Deed of Assignment (Insurance Claims)

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Deed of Assignment (Insurance) Details 4 

Agreed terms 5 

1.  Defined terms and interpretation 5 1.1  Defined terms 5 1.2  References 7 

2.  Covenant to pay 7 2.1  Payment 7 2.2  Application of moneys 7 

3.  Assignment and transfer by way of security 7 3.1  Assignment of Benefits 7 3.2  Lodgement of claims 7 3.3  Claims for new Events 8 3.4  Excess 8 3.5  Notice 8 3.6  Nature of security 8 3.7  Security interest and Charge 8 3.8  Transfer and assignment 8 

4.  Representations and undertakings 9 4.1  Representations 9 4.2  Undertakings 9 4.3  Conduct of claims 10 4.4  Representations repeated 11 4.5  Reliance 11 

5.  Rights, powers and remedies 11 5.1  Limited Agency 11 5.2  Exercise of rights, powers and remedies 11 5.3  Third party 12 5.4  Not liable 12 5.5  Receipts 12 

6.  Attorney 13 6.1  Appointment of attorney 13 6.2  Ratification 13 6.3  Third party 13 

7.  Costs 13 7.1  Costs and expenses 13 

8.  Appointment of receiver and manager 14 8.1  Power of appointment 14 8.2  Receiver agent of Customer 14 

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8.3  Joint and several 14 8.4  Receiver’s powers 14 8.5  Remuneration 15 

9.  Continuing security 15 9.1  Continuing 15 9.2  No marshalling 15 

10.  Priority of security 15 10.1  Section 92 PLA 15 

11.  Liability in relation to the Insurance 16 11.1  Liability in relation to the Insurance 16 

12.  Indemnity 16 12.1  Enforcement 16 

13.  Re-assignment and transfer 16 13.1  Re-assignment and transfer 16 

14.  Trustee 16 14.1  Constructive trustee 16 14.2  Application 17 

15.  Notices 17 15.1  Form and delivery of notice 17 15.2  Receipt of notice 17 

16.  Additional provisions - PPSA 17 16.1  Terminology 17 16.2  PPSR registration 17 16.3  Enforcement 18 

17.  Miscellaneous 18 17.1  Exercise of power 18 17.2  Credit 19 17.3  Trust 19 17.4  Amendments 19 17.5  Remedies and waivers 19 17.6  Assignment 19 17.7  Acknowledgement 20 17.8  Counterparts 20 17.9  Governing law 20 

Signing page 21 

Schedule 1 22 

Schedule 2 – Notice of assignment of Insurance Claims 23 

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Details

Date

Parties

The Customer and the Bank set out in schedule 1

Background A At the request of the Customer, the Bank has made or is to make available financial

accommodation to the Customer.

B The Bank requires that the Customer enters into this deed as part of the Bank’s security requirements.

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Agreed terms

1. Defined terms and interpretation 1.1 Defined terms

In this document:

Assignment means the assignment to the Crown under the agreement for sale and purchase of the Property between the Crown and the Customer of certain rights and remedies in relation to the EQC Cover.

Benefits means all of the rights and remedies of the Customer in respect of:

(a) to the extent allowed by law, the Claims or Further Claims, as applicable, including without limitation:

(i) the right to pursue any Claim or Further Claim against the Insurer;

(ii) the proceeds of any Claim or Further Claim;

(iii) the power to give good discharge in respect of the Claim or Further Claim; and

(b) any other actual or potential claim in respect of loss or damage to the Property (land or fixtures) arising from any Event which is not subject to a right of subrogation of the Insurer under Insurance.

Claim means claims described in Schedule 1 (to the extent of the Customer's interest in those claims), to the extent that such claims relate to damage and/or loss to any fixtures on the Property in respect of any Event, and for the avoidance of doubt:

(a) includes the benefits of such claims as they relate to the repair, replacement and removal of fixtures on the Property; but

(b) excludes any contents, stress, accommodation or moving cost benefits.

Crown means Her Majesty the Queen in right of New Zealand acting through the Chief Executive of the Christchurch Earthquake Recovery Authority.

EQC means the Earthquake Commission constituted under the EQC Act.

EQC Act means the Earthquake Commission Act 1993.

EQC Cover means the insurance of the Property (Land only) under section 19 of the EQC Act.

Event means any event causing damage and/or loss to the Property occurring on or following 4 September 2010.

Event of Default means a default or an event of default howsoever described in any Facility Document.

Facility Document means any agreement between the Customer and the Bank (whether or not other persons are parties to it) relating to any Secured Money, and includes this deed, any Loan Agreement, Mortgage, Guarantee, or any other agreement relating to the provision of loans, advances or other banking accommodation made between the Customer and the Bank (whether or not other persons are parties to it), present or future.

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Further Claim means any other claim made by the Customer (including any claim made in accordance with clause 3.2 or 3.3, as applicable) to the extent that such claims relate to damage and/or loss to any fixtures on the Property and for the avoidance of doubt:

(a) includes the benefits of such claims as they relate to repair, replacement and removal of fixtures on the Property; but

(b) excludes any contents, stress, accommodation or moving cost benefits.

