General Security Agreement
General Security Agreement
General Security Agreement
Security
Agreement
These are the terms and conditions
which form part of your General
Security Agreement.
As this is an important document,
please store it in a safe place.
1 Nature of Security Interest and charge
1.1 Nature of Security Interest in Personal Property
T he Security Interest in Personal Property created or provided for by this deed is a Security Interest, and this deed is a
Security Agreement, each for the purposes, and within the meaning, of the Act. In relation to Accounts Receivable, the
Security Interest takes effect as a transfer.
1.2 Nature of charge
The charge created by this deed over the Non-Personal Property is a fixed charge and, to the extent to which the fixed
charge intended to be created is not effective, is a floating charge until such time as it may crystallise.
2 Payments
2.1 Payment
T he Debtor must pay the Secured Money to the Secured Parties on time. The Debtor must pay the Secured Money on
demand, except where a Bank Document provides otherwise, in which case the Debtor must pay in the manner agreed on
in that other Bank Document.
2.2 Expenses
The Debtor agrees to reimburse the Secured Parties, each Officer, each Receiver and each Attorney, on demand, for their
expenses in relation to:
– the Secured Property or the Secured Money;
– the preparation, execution, completion and registration of each Bank Document, and any subsequent consent,
approval, waiver, amendment or release;
– any valuation or inspection of, or report on or concerning, the Secured Property;
Contents
– any enquiry by a Governmental Agency concerning the Debtor or related to a Bank Document;
– the necessity for, or desirability of, registering a Financing Statement or Financing Change Statement, or taking action
to protect its position in relation to the Secured Property; and
– complying with a demand given under section 162 of the Act.
This includes expenses incurred in any review or environmental audit, in reimbursing or indemnifying any Officer,
employee, Receiver or Attorney, or in retaining consultants to evaluate matters of concern to the Secured Parties. It also
includes administrative time and costs, including the time of Officers and other employees of the Secured Parties (whose
time and costs are to be charged at reasonable rates). It also includes, in each case, legal fees and expenses on a full
indemnity basis plus goods and services tax on all expenses.
2.3 Costs
T he Debtor indemnifies the Secured Parties and each Receiver and Attorney, on demand, against any Loss or Liability it
may suffer or incur as a direct or indirect consequence of:
– an Event of Default or Potential Event of Default;
– any contemplated, attempted, or actual exercise or defence of any Power, or the failure to exercise any Power;
– a Secured Party receiving an amount under any Bank Document on a date other than the
due date; or
– the Debtor’s interest in, or possession of, the Secured Property or any control or Power over the Secured Property or
the Debtor.
2.4 Interest
The following will apply except to the extent that the Secured Parties and the Debtor agree otherwise:
– interest will accrue on all parts of the Secured Money at the rate which applies to the Secured Money under
the relevant Bank Document. If there is no such rate, interest will accrue at the rate certified by an Officer to be
the relevant Secured Party’s Indicator Lending Rate (or the rate declared by the relevant Secured Party to be in
substitution for it) plus the margin then applicable to similar accounts. If that rate changes, the changed rate will apply
from the day on which the changed rate becomes generally applicable;
– interest will accrue on a daily basis based on a 365 day year. It will be calculated on the outstanding balance of each
sum included in the relevant Secured Party’s Secured Money, up to the date of actual payment from (and including)
the date when that sum became Owing by the Debtor. That date, in the case of an amount payable to cover a sum
paid by a Secured Party to the Debtor or anyone else, will be taken to be the date when the Secured Party paid that
amount;
3 Undertakings
3.1 Term of obligations
Each obligation in this deed continues from the date of this deed until the Secured Money is fully and finally repaid and
whether or not a Secured Party has exercised any Power.
3.2 Undertakings relating to Secured Property
The Debtor undertakes to the Secured Parties as follows, except to the extent that the Secured Parties consent, or as
expressly permitted in the Bank Documents:
negative pledge The Debtor will not create, or permit to subsist, a Charge in, or over, any Secured Property other
(a)
than:
– as created by this deed or any Collateral Security;
– a Security Interest over property securing all or part of the purchase price of that property created in the ordinary
course of business of the Debtor where the amount secured is paid within 90 days;
– a Deemed Security Interest; or
– a lien arising only by operation of law in the ordinary course of business of the Debtor.
