme (“Scheme”) for RM4,000,000-00. |
| 6. | Creation of a Sinking Fund of RM1,000,000-00, to be built-up by way of 60 monthly Fixed Deposits placements of RM16,667-00 each together with interest accrued thereon commencing 7 months after the date of first disbursement of Credit Facilities. A Memorandum of Charge of Money Deposits is to be duly executed and stamped. |
| 7. | Letter of Instruction from the Fixed Deposit Pledgor to authorise the Bank to debit the Fixed Deposit Pledgor’s Current Account maintained with the Bank for the Sinking Fund Build-up. |
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Additional for TL
| 8. | A Business Loan Level Term Assurance (“BLLTA”) for the sum insured of RM3,000,000-00 to cover the life of Dato’ Whitney Tan Ann Nee with the Bank’s appointed insurer (i.e. Manulife Insurance Berhad) with Alliance Bank Malaysia Berhad endorsed as assignee/mortgagee/loss payee. |
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COVENANTS
| 1. | To channel not less than 30% of your total revenue into your Current Account maintained with the Bank throughout the tenure of the Credit Facilities granted herein, failing which the Bank reserves the right to revise the limits/interest rates of your Credit Facilities at its sole and absolute discretion. |
| 2. | Your gearing ratio shall not exceed 2.5 times (including subordination of directors’ advances) during the subsistence of the Credit Facilities with the Bank. |
Note: Gearing ratio is defined as total borrowings / Tangible networth.
| 3. | Borrower shall seek prior written consent from the Bank for dividend payment exceeding 50% of your Profit After Tax during the subsistence of the Credit Facilities with the Bank. |
| 4. | Subordination of advances from your directors/ shareholders of not less than RM3,000,000-00 during the subsistence of the Credit Facilities with the Bank. |
| 5. | Any of the changes/ variations listed below in Borrower’s company is to be inform to the Bank for onward notification to/ consent by SJPP and the Bank:- |
| a) | Changes in nature of business. |
| b) | Non-compliance on terms and conditions and/or covenants by the Bank and/or SJPP i.e. breach of gearing covenant, non-placement of sinking fund, additional financing obtained without the Bank and SJPP’s prior written consent, declaration of dividend and etc. |
| c) | Variation of securities which include disposal of charged properties, discharge of guarantors, upliftment of fixed deposits and sinking fund. |
| d) | Change in structure of financing facilities. |
| e) | Deferment of settlement date. |
| f) | Granting of additional financing. |
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| Ref No. : | GCA/COMM-C5/TPY/23/288/LO |
| Name : | Kainan Sdn Bhd |
CONDITIONS PRECEDENT TO DRAWDOWN / AVAILABILITY OF THE CREDIT FACILITIES
| 1. | Receipt of the duplicate of this Letter of Offer duly accepted by the Borrower’s authorised signatory(ies). |
| 2. | Receipt of the Board of Directors’ Resolution of the Borrower, authorising acceptance of this Letter of Offer and execution of the security document(s). |
| 3. | Receipt of a copy each of the Certificate of Incorporation, Memorandum and Articles of Association and the latest Forms 24, 44 and 49 (or their equivalent under the Companies Act 2016) of the Borrower, duly certified as true by the duly appointed Company Secretary of the Borrower. |
| 4. | Receipt of the specimen signatures of all the authorised signatories of the Borrower. |
| 5. | A Current Account shall be opened with the Bank in the name of the Borrower. |
6. Consent/ Notification (whichever is applicable) is to be obtained from SJPP on the facility.
| 7. | Irrevocable Letter of Instruction/Authorization from the Borrower authorizing the Bank to debit Current Account for all profit, commission, bank charges, TL repayments and settlement of facilities and all other Credit Facilities present and in the future. |
| 8. | Receipt of documentary evidence acceptable to the Bank that the existing trade bill financing facilities amounting to RM8,000,000-00 granted by HSBC Bank Malaysia Berhad has been cancelled. |
| 9. | The Bank is in receipt of a written confirmation(s) from the Company Secretary of the Borrower/security party(ies) that no prior debenture has been created in favour of any party. |
| 10. | Receipt of a legal opinion from the Bank’s solicitors confirming the satisfactory compliance and fulfillment of all the conditions precedent, the validity and enforceability of all the security documents as well as completion and perfection of all loan documentation. |
| 11. | The original copy of each of the relevant security/requisite documents shall have been deposited with the Bank. |
| 12. | The Bank shall have obtained the results of such searches as the Bank may require and such results must not disclose the presence or existence of any circumstances which might or would prejudice the Borrower and/or the security party(ies) and/or the security(ies) granted and/or to be granted to the Bank and/or the Bank’s interests and/or rights in howsoever manner. |
| 13. | Completion of all documentation to the satisfaction of the Bank. |
| 14. | Fulfillment of any other terms and conditions deemed necessary by the Bank. |
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SPECIFIC CONDITIONS
| 1. | You are to execute and return to us the “Written Permission to Consent to the Disclosure of Information” herein below. |
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| Ref No : | GCA/COMM-C5/TPY/23/288/LO |
| Name : | Kainan Sdn Bhd |
| 2. | The above offer is subject to the Government of Malaysia giving its guarantee cover as herein stated. In the event that the guarantee cover is not approved or is approved on a reduced guarantee cover basis or is cancelled for any reason(s) whatsoever, the offer is deemed null and void and the Bank reserves the sole discretion to review your application under revised terms and conditions including but not limited to the amounts and tenor, the security / support and also the interest rates and commissions on a mutually agreeable basis. |
