Agreement of Movable Hypothec Without Delivery

{{company_name}} Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

AGREEMENT OF MOVABLE HYPOTHEC WITHOUT DELIVERY

This Agreement is made and entered into on this {{day}} day of {{month}}, {{year}} (the “Effective Date”),

BETWEEN:

{{hypothecary_creditor_name}} a company duly incorporated under the laws of [South Africa/Kenya/Nigeria/etc.] with registration number {{creditor_registration_number}}, and having its registered office at {{creditor_address}} (hereinafter referred to as the “Hypothecary Creditor”);

AND

{{hypothecator_name}} a company duly incorporated under the laws of [South Africa/Kenya/Nigeria/etc.] with registration number {{hypothecator_registration_number}}, and having its registered office at {{hypothecator_address}} (hereinafter referred to as the “Hypothecator”).

WHEREAS, the Hypothecator is indebted to the Hypothecary Creditor in the principal sum of {{loan_amount}} ({{loan_amount_words}}) {{currency}} (the “Principal Debt”), repayment of which is secured by this Agreement.

WHEREAS, the Hypothecator desires to hypothecate movable property without delivery to the Hypothecary Creditor as security for the Principal Debt and any other obligations that may arise from their relationship.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

1. DEFINITIONS

1.1 “Hypothecated Assets” means the movable property described in Schedule A hereto.

1.2 “Principal Debt” means the amount specified above, together with all interest, costs, charges, and expenses owing by the Hypothecator to the Hypothecary Creditor, whether arising from the loan agreement dated {{loan_agreement_date}} or otherwise.

1.3 “Event of Default” means any of the events described in Clause 6 herein.

2. OBJECT OF HYPOTHEC

2.1 The Hypothecator hereby hypothecates to the Hypothecary Creditor, without delivery, the movable assets described in Schedule A attached hereto (the “Hypothecated Assets”), as security for the due and punctual payment of the Principal Debt and the due performance of all obligations of the Hypothecator to the Hypothecary Creditor.

2.2 The Hypothecator warrants that it is the sole and absolute owner of the Hypothecated Assets and that the Hypothecated Assets are free from any other encumbrances, charges, or liens whatsoever, save for those specifically disclosed to and approved in writing by the Hypothecary Creditor.

3. POSSESSION AND USE OF HYPOTHECATED ASSETS

3.1 Notwithstanding the hypothec, the Hypothecator shall retain possession of the Hypothecated Assets and shall be entitled to use them in the ordinary course of its business, provided that such use does not diminish their value or prejudice the security of the Hypothecary Creditor.

3.2 The Hypothecator undertakes to maintain the Hypothecated Assets in good order and repair at its own cost and expense and shall not alienate, encumber, lease, or dispose of the Hypothecated Assets without the prior written consent of the Hypothecary Creditor.

4. INSURANCE

4.1 The Hypothecator shall, at its own expense, insure the Hypothecated Assets against all risks, including but not limited to loss, theft, damage, and destruction, for their full replacement value, with an insurer acceptable to the Hypothecary Creditor.

4.2 The insurance policy shall note the Hypothecary Creditor’s interest and shall provide that all proceeds of such insurance shall be payable directly to the Hypothecary Creditor in the event of loss or damage, to be applied towards the reduction of the Principal Debt.

5. OBLIGATIONS OF THE HYPOTHECATOR

5.1 The Hypothecator undertakes to promptly pay the Principal Debt and all interest, fees, and charges associated therewith, in accordance with the terms of the underlying loan agreement.

5.2 The Hypothecator shall permit the Hypothecary Creditor or its duly authorized representatives to inspect the Hypothecated Assets at all reasonable times upon prior notice.

5.3 The Hypothecator shall notify the Hypothecary Creditor immediately of any event or circumstance that may adversely affect the value or condition of the Hypothecated Assets or the Hypothecary Creditor’s security interest therein.

6. EVENT OF DEFAULT

6.1 An Event of Default shall occur if:

(a) The Hypothecator fails to pay any portion of the Principal Debt when due;

(b) The Hypothecator breaches any term or condition of this Agreement or any other agreement between the parties;

(c) Any representation or warranty made by the Hypothecator herein proves to be false or misleading;

(d) The Hypothecator becomes insolvent, is placed under liquidation, business rescue, or any similar proceedings.

6.2 Upon the occurrence of an Event of Default, the Hypothecary Creditor shall be entitled, without prejudice to any other rights or remedies it may have, to immediately take possession of the Hypothecated Assets, sell them, and apply the proceeds towards the satisfaction of the Principal Debt and all related costs and expenses. The Hypothecator hereby grants the Hypothecary Creditor an irrevocable power of attorney to effect such sale.

7. GOVERNING LAW AND JURISDICTION

7.1 This Agreement shall be governed by and construed in accordance with the laws of [South Africa/Kenya/Nigeria/etc.].

7.2 The parties hereby consent to the non-exclusive jurisdiction of the {{court_name}} in respect of any dispute arising out of or in connection with this Agreement.

8. ENTIRE AGREEMENT

8.1 This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior discussions, negotiations, and agreements, whether oral or written.

SCHEDULE A: DESCRIPTION OF HYPOTHECATED ASSETS

List of Movable Assets Hypothecated:

1. Item: {{asset_1_description}}, Serial/ID Number: {{asset_1_serial_number}}, Estimated Value: {{asset_1_value}} {{currency}}

2. Item: {{asset_2_description}}, Serial/ID Number: {{asset_2_serial_number}}, Estimated Value: {{asset_2_value}} {{currency}}

3. Item: {{asset_3_description}}, Serial/ID Number: {{asset_3_serial_number}}, Estimated Value: {{asset_3_value}} {{currency}}

(Add more as required)

SIGNATURES

IN WITNESS WHEREOF, the parties have executed this Agreement on the Effective Date.

For the Hypothecary Creditor:

_______________________________

Name: {{creditor_signer_name}}

Title: {{creditor_signer_title}}

Company: {{hypothecary_creditor_name}}

Date: {{creditor_signature_date}}

For the Hypothecator:

_______________________________

Name: {{hypothecator_signer_name}}

Title: {{hypothecator_signer_title}}

Company: {{hypothecator_name}}

Date: {{hypothecator_signature_date}}