(b) d
isposal of property Except as expressly permitted by paragraph (a) above, the Debtor will not sell, lease, create or
waive any interest in, or part with possession or otherwise dispose of, any Secured Property other than for disposals of
Inventory and the collection of Accounts Receivable, in each case in the ordinary course of business of the Debtor and
prior to a Secured Party giving notice, following an Event of Default or Potential Event of Default, that such disposals
and collections are no longer permitted.
(e) pay taxes The Debtor will pay all Taxes payable by it when due, but:
– it need not pay Taxes for which it has set aside sufficient reserves and which are being contested in good faith,
except where failure to pay those Taxes may have a Material Adverse Effect, or could give rise to a preferential
claim over any of the Secured Property, or where payment is required by law; and
– on the final determination or settlement of the contest it must pay the contested Taxes which it is liable to pay.
conduct of business The Debtor will conduct its business in a prudent, proper and efficient manner, and will
(f)
perform and protect all material contracts, franchises and licences, and protect all intellectual property rights
material to the business. The Debtor will not materially change the nature or scope of its business.
records and accounts The Debtor will keep records and accounts relating to itself and its business, and will prepare
(g)
financial statements and, on request, have them audited in accordance with the law and current accounting practice
even where the law does not require it to appoint an auditor.
(h) i nspection The Debtor will allow the Secured Parties, or persons authorised by the Secured Parties or by an Officer,
at any time during normal business hours, to inspect property, premises and records of the Debtor and the Secured
Property and require the provision of copies of the records. The Debtor must do everything in its power to assist that
inspection and provide those copies.
(i) a
cquisition of property The Debtor will immediately notify the Secured Parties if it enters into an agreement to
purchase, or otherwise acquire, an estate or interest in Land (other than a Lease for a term (including all renewal
options) of less than three years).
(j) reporting and information The Debtor will provide to the Secured Parties:
– as soon as practicable (and in any event not later than 120 days) after the close of each of its financial years
copies of its financial statements for that financial year, all of which must be audited unless the Secured Parties
agree otherwise; and
(o) corporate existence The Debtor will do everything necessary to maintain its corporate existence and will not
transfer its jurisdiction of incorporation.
(p) major transactions The Debtor will not enter into a Major Transaction unless that Major Transaction has been
unanimously approved by the shareholders of the Debtor (or, if the Secured Parties so consent, by a special resolution
within the meaning of the Companies Act).
(q) amalgamation The Debtor will not enter into, or become the subject of, an amalgamation under the Companies Act.
(s) distributions The Debtor will not make any Distribution other than dividends paid out of profits in accordance with
current accounting practice.
(t) u
npaid capital The Debtor will not call up, or receive in advance of calls, any Unpaid Capital, and it will apply Unpaid
Capital, when paid, only towards payment of the Secured Money.
(u) s ubsidiary The Debtor will immediately notify the Secured Parties if it creates or acquires a Subsidiary. If required
by the Secured Parties, the Debtor must immediately do everything necessary to ensure that the Subsidiary gives a
first-ranking Charge over its property and a guarantee, each in the form specified by the Secured Parties and to the
satisfaction of the Secured Parties.
(v) transactions with Related Companies The Debtor will not enter into any transaction with a Related Company,
unless the transaction is for value, in the ordinary course of business, and on normal commercial terms.
(w) change of name The Debtor will not change its name without first notifying the Secured Parties at least ten working
days prior to the date on which the name change becomes effective. Following any name change, the Debtor will take
all steps necessary to enable the Secured Parties to amend any financing statement.
5 Default
5.1 Events of Default
Each of the following is an Event of Default (whether or not it is within the control of the Debtor):
(a) payment The Debtor fails to pay any Secured Money when due (time being of the essence).
(b) o
bligations under bank documents The Debtor fails to comply with any of its other obligations under a Bank
Document.
(c) obligations of guarantor A Guarantor fails to comply with any of its obligations under a Bank Document.
(d) c ross-default Any Indebtedness of the Debtor or any Guarantor to anyone is not paid when due (or within an
applicable grace period) or becomes due or capable of being declared due and payable before its stated maturity.
In the case of unsecured Indebtedness in respect of the purchase price of an asset or service purchased in the ordinary
course of business, this will apply only if it is not paid within 90 days of the due date or if the vendor has earlier taken any
step to recover the asset or withdraw the service.