Guarantee means any guarantee, indemnity, letter of credit, suretyship or any other agreement the economic effect of which is to assume responsibility for the indebtedness, other obligations, or solvency or financial condition, of a person, which is given by the Customer to the Bank.

Insurer means any person that is the issuing party of the Insurance, however described under the terms of such Insurance.

Insurance means all contracts for insurance under which the Property is insured against natural disaster (including earthquake) damage, whether that contract includes other risks or not together with any renewal, replaced or extension of such contracts.

Land means residential land comprising the Property, as the term "residential land" is defined in the EQC Act.

Loan Agreement means any loan agreement, bill facility agreement, overdraft facility, letter or other agreement relating to loans, advances or other banking accommodation made between the Customer and the Bank (whether or not other persons are parties to it) before, at the same time, or after, the execution of this deed.

Mortgage means any mortgage over land, made between the Bank and the Customer, including any variations to or substitution of the same.

Personal Property means all present and after-acquired personal property to which the PPSA applies, and all present and future rights in relation to any personal property to which the PPSA applies.

PLA means the Property Law Act 2007.

PPSA means the Personal Property Securities Act 1999.

Property means the land, together with all fixtures, on that land, as described in schedule 1 of this deed.

Secured Money means all amounts of any nature which the Customer (whether alone, jointly or jointly and severally with any other person) is, or may at any time become, liable (whether actually or contingently) to pay to the Bank (whether alone, jointly or jointly and severally with any other person) pursuant to any Facility Document or otherwise. For the avoidance of doubt, all amounts payable to the Bank under this deed (including, but not limited to, all costs, losses and expenses and all amounts payable under any indemnity) and all remuneration payable to any Receiver forms part of the Secured Money.

Secured Property means all of the right, title and interest of the Customer, present or future, vested or contingent:

(a) in and to the Benefits; and

(b) in and to all sums due or to become due to the Customer under or in connection with the Insurance; and

(c) in any and all sums due or to become due to the Customer by EQC for any fixtures on the Property under or in connection with the Insurance that have not yet been paid; and

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(d) in any and all sums due or to become due to the Customer by EQC under the EQC Cover to the extent that those sums are not the product of rights or remedies assigned under the Assignment; and

(e) all other rights, powers and benefits of the Customer which may have arisen or may in the future arise howsoever under or in connection with the Insurance and the EQC Cover including, but not limited to, all rights to any cause of action or remedy, but excluding any rights, powers and benefits assigned under the Assignment.

1.2 References In this deed:

(a) the singular includes the plural and vice versa; and

(b) a reference to a fixture includes, but is not limited to, all buildings, fences, erections and other improvements.

2. Covenant to pay 2.1 Payment

The Customer agrees to pay to the Bank the Secured Money:

(a) in the manner set out in the Facility Documents; or

(b) as otherwise agreed in writing between the Bank and Customer (or, in the absence of any such agreement, then upon demand by the Bank).

2.2 Application of moneys Notwithstanding any rule of law, or any appropriation or purported appropriation made by the Customer or any other person, or any other matter or circumstance, the Bank may appropriate all moneys paid to the Bank in reduction of the Secured Money as between principal, interest and other amounts due to the Bank as the Bank determines.

3. Assignment and transfer by way of security 3.1 Assignment of Benefits

To secure to the Bank payment of the Secured Money and the due observance and performance of the Customers obligations, the Customer absolutely assigns to the Bank under section 50 of the PLA:

(a) with effect on the date of this deed, all of the Customer’s interest in the Benefits in respect of Claims; and

(b) with effect on the date on which any Further Claim is lodged (including in accordance with clause 3.2 or 3.3, if applicable), all of the Customer's interest in the Benefits in respect of that Further Claim,

and, for the avoidance of doubt, the Customer shall have no further rights to, or interest in, the Benefits of Claims and Further Claims.

3.2 Lodgement of claims To the extent that the Customer has not done so before the date of this deed, the Customer shall, within 14 days of the date of this deed, lodge any such claims that the Customer is able to lodge in respect of any Event occurring before the date of this deed.

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3.3 Claims for new Events Without prejudice to the EQC Act and unless the Insurance is not in full force and effect without the Customer being in breach of clause 4.1(b), the Customer shall lodge claims under the Insurance, the EQC Act and the EQC Cover that the Customer is able to lodge in respect of any Event that occurs after the date of this deed and the Settlement of the sale of the Property to the Crown.

3.4 Excess For the avoidance of doubt, the Customer shall not be liable for any excess payable under the EQC Cover.

3.5 Notice The Bank may at any time give notice, or require the Customer to promptly give notice, of the existence of this deed and the assignment and transfer by way of security of the Secured Property to any third party, including the Insurer, in the form required by the Bank.

3.6 Nature of security The Bank’s security over the Secured Property (to the maximum extent permissible at law and under the terms of the Insurance) operates as an absolute assignment over all of the Customer’s right, title, and interest (present, future, legal and equitable) in that Secured Property.