| 3. | Upon acceptance of this Letter of Offer, you are to place a cash deposit equivalent to the amount of the guarantee fee required by the Government of Malaysia for issuing its Certificate of Guarantee. The guarantee fee is payable prior to issuance of the Certificate of Guarantee. |
| 4. | The guarantee fee paid shall not be refunded in the event of cancellation of the guarantee for whatsoever reason. |
| 5. | The Bank reserves the right to vary and/or impose any terms and conditions as and when required under the Schemes. |
| 6. | The Bank reserves the right to recall the facility if it is not used for the intended purpose. |
| 7. | Subject to prompt and full payment of the guarantee fee, the guarantee from Government of Malaysia is valid for a maximum period of up to 10 years but shall not exceed 31 December 2035, whichever is earlier, whereupon the Credit Facility(ies) shall be terminated/varied at the Bank’s sole discretion. |
| 8. | The first drawdown of the financing (either partially or wholly) must be made within 6 months from the date of Guarantee Notification Letter (“GNL”). Any extension of up to 6 months shall subject to consent/ notification from Syarikat Jaminan Pembiayaan Berhad. |
| 9. | This facility is subject to annual review by SJPP, any changes in terms and conditions of these facilities are subject to final consent by SJPP, failing which, all terms & conditions shall remain unchanged from the last approved Letter of Offer / Renewal, and the Bank will reserve the overriding right of repayment on demand. |
FEES
| Facility Fee: | Nil. | |
| Renewal Fee: | The Bank may impose a fee to be decided at its sole & absolute discretion upon review / renewal of the facilities. | |
| Guarantee Fee: | 1.00% p.a. of the guaranteed amount is payable upfront on yearly basis and will be debited from your Current/ Overdraft Account maintained/ to be maintained with us. | |
| Cancellation Fee: for Guarantee Cover | A fee of RM100-00 will be debited from your Current/ Overdraft Account maintained with us and payable to SJPP (Syarikat Jaminan Pembiayaan Perniagaan Berhad - the appointed agency to administer the scheme) in the following circumstances: |
| 1. | Request by you for the cancellation of the guarantee; Or | ||
| 2. | Cancellation of guarantee by SJPP due to the failure to disburse the financing facility, which is chargeable after a period of six (6) months from the date of the guarantee approval from SJPP. |
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| Ref No. : | GCA/COMM-C5/TPY/23/288/LO |
| Name : | Kainan Sdn Bhd |
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TAXES
Unless otherwise specified herein, our fees and/or charges exclude any current and future taxes (if any) that may be imposed, under the relevant legislation. Upon the effective date of implementation of any such taxes in the future and wherever applicable, the Bank shall be entitled to recover such taxes from the Borrower.
INTEREST RATE UPON RECALL OF FACILITIES
In the event the Credit Facilities are recalled by the Bank, interest at the Bank’s prevailing Current Account Excess Rate or 1.00% p.a. above the prescribed rate, whichever is higher, shall be charged on the amount(s) outstanding until the date of full settlement.
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OTHER TERMS & CONDITIONS
| i. | Please refer to the **“Trade Finance General Agreement and Standard Terms & Conditions For Credit Facilities” **attached hereto which form an integral part of this Letter of Offer. |
| ii. | We enclose herewith the list of the Bank’s panel solicitors / valuer / insurance / takaful for your confirmation on the appointment of the same (whichever applicable). |
Kindly indicate your acceptance of the foregoing by signing and returning the duplicate of this Letter of Offer and the appendices hereto together with your Board of Directors’ Resolution within fourteen (14) days from the date of this Letter of Offer or such other period as may be extended by the Bank in writing, failing which our offer herein shall be deemed to have lapsed.
Should you have any queries pertaining to the Credit Facilities, please do not hesitate to contact the undersigned.
| Yours faithfully, | ||
| for ALLIANCE BANK MALAYSIA BERHAD | ||
| /s/ GEETHA DEVI A/P POOPALAM | /s/ WILSON FOO TUCK FEI | |
| GEETHA DEVI A/P POOPALAM | WILSON FOO TUCK FEI | |
| Assistant Vice President | Team Lead | |
| Group Credit Administration | Commercial Banking | |
| Central 5 |
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| Ref No. : | GCA/COMM-C5/TPY/23/288/LO |
| Name : | Kainan Sdn Bhd |
Written Permission to Consent to the Disclosure of Information
I/ We, **Kainan Sdn Bhd **hereby irrevocably consent and authorize:
| 1. | The Bank to disclose to SJPP (Syarikat Jaminan Pembiayaan Perniagaan Berhad); |
| 2. | The SJPP to disclose to the Government of Malaysia; and |
| 3. | The Government of Malaysia and/ or the SJPP to disclose to any participating financial institution of the Scheme, |
at any time and without notice and liability, any information relation to our affairs, banking accounts or conduct thereof (including our credit standing) pertaining to all matters relating to the Scheme. To such extend and for such purposes as the Bank, SJPP or the Government of Malaysia may in their absolute discretion deem necessary or expedient.
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I/We hereby accept the terms and conditions contained herein:-
| /s/ WHITNSY TAN ANN NEE | |
| Signed by | Signed by |
| Name : WHITNSY TAN ANN NEE | Name : |
| NRIC : 791114-08 5780 | NRIC : |
| Date : 10-07-23 | Date : |
| (for companies, authorised signatory(ies) to execute and affix company stamp) |
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