5. OWNERSHIP OF PRODUCTS / SECURITY INTEREST
(1) In the Terms and Conditions, PPSA means Personal Property Securities Act 1999, as amended from time to time.(2) Unless the context otherwise requires, terms and expressions in this Section 5 that are defined in the PPSA will have the same meaning in this Section 5 as in the PPSA.(3) In the Terms and Conditions Insolvency Event means the happening of any of these events in relation to a party (Defaulting Party):
(a) the Defaulting Party enters into a scheme or compromise with its creditors;
(b) the Defaulting Party suspends payment of its debts;
(c) the Defaulting Party is unable to pay its debts when they fall due, or is presumed unable to pay its debts in accordance with any applicable legislation;(d) where the Defaulting Party is a company:
(i) an application is made (which is not withdrawn, stayed or dismissed within 14 days of being made) to a court for an order, or an order is made, or an effective resolution is passed or legal proceedings issued (other than a vexatious or frivolous proceeding which is withdrawn, stayed or dismissed within 14 days of being issued), or any corporate action is taken, notice is given or other step is taken for the dissolution or reorganisation of the Defaulting Party;
(ii) an encumbrancer takes possession, or a trustee, receiver, receiver and manager, administrator, liquidator, provisional liquidator, inspector under any companies or securities legislation, or similar official, is appointed in respect of the Defaulting Party or the whole or any material part of its assets, or steps are taken or threatened with a view to any such appointment;
(iii) the Defaulting Party has committed an act of bankruptcy, has been adjudicated bankrupt, or made an assignment of property or composition of debts under any law relating to bankruptcy, or (in accordance with Part 5 of the Insolvency Act 2006) has entered into a no asset procedure;
(iv) the Defaulting Party is declared to be a corporation at risk under the Corporations (Investigation and Management) Act 1989;(v) any recommendation is made by the Financial Markets Authority to the Minister of the Crown who is responsible for administration of the Corporations (Investigation and Management) Act 1989 that the Defaulting Party or any associated person of the Defaulting Party be placed in statutory management under that Act;
(vi) a statutory or judicial manager is appointed over all or any of the assets of the Defaulting Party; or
(vii) the Defaulting Party ceases or threatens to cease to carry on all or any material part of its business or operations; or
(e) an event happens analogous to an event specified in Sections 5.1(3)(a) to 5.1(3)(d) to which the law of another jurisdiction applies and the event has an effect in that jurisdiction similar to the effect which the event would have had if the law of New Zealand applied.
5.2 Granting security interest
The Buyer grants Philips a security interest in the present and after-acquired Products, the proceeds of resale of, and all present and future accessions and accessories to, the Products as security for all amounts owing by the Buyer to Philips and performance of the Buyer's obligations under these Terms and Conditions. The Buyer will promptly do all things (including where necessary signing any other documents) and provide all information necessary to enable Philips to perfect and maintain the perfection of such security interest (including by registration of a financing statement under the PPSA).
5.3 When title passes
Title in the Products supplied by Philips to the Buyer does not pass to the Buyer until:(1) the money owing for those Products; and(2) any other money owing by the Buyer to Philips,has been paid (whether or not the Products are delivered at different times, are the subject of separate invoices or, after delivery, may be determined by Philips to be the subject of a specific invoice).
5.4 Obligations of the Buyer
Until the Products have been paid for in full, the Buyer:(1) must properly store, protect and insure the Products including storing them separately and in a manner that clearly identifies them as the property of Philips;(2) must return any unpaid-for Products to Philips on demand(3) must not sell the Products, other than in the ordinary course of its business, at arms' length and for the full market value of the Products; and(4) must not permit a security interest to be created or registered over the Products in priority to the security interest held by Philips.
5.5 Balance sale price remains a debt
If the sale price of all Products sold to the Buyer is greater than the sum of all payments actually received by Philips in respect of the Products, the difference remains a debt owing by the Buyer to Philips.
5.6 Allocation of payments from the Buyer to Philips
Any payment received from the Buyer may be applied by Philips to all or part of the amount owing for any Product as Philips sees fit irrespective of whether that payment is intended by the Buyer to be for particular Product or in respect of a particular invoice.
5.7 Insolvency of the Buyer
If the Buyer suffers an Insolvency Event, without prejudice to any other rights of Philips (including the rights set out in Section 5.8(1) below):(1) the Buyer’s right to sell the Products in the ordinary course of business and any other rights of the Buyer in respect of the Products immediately cease; and(2) the Buyer must immediately return to Philips the Products in which title has not passed.
5.8 Philips’ authority to inspect and re-take possession
(1) The Buyer irrevocably authorises Philips (or its representative) at any time, to enter any premises upon which the Products are stored to enable Philips to inspect the Products (including any records pertaining to the Products) and, if the Buyer has breached any of the Terms and Conditions (including but not limited to its payment obligations towards Philips), gives Philips reason to believe that it will not fulfil any or part of its payment obligations, or suffers an Insolvency Event, to exercise any and all remedies afforded to a secured party by Part 9 of the PPSA and enter any building or premises owned, occupied or used by the Buyer, to search for and re-take possession of the Products. The Buyer agrees to fully cooperate with Philips in order to enable Philips (or its representative) to re-take possession of the Products.(2) If Philips enters any premises for the purpose of re-taking possession of the Products, and incurs any liability to any person in connection with the entry or re-taking possession, the Buyer indemnifies Philips against that liability.
5.9 Products supplied on credit
(1) The provisions of this Section 5 apply despite any arrangement between the parties under which Philips grants the Buyer credit. Where Philips grants the Buyer credit for a specific period, the credit period is for that period or until the resale of the Products by the Buyer or their use by the Buyer in a manufacturing or construction process of its own or a third party, whichever is the earlier.(2) Philips may commence legal action against the Buyer if the Products are not paid for within the Philips’ usual credit terms or any separate arrangement for credit made by Philips with the Buyer although property in the Products has not passed to the Buyer.
The Buyer agrees that sections 114(1)(a), 117(1)(c), 133 and 134 of the PPSA will not apply on the enforcement by Philips of any security interest created or provided for by these Terms and Conditions. The Buyer also waives any rights it may have under sections 116, 119, 120(2), 121, 125, 126, 127, 129 and 131 of the PPSA on such enforcement. The Buyer also waives any right it may have to receive from Philips a copy of any financing statement, financing change statement or verification statement that is registered, issued or received at any time in relation to these Terms and Conditions.
5.11 Change of Name
The Buyer will not change its name without giving Philips 14 days' prior notice of what its new name will be.
The Buyer confirms that there has been no agreement between Philips and the Buyer that any security interest created by these Terms and Conditions shall in any way be subordinated to the security interest of any other person.