3.7 Security interest and Charge To the extent that any of the Benefits or any of the Secured Property constitutes:

(a) Personal Property (whether assignable or not); or

(b) property which is not Personal Property and is not assignable (at law or under the terms of the Insurance),

the Customer grants a security interest in the Secured Property to the Bank as security for payment of the Secured Money and the due observance and performance of the Customer’s obligations in this deed and the Facility Documents.

3.8 Transfer and assignment The security interest granted under clause 3.7:

(a) (transfer) will to the extent that it relates to present and future accounts receivable and chattel paper, and present and future rights in relation to any accounts receivable and chattel paper, take effect as a transfer to the Bank; and

(b) (assignment) will to the extent that it relates to present and future rights or choses in action to which clause 3.7 does not apply, take effect as an assignment by way of security to the Bank in accordance with clause 3.1; and

(c) (priority for future advances) will have the same priority in relation to all Secured Money, including future advances (as that term is defined under the PPSA); and

(d) (security interest additional) is in addition to, and will not merge with or prejudice any other security interest, Guarantee, judgment or order held by or obtained by the Bank. For the avoidance of doubt, the Bank may exercise any of its rights under this deed, Facility Document, or any other agreement or security interest or Guarantee in whatever order it sees fit.

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4. Representations and undertakings 4.1 Representations

The Customer represents and warrants that:

(a) where the Bank has requested the Customer to provide the original or a copy of the Insurance, the documents provided to the Bank are complete and are all of the documents that the Customer has or holds relating to the Insurance;

(b) the Insurance is in full force and effect as at the date of this deed and shall so remain until the earlier of:

(i) the date of expiry of the Insurance in accordance with its terms (but only in the event that the Customer has requested that the insurance cover provided by that Insurance be renewed and the Insurer has declined to renew such cover); and

(ii) the date of cancellation of the Insurance by the relevant Insurer in accordance with its terms,

provided that the warranty in this clause 4.1(b) shall not apply if the Customer has fully and finally settled any Claim or Further Claim on the basis that a house on the Property is beyond economic repair; and

(c) as the date of this deed, no act or omission has been committed and no statement has been made that would invalidate the Claims, any Further Claims, any Insurance, or the EQC Cover.

4.2 Undertakings The Customer undertakes that it will:

(a) (notice) without limiting clause 3.5, upon execution of this deed forthwith give notice to each Insurer of the assignment and transfer under this deed in the form contained in schedule 2 to this deed and will provide written confirmation of this to the Bank;

(b) (copies of insurance) if requested by the Bank, provide details of the Insurance, or deposit with the Bank the original copy or copies of the Insurance or any certificates relating to the Insurance and all amendments to such Insurance held by the Customer, if any;

(c) (compliance) comply with its obligations under the Facility Documents;

(d) (disposal or encumber) not:

(i) grant or agree to grant or permit to subsist any mortgage, charge, encumbrance, pledge, security interest, assignment or any other security or arrangement having a like effect over the Secured Property; or

(ii) dispose of any of the Secured Property,

except in favour of or with the prior written consent of the Bank and will not permit or enter into negotiations for the surrender of the Insurance without the prior written consent of the Bank;

(e) (act or omission) not do or omit to do anything which may adversely affect the security of the Bank under any Facility Document;

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(f) (no variation) not:

(i) vary or agree to any variation or termination of or amendment to, or assignment by any Insurer under any Insurance; or

(ii) release any other party from any obligation or claim under, or waive any breach of, the Insurance,

except with the prior written consent of the Bank;

(g) (default):

(i) notify the Bank immediately as soon as it becomes aware of any material default or breach by any party in respect of its obligations under the Insurance; and

(ii) not take proceedings or exercise any right of termination in respect of any such default or breach without the prior written consent of the Bank, in respect of which approval the Bank will have no responsibility if the proceedings fail or any such exercise of rights prove to be improper or invalid;

(h) (further assurance) within any reasonable timeframe required by the Bank, do all things reasonably requested by the Bank to allow the Customer:

(i) to receive the full benefit of this deed; and

(ii) to receive the full benefit and enjoyment of the Benefits, including by providing such further assignments of claims and/or the proceeds of claims as the Bank may reasonably require;

(i) (protect interest) institute and maintain all such proceedings as may be necessary or expedient to preserve or protect the interests of the Bank under the Insurance;

(j) (moneys payable) ensure that all moneys payable under, arising out of, or in connection with the Insurance are paid without deduction or set off for the credit of such bank account as the Bank may nominate from time to time; and

(k) (information) provide any information as may be reasonably required by the Bank from time to time.

4.3 Conduct of claims The Customer undertakes to:

(a) do all things reasonably necessary to ensure that each Claim and Further Claim is accepted, including compliance with all procedures for the lodgement of Claims and Further Claims and the completion of any documentation necessary to lodge and successfully pursue a Claim or Further Claim;

(b) not do anything that may prejudice the Bank’s ability to enjoy the Benefit of any Claim or Further Claim including receiving any proceeds of or settling a Claim or Further Claim;

(c) continue to pay the Insurance premiums so as to ensure that the Customer's warranty given in this clause 4 is complied with; and

(d) comply with all reasonable directions of the Bank in respect of the conduct of all Claims and Further Claims.