Any facility or obligation to provide loans or credit to the Debtor or a Guarantor or to acquire or underwrite Indebtedness is
terminated early.
Any Charge affecting the Secured Property is enforced or becomes enforceable.
Any Lease of any of the Secured Property becomes liable to forfeiture or any obligation under any Lease is breached.
(e) insolvency; bankruptcy; death The Debtor or any Guarantor:
– is unable to pay its debts, is deemed or presumed to be unable to pay its debts, or stops or suspends or threatens
to stop or suspend payment of all or any of its debts;
– suffers a Bankruptcy Event or an Insolvency Event; or
– dies or ceases to be of full legal capacity.
(f) l imitation of bank documents All or any part of this deed, a Collateral Security or any other material Bank
Document is terminated or is or becomes or is claimed to be illegal, invalid, unenforceable or of limited force
and effect.
A party becomes entitled to terminate, limit, cancel, rescind or avoid all or any part of any such document.
7 Power of attorney
The Debtor appoints the Secured Parties, every Officer and Receiver severally its Attorney to do what it agreed to do in any
Bank Document (including, without limitation, under clause 4.2 of this deed) but fails to do and, at any time after an Event
of Default (and whether or not it is continuing), any of the things listed in clause 6.3 of this deed. Each Attorney may also
delegate its Powers (including delegation). This appointment is made for valuable consideration and the Debtor may not
revoke it.
13 Assignment
The Secured Parties may transfer their rights and obligations under this deed, any Bank Document and all or part of the
Secured Money to someone else, and may disclose information about the Debtor to any potential transferee. Following
any transfer, this deed and any transferred Bank Document will apply to the transferee as if it were the transferring Secured
Party.
T o the maximum extent allowed by law, any transfer will be free of set-off, equity or counter-claim which the Debtor would
have had against the transferring Secured Party or any transferee of any Bank Document but for this clause.
14 Exercise of Powers
No failure to exercise any Power and no delay in exercising any Power operates as a waiver. Nor does
any single or partial exercise of any Power preclude any other or further exercise of that Power or any
other Power.
The Powers in this deed and each Collateral Security are in addition to, and do not exclude or limit, any
right, power or remedy provided by law.
Except where expressly stated otherwise, the Secured Parties may give or withhold, or give conditionally,
approvals and consents, may be satisfied or unsatisfied, may form opinions and may exercise their
Powers, at their absolute discretion.
15 Obligations continue
The obligations of the Debtor under this deed continue after it suffers a Bankruptcy Event or Insolvency
Event and after the Secured Parties learn of it.
16 Notices
Any Officer may sign a demand, certificate, notice or other document for a Secured Party.
A Secured Party may, subject to the requirements of any applicable law:
– deliver the document personally to the Debtor or the Debtor’s agent or personal representative;
– send it through the post to the place where the Debtor (or the Debtor’s agent or personal representative):
- resides;
- carries on business; or
- has its registered office,
or the place most recently known to the person signing the document as such a place or such other last known
address of the Debtor; or
– leave it at any one of those places; or
– send it by facsimile to the Debtor’s (or Debtor’s agent’s or personal representative’s) last known facsimile number; or
– send it by e-mail or electronic transmission to the Debtor’s (or Debtor’s agent’s or personal representative’s) last
known address for that purpose.
If the document is sent through the post to the Debtor, it is to be regarded as having been received on the third Banking
Day after posting, even if it never arrived. If it is sent by facsimile, it is to be regarded as having been received when
the sending machine receives a confirmation that it has been sent in its entirety. If it is sent by e-mail or electronic
transmission, it is to be regarded as having been received by the Debtor (or the Debtor’s agent or personal representative)
on the day that it is sent (regardless of whether or not it is actually received), provided that no record has been generated
notifying the Secured Parties that the transmission has failed.
19 Survival of indemnities
Each indemnity and reimbursement obligation in this deed will survive discharge of this deed.
20 Saving of deed
If any provision of this deed is not enforceable in any country because of the laws of that country then that will not affect:
– the other provisions of this deed; or
– the enforceability of that provision in any other country.
21 No merger
No Power, and nothing in this deed or any Bank Document, is adversely affected merely because of the existence of
any other Bank Document, or by any judgment, right or remedy against any person which a Secured Party, or someone
claiming through a Secured Party, may have at any time.
