Collateral Debenture

Company Letterhead

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COLLATERAL DEBENTURE

THIS COLLATERAL DEBENTURE is made and entered into on this {{day}} day of {{month}}, {{year}}

BETWEEN:

{{debtor_company_name}}, a company duly incorporated and registered in accordance with the laws of {{jurisdiction}}, with registration number {{debtor_registration_number}} and having its registered office at {{debtor_address}} (hereinafter referred to as "the Debtor");

AND

{{lender_company_name}}, a company duly incorporated and registered in accordance with the laws of {{jurisdiction}}, with registration number {{lender_registration_number}} and having its registered office at {{lender_address}} (hereinafter referred to as "the Lender").

WHEREAS:

A. The Debtor is indebted to the Lender in the sum of {{amount_in_words}} ({{amount_in_figures}}) (hereinafter referred to as "the Secured Amount") arising from {{brief_description_of_debt}}.

B. The Debtor has agreed to grant a continuing security over its assets in favour of the Lender for the due performance of its obligations and repayment of the Secured Amount.

1. GRANT OF CHARGE

1.1. The Debtor hereby charges in favour of the Lender, as a continuing security for the payment of the Secured Amount and the performance of all other obligations of the Debtor to the Lender, all its present and future assets, undertakings, and property whatsoever and wheresoever situate, including but not limited to:

(a) all intellectual property rights, including but not limited to patents, trademarks, copyrights, and designs, whether registered or unregistered, presently owned or hereafter acquired by the Debtor;

(b) all equipment, machinery, fixtures, fittings, and office furniture presently owned or hereafter acquired by the Debtor;

(c) all stock in trade, inventory, and raw materials presently owned or hereafter acquired by the Debtor;

(d) all book debts, accounts receivable, and other choses in action presently owned or hereafter acquired by the Debtor;

(e) all bank accounts and cash in hand;

(f) all real property and immoveable assets, including all land and buildings, presently owned or hereafter acquired by the Debtor, located at {{property_addresses_or_description}}.

2. NATURE OF CHARGE

2.1. The charge created by this Debenture shall be a first fixed charge over {{list_of_fixed_charge_assets}}, and a first floating charge over all other assets of the Debtor.

3. COVENANTS BY THE DEBTOR

3.1. The Debtor covenants that it shall:

(a) not create or allow to exist any other mortgage, charge, lien, or other encumbrance over the Charged Assets without the prior written consent of the Lender;

(b) keep the Charged Assets in good repair and condition and adequately insured against all insurable risks with reputable insurers;

(c) permit the Lender or its agents to inspect the Charged Assets at all reasonable times;

(d) notify the Lender immediately of any event that may adversely affect the value or title of the Charged Assets.

4. EVENTS OF DEFAULT

4.1. The Secured Amount shall immediately become due and payable, and the security hereby constituted shall become enforceable, upon the occurrence of any of the following events (each an “Event of Default”):

(a) if the Debtor fails to pay any part of the Secured Amount when due;

(b) if the Debtor breaches any covenant or obligation under this Debenture or any other agreement with the Lender;

(c) if the Debtor becomes insolvent, enters into liquidation (whether voluntary or compulsory), or has a receiver or administrator appointed over its assets;

(d) if any distress or execution is levied upon the Debtor’s assets or any part thereof.

5. ENFORCEMENT OF SECURITY

5.1. Upon the occurrence of an Event of Default, the Lender shall be entitled, without prejudice to any other rights or remedies it may have, to:

(a) appoint a receiver or manager over all or any of the Charged Assets;

(b) take possession of and realize all or any of the Charged Assets by public auction or private treaty, without formal notice or consent from the Debtor;

(c) exercise all rights of an owner in respect of the Charged Assets.

6. APPLICATION OF PROCEEDS

6.1. All moneys realized from the enforcement of this Debenture shall be applied in the following order of priority:

(a) in payment of all costs and expenses incurred by the Lender in enforcing this Debenture;

(b) in payment of the Secured Amount and all interest due thereon;

(c) any surplus remaining shall be paid to the Debtor or to such other person as may be lawfully entitled thereto.

7. GOVERNING LAW AND JURISDICTION

7.1. This Debenture shall be governed by and construed in accordance with the laws of {{governing_law_jurisdiction}}.

7.2. The parties hereby submit to the exclusive jurisdiction of the courts of {{jurisdiction_for_disputes}} for the resolution of any disputes arising out of or in connection with this Debenture.

8. GENERAL PROVISIONS

8.1. This Debenture constitutes the entire agreement between the parties and supersedes all prior agreements, understandings, and negotiations, whether written or oral, relating to the subject matter hereof.

8.2. No amendment or variation of this Debenture shall be valid unless in writing and signed by both parties.

8.3. This Debenture may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have caused this Collateral Debenture to be executed on the date first above written.

Signature Block

SIGNED by the Debtor:

_____________________________

Name: {{debtor_signatory_name}}

Capacity: {{debtor_signatory_capacity}}

Date: {{debtor_signing_date}}

SIGNED by the Lender:

_____________________________

Name: {{lender_signatory_name}}

Capacity: {{lender_signatory_capacity}}

Date: {{lender_signing_date}}