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4.4 Representations repeated The representations in this clause 4:

(a) are repeated, with reference to the facts and circumstances existing at the time, on each day on which any Secured Money remains outstanding; and

(b) apply in its current form when repeated, despite any contrary disclosure by the Customer or any other person, unless the Bank agrees in writing to waive it.

4.5 Reliance The Customer acknowledges that the Bank has entered into this deed in reliance on the representation in this clause 4.

5. Rights, powers and remedies 5.1 Limited Agency

(a) The Bank appoints and authorises the Customer to act as its limited agent in:

(i) lodging any such Claims or Further Claims that the Customer is entitled to under the Insurance;

(ii) do all things reasonably necessary to ensure that each Claim and Further Claim is accepted, including compliance with all procedures for the lodgement of Claims and Further Claims;

(iii) the completion of any documentation necessary to lodge and successfully pursue a Claim or Further Claim;

(iv) negotiating any Claim or Further Claim; and

(v) issuing and receiving notices under the Insurance on behalf of the Bank,

provided that in doing so, the Customer acts in the best interests of the Bank and itself.

(b) The Customer has no authority to bind the Bank and shall not attempt to bind the Bank in relation to:

(i) the compromise of, or settlement of, any Claims or Further Claims;

(ii) receiving any sums from the Insurer in respect of any Claims or Further Claims; or

(iii) any other matter relating to the Claim or Further Claim,

except in accordance with the written consent or instructions of the Bank.

(c) The Customer shall have no authority, duties or responsibilities as except those expressly set out in clause 5.1(a).

(d) The limited agency created by this clause is automatically revoked upon:

(i) the occurrence of an Event of Default; or

(ii) notice in writing from the Bank where the Bank, in its absolute and sole discretion, determines that the Customer has failed to act either in accordance with the Bank’s written instructions or in the best interests of the Bank.

5.2 Exercise of rights, powers and remedies The Bank will be entitled (but not obliged), without notice or further demand and at the Customer’s cost immediately to put into force and exercise all the rights, powers and remedies

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possessed by it according to law as assignee of the Secured Property and, without limitation, will have the right to:

(a) demand, collect, recover, compromise and give a good discharge for any and all moneys and claims for moneys under, or arising out of, or in connection with the Secured Property;

(b) exercise in relation to the Secured Property all such rights as the Customer might have been entitled to exercise in relation to the Secured Property but for this deed or on such terms as the Bank thinks fit or make arrangements with any person in connection with the Secured Property as the Bank thinks fit;

(c) without limiting clause 3.5, give notice of the existence of this deed and the assignment and transfer by way of security of the Secured Property to any third party (including any person obliged to pay any amount under or in connection with to any Insurance);

(d) take possession of all or any of the Secured Property;

(e) sell or otherwise dispose of the Secured Property in whole or part in such manner and on such terms as the Bank may deem expedient;

(f) give valid receipts for all moneys and execute all assurances, instruments and deeds, and do all acts and things which the Bank may think proper or expedient for realising the same;

(g) take such steps and do such things as may be necessary to protect and preserve the interests of the Customer under the Secured Property and the interests of the Bank as Bank;

(h) bring, defend, arbitrate, compromise or abandon any claim or legal proceedings in relation to the Secured Property; or

(i) apply any part or all of the Secured Property or the proceeds thereof in or towards the discharge of all obligations of the Customer to the Bank and do or omit to do anything incidental to the rights specified in this clause 5.2.

5.3 Third party No purchaser or person dealing with the Bank or its agent is to be concerned to enquire:

(a) whether the security created by this deed has become enforceable;

(b) whether the powers the Bank or its agent is purporting to exercise have become exercisable;

(c) whether any of the Secured Money remains unpaid; and

(d) as to the necessity for or expediency of the stipulations or conditions subject to which any sale is to be made or the application of any purchase moneys paid to the Bank.

5.4 Not liable Neither the Bank nor its agent, or any Receiver, will be liable to account as mortgagee in possession for anything except actual receipts or be liable for any loss or realisation or for any negligence, default or omission for which a mortgagee in possession might be held liable.

5.5 Receipts Any receipt given by the Bank to any person who pays any moneys to the Bank in connection with the exercise of any of the Bank’s rights shall be an effective and complete discharge for that payment.