25 Continuing security
T his deed is a continuing security until a final discharge has been given by Westpac NZ despite any payment or anything
else.
T he Debtor will not be entitled to request a final discharge of this deed and the Charges created by it until the Secured
Parties are satisfied that all Secured Money has been repaid in full, and that the Secured Parties have no further obligation
to advance any further Secured Money and have no contingent liability or obligation under any Bank Document, and that
no payment may be voided, voidable or required to be repaid by the Secured Parties under any law. In any event, the
Debtor acknowledges that (subject to any law to the contrary) any request for a discharge must give the Secured Parties 15
Banking Days’ notice.
If any payment or other transaction under this deed is void, voidable, or required to be repaid by any law, that payment
or other transaction will be deemed not to have affected the Debtor’s liability to the Secured Parties, even if this deed has
already been released. In those circumstances, the Secured Parties will be restored to the position they had been in prior
to that release, payment or other transaction. If that happens, the Debtor must do all things and sign all documents as
may be necessary to restore the Secured Parties to that position.
29 Interpretation
In this deed:
29.1 Definitions
The following definitions apply unless the context requires otherwise:
Accessions, Account Receivable, Aircraft, Chattel Paper, Document of Title, Financing Change Statement,
Financing Statement, Intangible, Inventory, Investment Security, Land, Motor Vehicle, Negotiable Instrument,
Organisation, Register, Security Agreement, Security Interest, Serial-Numbered Goods and Verification
Statement have the respective meanings given to those terms in the Act.
Act means the Personal Property Securities Act 1999 and, where the context requires, includes the Regulations.
After-acquired property has the meaning given to that term in the Act, but also includes that which has become
personal property during the time that the Debtor has had rights in it.
Attorney means a person appointed as attorney under this deed or any Collateral Security.
Authorisation includes:
– any consent, authorisation, registration, filing, lodgement, agreement, notarisation, certificate, permission, licence,
approval, authority and exemption from, by or with a Governmental Agency; and
– in relation to anything which will be fully or partly prohibited or restricted by law if a Governmental Agency intervenes
or acts in any way within a specified period after lodgement, filing, registration or notification, the expiry of that period
without intervention or action.
Bank Document means a document or agreement:
– to which the Secured Parties and any one or more of the Debtor and any Guarantors are or become parties or purport
to be or become parties; or
Collateral Security means any Charge, Guarantee or other document or agreement at any time created or entered into
as security or support for any Secured Money.
Companies Act means the Companies Act 1993.
Company has the meaning given to that term in the Companies Act and includes overseas company as defined in the
Companies Act.
o-operative Dairy Company means a co-operative company that is registered as a co-operative dairy company under
C
section 35 of the Co-operative Companies Act 1996.
ebtor means the individual(s) or Organisations (including Companies) named on the first page of this deed and, if there
D
is more than one person named as Debtor, then it means those persons jointly and severally.
eemed Security Interest means a Security Interest within the meaning of section 17(1)(b) of the Act (other than as
D
constituted by a transfer of an Account Receivable or Chattel Paper) except to the extent that the relevant transfer, lease or
consignment secures payment or performance of an obligation.
Distribution has the meaning given to it in the Companies Act.
nvironment includes the natural physical surroundings of humankind (whether affecting individuals or groupings of
E
individuals) and any human-made changes to them, and any buildings.
Environmental Law means a provision or law which relates to an aspect of Planning, the Environment or the health,
safety and welfare of humans individually and collectively.
Event of Default means any of the events described in clause 5.1, each of which is a default for the purposes of the Act.
Governmental Agency means any government or any governmental, semi-governmental, or judicial entity or authority
or revenue agency, including any local government, statutory or self-regulatory organisation established, approved or
authorised under law, and any stock exchange, in any case having jurisdiction in relation to the affairs of any party to a Bank
Document or to whose control or jurisdiction any party to a Bank Document has consented.
Guarantee means any guarantee, indemnity, letter of credit, legally binding letter of comfort or suretyship.
It includes any obligation or irrevocable offer to be responsible for a debt (as defined below) or for the insolvency or
financial condition of another person.
It also includes any other obligation or irrevocable offer to pay a debt or to purchase a debt, to provide funds for the
payment or discharge of a debt (whether by the advance of money, the purchase of or subscription for Negotiable
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General Security Agreement 18