Debenture

This document is a debenture agreement between a Creditor and a Debtor. The agreement outlines various terms and conditions regarding the debtor's obligations and the creditor's rights. The following are the key points covered in the agreement:

Definitions:

The document begins with definitions of important terms used throughout the agreement. These include "Assets," "Floating Charge Assets," "Intellectual Property," "Intellectual Property Rights," "Land," "Receivables," "Receiver," "Secured Sums," and "Securities."

Debtor's Covenant to Pay:

The debtor agrees to pay or discharge all money, liabilities, interests, commission, fees, charges, costs, and expenses owed to the creditor. This includes amounts due currently or in the future, secured or unsecured, and payable to third parties.

Charges Debtor Creates:

The debtor creates various charges to secure the payment of the secured sums. These include a legal mortgage on land, fixed charges, and a floating charge. The floating charge covers assets not effectively charged by fixed charges.

Collecting Receivables:

The debtor is responsible for collecting and realising all receivables and promptly paying the received money into the designated bank account of the creditor. The debtor cannot assign or waive receivables without the creditor's consent.

Negative Pledge and Other Restrictions:

The debtor is prohibited from creating any fixed or floating security over assets or disposing of intellectual property rights without the creditor's prior written consent.

Further Assurance:

The debtor must execute and deliver any documents required by the creditor to secure payment or create, enhance, or perfect any fixed security over assets.

Continuing Security:

This debenture remains a continuing security for the creditor, regardless of any settlement of account or other matters, and is in addition to any other rights, remedies, or securities the creditor may have.

Insurance:

The debtor must insure all insurable assets for their full replacement value and maintain other necessary insurances.

Property Obligations:

The debtor must keep all charged assets in good repair and notify the creditor of any potential issues that could affect the assets or the debtor's business. The debtor is liable for any claims or expenses resulting from failure to comply with obligations related to the assets.

Leases, Possession, and Consolidation of Mortgages:

The debtor cannot lease land or part with its possession without the creditor's consent. The provision regarding the consolidation of mortgages does not apply to this debenture.

Powers of Sale, Leasing, and Accepting Surrenders:

The creditor has statutory powers of sale, leasing, accepting surrenders, and severing fixtures from land. These powers can be exercised by the creditor or a receiver appointed by the creditor.

Opening New Accounts:

The creditor has the right to close the debtor's accounts and open new ones.

Appointment of a Receiver or Administrator:

The creditor has the power to appoint a receiver or administrator if payment of the secured sums is demanded or certain events occur.

Power of Attorney:

If the creditor is not entitled to take certain actions, the debtor must undertake those actions or grant a power of attorney to the creditor.

Costs, Charges, and Liabilities:

The debtor is responsible for paying the creditor's costs and expenses incurred in connection with the agreement and other finance documents.

Set-Off:

The debtor must pay the creditor's costs and expenses incurred in connection with the agreement and other finance documents upon demand.

In summary, this debenture agreement establishes the creditor's rights and the debtor's obligations regarding the payment of secured sums and the creation of charges over assets. It also includes provisions related to collecting receivables, insurance, property obligations, leases, powers of sale.

How to use this Document?

How to Use This Document: Steps in SEO-Friendly Format

1. Understand the Definitions:

Familiarise yourself with the key terms and definitions used in this debenture agreement, such as "Assets," "Floating Charge Assets," "Intellectual Property," "Land," "Receivables," "Secured Sums," and "Securities."

2. Comprehend the Debtor's Covenant to Pay:

Learn about the debtor's commitment to pay or discharge all current and future debts and liabilities to the creditor upon written demand, including interests, commission, fees, charges, costs, and expenses.

3. Grasp the Charges Debtor Creates:

Understand the charges created by the debtor, including legal mortgages on land, fixed charges, and floating charges on assets, as well as the potential conversion or reversion of the floating charge.

4. Be Aware of Collecting Receivables:

Know that the debtor must collect and pay all receivables into designated accounts, hold the funds on trust, and refrain from assigning or waiving rights without prior consent.

5. Understand Negative Pledge and Other Restrictions:

Recognise that the debtor must obtain written consent before creating any fixed or floating security, selling intellectual property rights, or parting with possession of assets.

6. Acknowledge Further Assurance Requirements:

Understand that the debtor must execute necessary documents to secure payment, enhance or perfect fixed security, vest assets in the creditor, or comply with any requests related to the debenture.

7. Recognise the Continuing Security:

Realise that this debenture remains a continuous security for the creditor, even after settling accounts, and doesn't affect any other rights, remedies, or securities held by the creditor.

8. Understand Insurance Obligations:

Comprehend the debtor's responsibility to insure all assets adequately and maintain the necessary insurance cover, including making timely premium payments or allowing the creditor to arrange insurance if necessary.

9. Grasp Property Obligations:

Understand the debtor's obligations to keep charged assets in good repair, promptly notify the creditor of any environmental concerns, and indemnify the creditor for any non-compliance-related expenses.

10. Be Aware of Leases, Possession, and Consolidation of Mortgages:

Recognise that the debtor requires written consent for any leasing, possession, or sharing of occupation of land, while consolidation of mortgages does not apply.

11. Understand Powers of Sale, Leasing, and Accepting Surrenders:

Realise that the creditor holds statutory powers of sale, leasing, and accepting surrenders, allowing actions after the debenture becomes enforceable and extending to fixtures and separate sales.

12. Know the Process for Opening New Accounts:

Understand the creditor's right to close existing accounts and open new ones, and the treatment of payments received after receiving notice.

13. Familiarise Yourself with the Appointment of a Receiver or an Administrator:

Understand the creditor's power to appoint a receiver or administrator upon demanding payment or when other proceedings occur, and the liability, remuneration, and subsequent appointments of the receiver.

14. Recognise the Power of Attorney:

Acknowledge the debtor's agreement to take necessary actions or grant a power of attorney to the creditor, subject to an Event of Default or failure to comply with obligations.

15. Understand Costs, Charges, and Liabilities:

Know that the debtor is responsible for paying the creditor's costs, expenses, and legal fees associated with negotiating, preparing, executing, and perfecting the agreement and related documents.

16. Grasp Set-Off Requirements:

Understand that the debtor must pay the creditor's costs and expenses within three business days of demand, including those incurred during negotiation, preparation, execution, and perfection of the agreement and other finance documents.