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6. Attorney 6.1 Appointment of attorney

The Customer irrevocably appoints the Bank and its officers and senior managers for the time being, severally to be the true and lawful attorney of the Customer and in the name of the Customer to do and execute all such acts, deeds, matters, things and documents as the Bank may reasonably consider necessary for protecting, completing and realising the security created by this deed (such power to be construed not strictly but in the widest sense) and that without limiting the foregoing the Customer’s attorney has power:

(a) to demand, collect, sue for, recover or receive all money and other property due to and receivable by the Customer under the Secured Property; or

(b) to do and execute all acts, deeds, matters, things and documents which the Customer covenants to do in this deed, or which in the opinion of the Bank are necessary or expedient to protect and, if an Event of Default occurs, realise the security provided by this deed; or

(c) if an Event of Default occurs, to litigate, settle or compromise claims disputes and matters touching the Secured Property; or

(d) to delegate the powers or any of them as are conferred by this deed upon the attorney and to appoint a substitute with the same or more limited powers and to revoke any such delegation or appointment; or

(e) if an Event of Default occurs, to dispose of or concur in disposing of all or any of the Secured Property to any person including the Bank at any time; or

(f) to take such steps and do such things as may be necessary to protect and preserve the interest of the Customer under the Secured Property and the interest of the Bank under this deed; or

(g) to recover from the Customer all moneys expended by the Bank under this clause and this deed.

6.2 Ratification The Customer hereby ratifies and confirms and agrees to ratify and confirm anything that the Customer’s attorney or his substitute lawfully does or causes to be done pursuant to this clause 6.

6.3 Third party No person dealing with the Customer’s attorney need see or enquire as to the propriety or expediency of any act, deed, matter, thing or document the Customer’s attorney executes, does or performs or purports to execute, do or perform in the Customer’s name by virtue of this clause 6.

7. Costs 7.1 Costs and expenses

The Customer must pay to the Bank on demand the amount of all reasonable costs, charges and expenses (including legal fees and disbursements calculated on a solicitor and own client basis) incurred by the Bank in connection with:

(a) the negotiation, preparation, execution and administration of this deed and the Facility Documents;

(b) the exercise of any rights in relation to this deed, the Insurance or the Secured Property;

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(c) the amendment, discharge or release of this deed and the Facility Documents or any of them, or the grant of any consent or waiver which the Bank may give, or any negotiations in connection with those matters; and

(d) the preservation or enforcement, or attempted or intended enforcement of the rights or remedies under any Facility Document or any of them.

8. Appointment of receiver and manager 8.1 Power of appointment

In addition to any other right, remedy, or power of the Bank herein expressed or implied, if an Event of Default occurs, the Bank may appoint in writing a receiver to be:

(a) a receiver of all or any part of the Secured Property and any income accruing or deriving therefrom; and/or

(b) a manager of all or any part of the Secured Property and any business of all or any part of the Secured Property; and/or

(c) a replacement for any Receiver who has been removed, retired or died.

8.2 Receiver agent of Customer The receiver will be deemed to be the agent of the Customer who will be solely responsible for the receiver’s acts or defaults whether such acts or defaults are done or made in relation to the exercise by the receiver of the receiver’s powers, rights, remedies or authorities pursuant to this clause 8, at law or otherwise.

8.3 Joint and several If the Bank appoints two or more persons as receiver, then unless the appointment expressly states otherwise, those persons will be deemed to have been appointed, and be entitled to act, jointly and severally.

8.4 Receiver’s powers A receiver must, subject to any limitations contained in the receiver’s appointment by the Bank, have the power:

(a) to enter onto or into the land or premises where all or any part of the Secured Property are kept and to take possession of and/or sell all or any part of the Secured Property on such terms as the receiver thinks fit and to exercise and enforce all or any of the powers, rights, remedies and authorities of the Bank and/or the receiver conferred pursuant to this deed or any law in respect of the Secured Property;

(b) to demand and recover any income accruing or deriving from all or any part of the Secured Property;

(c) to manage all or any part of the Secured Property;

(d) to bring, prosecute or compromise such proceedings as the receiver thinks fit in relation to all or any part of the Secured Property and to use the name of the Customer in such proceedings if necessary;

(e) to enter into, execute and perform all agreements, securities, discharges of securities, loans agreements and such other documents as the receiver thinks proper for the performance of the receiver’s powers, rights, remedies or authorities conferred pursuant to this clause 8 or at law;

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(f) to borrow and secure such moneys as the receiver thinks necessary to properly perform the receiver’s powers, rights, remedies or authorities conferred pursuant to this clause 8 or at law;

(g) to employ or engage (including employees of the receiver and consultants and professional advisers) as the receiver thinks necessary to properly perform the receiver’s powers, rights, remedies or authorities conferred pursuant to this clause 8 or at law; and

(h) generally to do or cause to be done anything to protect or enforce this deed and to recover the Secured Money.

8.5 Remuneration The remuneration of a receiver appointed by the Bank is to be determined by the Bank. Such remuneration shall form part of the Secured Money.

9. Continuing security 9.1 Continuing

This deed and the security created under this deed will remain in full force and effect and will be a running and continuing security for the payment of the Secured Money and for the due performance and observance of all and singular the covenants conditions and agreements contained or implied in this deed, or in any Facility Document, notwithstanding:

(a) that any sum or sums may from time to time be paid to the Bank; or

(b) that any current account between the Customer and the Bank may at any time be or appear to be in credit; or

(c) any settlement of account or any other matter or thing whatever,

until a discharge of this deed has been executed by the Bank. In the event of the avoidance for any reason whatsoever by statute or otherwise of any payment under this deed or any other document to the Bank or any attorney appointed hereunder or thereunder and irrespective of whether such avoidance operates from the time of such payment or from any later date then, notwithstanding any discharge or release given in respect of this deed or any other agreement or that (but for this provision) the Customer may have been or become entitled to be released from its obligations hereunder or thereunder, the rights and remedies of the Bank and in respect of the Secured Property shall be the same as if no such payment had been made, or discharge or release given.

9.2 No marshalling The Bank is not required to marshal, enforce or apply under or appropriate, recover or exercise:

(a) any security interest, guarantee or other entitlement held at any time by it; or

(b) any moneys or assets which it at any time holds or is entitled to receive,

before this deed is enforced.

10. Priority of security 10.1 Section 92 PLA

For the purposes only of section 92 of the PLA, the maximum sum up to which this assignment will rank in priority to any subsequent security is the amount set out in schedule 1.

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11. Liability in relation to the Insurance 11.1 Liability in relation to the Insurance

The Customer acknowledges and agrees that the Bank does not incur any liability or undertake any of the Customer’s obligations in respect of the Property, or in respect of any Insurance, merely because the Bank has taken security over that property. The Customer is and remains liable to perform all the obligations the Customer has assumed with respect to any Insurance. However, if the Customer fails to pay off a liability affecting the Insurance, or if the Customer does not do something the Customer is obliged to do in relation to the Insurance (whether or not required to do so under this deed), the Bank may step in and make that payment for the Customer, or perform that obligation on the Customer’s behalf. If the Bank does so, the Customer must indemnify the Bank on demand for all liabilities and losses and for each cost and expense the Bank incurs as a result. The Bank is not to be deemed to have entered possession of the Property by exercising the powers conferred on the Bank by this clause 11.1.

12. Indemnity 12.1 Enforcement

The Customer agrees to indemnify the Bank, any person acting as its agent, any person acting as attorney pursuant to this deed and any receiver appointed by each such person upon demand for all moneys expended by each such person pursuant to this deed and in the enforcement and protection of its rights and interests under this deed, and for all costs, losses and liabilities incurred or suffered by each such person in respect of the assignments (whether by way of security or otherwise) under this deed, non-performance by the Customer of its obligations in respect of the Insurance, any misrepresentations of the Customer made to any third party in respect of the Insurance or in respect of any other matter whatever. This clause will survive termination of this deed.

13. Re-assignment and transfer 13.1 Re-assignment and transfer

Provided that all of the Secured Money have been paid in full in cleared funds and free of any preference or other similar claim where any such payment may be void at law, and all of the obligations of the Customer under this deed or any collateral security have been duly observed and performed, the Bank will at the cost of the Customer execute a discharge of this deed and, if required, a reassignment and transfer of the Secured Property to the Customer.

14. Trustee 14.1 Constructive trustee

Any moneys received by the Customer under and pursuant to any part of the Secured Property shall be immediately delivered to the Bank for application on account of the Secured Money, and until so delivered any such moneys shall be held by the Customer as trustee for the Bank and must not be dealt with or disbursed by the Customer other than as instructed in writing by the Bank or otherwise consented to by the Bank. The trust created by this clause 14.1 will expire on the date that is 80 years from the date of this deed.

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14.2 Application On receipt of any moneys paid under or pursuant to any part of the Secured Property, the Bank will be entitled to apply such funds in the manner as provided for in this deed, or if nothing is provided, then in its discretion will be entitled to apply such funds in and to the reduction and repayment for the Secured Money (in part or whole).

15. Notices 15.1 Form and delivery of notice

All notices, requests, demands or other communications to or upon the parties in connection with this deed must be:

(a) given or made in writing;

(b) signed by a director, officer or other authorised person or the party giving such notice, or by a solicitor acting on behalf of such party; and

(c) served upon or delivered to the recipient personally, or sent by post or facsimile to the recipient at the address specified on the Details page at the beginning of this deed or if the recipient, by not less than seven days' notice in writing, notifies the other parties to this deed of another address, or facsimile number, then to that address, or facsimile number.

15.2 Receipt of notice A notice, request, demand or other communication will be deemed to have been received:

(a) in the case of personal delivery on a Business Day, on the date of that delivery;

(b) in the case of a letter posted by mail, on the second Business Day after posting; and

(c) in the case of a facsimile sent on a Business Day, during normal business hours in the place of receipt, upon the facsimile machine from which the facsimile was sent producing a transmission report which evidences that the facsimile was sent in its entirety to the facsimile number of the recipient notified for the purposes of this clause, or if transmission is after normal business hours in the place of receipt, it will be deemed to be received on the commencement of the next following Business Day.

16. Additional provisions - PPSA 16.1 Terminology

For the purposes of this clause 16:

(a) PPSR means the personal property securities register established and kept pursuant to section 139 of the PPSA; and

(b) other terminology used in this clause 16 which has a defined meaning in the PPSA has the same meaning in this deed.

16.2 PPSR registration The Customer agrees:

(a) that the Bank may register a financing statement on the PPSR in respect of the Secured Property for the purposes of recording the Bank’s security interest in the Secured Property;

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(b) to pay all costs, fees and charges (including registration fees) incurred by the Bank in doing so; and

(c) to do such things as the Bank reasonably requests in order to assist the Bank in protecting its security interest over the Secured Property.

16.3 Enforcement If the PPSA applies to the assignment and transfer under this deed, despite the exclusion under section 23(e)(ii) of the PPSA, or if part 9 of the PPSA applies despite the exclusion under section 105(b)(i) of the PPSA, or the Bank exercises rights under it’s security interest over proceeds, then the following applies:

(a) the Bank may apply the Secured Property towards satisfaction of the Secured Money even if the Bank does not have priority over other secured parties having a security interest therein;

(b) the Bank has no obligation to distribute any surplus to the Customer until:

(i) the Bank has received an amount equal to all costs incurred by the Bank in enforcing its rights;

(ii) the Bank is satisfied that any amounts payable to preferential creditors (if any) entitled to be paid by law in priority to the Bank or to the Customer have been paid;

(iii) the Bank is satisfied that the Customer has performed its obligations in this deed and the other Facility Documents;

(iv) the Customer has paid all the Secured Money to the Bank in full and is satisfied that no payment received by the Bank, whether the Customer or from any other person, is at risk of being set aside under any relevant laws; and

(v) the Bank is satisfied that the Bank has no contingent liabilities referable to this deed or any of the Facility Documents or to the exercise of the Bank’s rights;

(c) the debtor’s rights specified in section 107(2) of the PPSA (other than the debtor’s rights specified in sections 116 and 120(2) of the PPSA) do not apply, and the Customer agrees to waive those rights;

(d) the Customer does not require the Bank to provide copies of verification statements, and waives that requirement of the PPSA; and

(e) once an Event of Default has occurred, the Customer may not reinstate the security agreement under this deed by payment of any amount less than the total of all the Secured Money, and sections 133 and 134 of the PPSA shall not apply to the extent they may be inconsistent with this subclause.

17. Miscellaneous 17.1 Exercise of power

The Bank is not liable or accountable to the Customer or to any other person for any loss caused by:

(a) the exercise or attempted exercise of a power;

(b) the failure to exercise or any delay in exercising any power; or

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(c) the manner in which a power is exercised,

whether or not caused by the Bank’s negligence.

17.2 Credit The Customer will only be given credit for and the Bank will only be accountable for those moneys actually received by the Bank in cash, and then only after the full payment of all other claims and costs and expenses in respect of the Insurance, including the Bank’s.

17.3 Trust If the Customer has signed this deed as trustee of a trust the Customer acknowledges and agrees that:

(a) in exercising the Bank’s powers under this deed, any Mortgage or, other related security, or any agreement covered by this assignment, the Bank shall have full recourse to the Secured Property forming part of the assets of the trust; and

(b) the Bank stands in the Customer’s place with respect to all rights the Customer has, to be indemnified out of the trust assets or by any person (including a trust beneficiary).

17.4 Amendments No amendment to this deed will be effective unless it is in writing and signed by all the parties.

17.5 Remedies and waivers (a) No delay, grant of time, release, compromise, forbearance (whether partial or otherwise)

or other indulgence by the Bank in respect of any breach of the Customer’s obligations under this deed is to:

(i) operate as a waiver or prevent the subsequent enforcement of that obligation; or

(ii) be deemed a delay, grant of time, release, compromise, forbearance (whether partial or otherwise) or other indulgence in respect of, or a waiver of, any subsequent or other breach.

(b) The rights, powers and remedies in this deed are cumulative and not exclusive of any rights, powers and remedies provided by law or pursuant to any other contract or agreement between the parties.

(c) Any right or obligation intended to survive the termination of this deed will so survive such termination.

17.6 Assignment (a) (Bank may assign) Subject to any provision to the contrary in any Facility Document

which is expressed to override this clause, the Bank may assign and transfer all or any of its rights and obligations under this deed to any person or persons and may disclose to a potential Bank or any other person with whom it may wish to enter into contractual relations in connection with this deed or any Facility Document such information about the Customer as has been made available to the Bank generally.

(b) (Customer cannot assign) The Customer may not assign and transfer any of its rights and obligations under this deed without the prior written consent of the Bank.

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17.7 Acknowledgement The parties acknowledge and agree, for the purposes of section 11 of the Contractual Remedies Act 1979, that the remedies of damages and cancellation (in respect of the Insurance) shall not be enforceable against the Bank. As between the Customer and the Bank, no burden or liability for damages is to be assigned from the Customer to the Bank. In the event that the Bank is liable in damages, the Customer will remain liable for such damages, and will immediately upon demand by the Bank reimburse the Bank for that amount.

17.8 Counterparts This deed may consist of any numbers of counterparts and all counterparts taken together will be deemed to constitute one and the same instrument.

17.9 Governing law This deed will be governed by and construed in accordance with New Zealand law.

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Signing page

EXECUTED AND DELIVERED as a deed

Customer Signed by:

Name of director (print) Name of director (print)

In the presence of:

Witness Signature

Print Name

Occupation

Address

Bank Signed for and on behalf of TSB Bank Limited:

184493-:183 22

Schedule 1

Parties Name Short name Customer Notice Details

Name TSB Bank Limited Short name Bank Notice Details P O Box 240, New Plymouth

Property Address

Identifier

Section 92 PLA amount NZ$

Claim Details

184493-:183 23

Schedule 2– Notice of assignment of Insurance Claims

Date: To: (“Insurer”)

Customer Name (Customer):

Bank name:

Property: [insert address]

Insurance policy number:

Insurance policy date:

Claim number:

Nominated Account Number:

1. Insurance Policy: We refer to the insurance policy in respect of the Property which we are both parties to (together with any contract which may replace that document, the Insurance).

2. Assignment of Rights: Please note that by a Deed of Assignment (Insurance Claims) between the Customer and the Bank (“Deed of Assignment”), we have unconditionally and irrevocably assigned to the Bank to the maximum extent permissible at law and under the terms of the Insurance all of our right, title and interest, present or future, vested or contingent:

(a) with effect on the date of the Deed of Assignment, all of the Customer’s interest in the Benefits in respect of Claims; and

(b) with effect on the date on which any Further Claim is lodged, all of the Customer's interest in the Benefits in respect of that Further Claim,

and all our other rights, powers and benefits under or in connection with the Insurance including, but not limited to, all our rights to any cause of action or remedy which may have arisen or may in the future arise howsoever in relation thereto. To the extent that any of the Insurance or any of the Secured Property constitutes:

(a) Personal Property as defined in the Deed of Assignment (whether assignable or not); or

(b) property which is not Personal Property as defined in the Deed of Assignment and is not assignable (at law or under the terms of the Insurance),

the Customer has granted a security interest in the Secured Property as defined in the Deed of Assignment to the Bank as security for payment of the Secured Money as that term is defined in the Deed of Assignment and the due observance and performance of the Customer’s obligations in this deed and the Facility Documents as that term is defined in the Deed of Assignment.

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3. Incorporation of terms: Unless otherwise defined in this Notice, words and phrases defined in the Deed of Assignment have the same meaning when used in this Notice.

4. Payment of Moneys: Accordingly, until further notice to you from the Bank, we unconditionally and irrevocably direct you to name the Bank as insured and loss payee for all claims under the Insurance and to pay all moneys from time to time payable to us by you under or in connection with the Insurance to the following Nominated Account Number 15-3960-0899993-20. If the Bank notifies you, you are to pay all such moneys to such other account number that the Bank nominates and to the order of the Bank.

5. Limited Agency: Until such time as you receive notice from the Bank:

(a) The Bank has appointed us as limited agent with the power to;

(i) lodge any Claims or Further Claims that are entitled to under the Insurance;

(ii) do all things reasonably necessary to ensure that each Claim and Further Claim is accepted, including compliance with all procedures for the lodgement of Claims and Further Claims;

(iii) complete any documentation necessary to lodge and successfully pursue a Claim or Further Claim;

(iv) negotiate any Claim or Further Claim; and

(v) issue and receive notices under the Insurance on behalf of the Bank,

provided that in doing so, the we act in the best interests of the Bank and ourselves.

(c) We have no authority to bind the Bank and shall not attempt to bind the Bank in relation to:

(i) the compromise of, or settlement of, any Claims or Further Claims;

(ii) receiving any sums from you in respect of any Claims or Further Claims; or

(iii) any other matter relating to the Claim or Further Claim,

except in accordance with the written consent or instructions of the Bank.

6. No Enquiry: You need not be concerned to enquire:

(a) whether the security created by the Deed of Assignment has become enforceable;

(b) whether the powers the Bank or its agent is purporting to exercise have become exercisable;

(c) whether any of the Secured Money remain unpaid; and

(d) as to the application of any moneys paid to the Bank.

7. Receipt: Any receipt given by the Bank to you in connection with the exercise of any of the Bank’s rights shall be an effective and complete discharge for that payment.

8. Other Conditions: Please also note that under the terms of the Deed of Assignment:

(a) we must not vary, terminate or surrender the Insurance, or release you from any obligation under or in connection with the Insurance without the prior written consent of the Bank;

184493-:183 25

(b) if we default on certain of our obligations to the Bank, the Bank may become entitled to exercise all our rights under the Insurance at any time without notice or further demand of its intention to do so. Our consent is not required in these circumstances;

(c) The Bank does not assume any liability in respect of our obligations under the Insurance, and we remain solely responsible for the performance of those obligations;

(d) we have appointed the Bank our attorney for certain purposes in connection with the Insurance.

These instructions may not be changed without the Bank’s prior written consent.

Signed by the Customer:

Name of Customer (print)

In the presence of:

Witness Signature

Print Name

Occupation

Address

Consent of the Insurer

The Insurer consents to the assignment and transfer, despite any provision to the contrary contained in the Insurance.

Signed for and on behalf of the Insurer

Insurer