Hypothec on Movables

Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

DEED OF HYPOTHEC ON MOVABLE PROPERTY

This Deed of Hypothec is made and entered into on this {{day}} day of {{month}}, {{year}}

BY AND BETWEEN:

{{hypothecary_name}} (Registration Number: {{hypothecary_registration_number}}), a company duly incorporated and existing under the laws of {{jurisdiction}}, with its principal place of business at {{hypothecary_address}} (hereinafter referred to as "the Hypothecary")

AND

{{debtor_name}} (Registration Number: {{debtor_registration_number}}), a company duly incorporated and existing under the laws of {{jurisdiction}}, with its principal place of business at {{debtor_address}} (hereinafter referred to as "the Debtor")

WHEREAS

A. The Hypothecary has granted to the Debtor a loan/financial facility in the amount of {{loan_amount}} ({{loan_amount_words}}) (hereinafter referred to as "the Principal Debt"), as more fully described in the Loan Agreement dated {{loan_agreement_date}}.

B. The Debtor desires to secure the due and punctual payment of the Principal Debt and all other amounts owing by the Debtor to the Hypothecary in terms of the Loan Agreement, by hypothecating certain movable property as security.

NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. HYPOTHEC GRANTED: The Debtor hereby hypothecates, pledges, and binds in favour of the Hypothecary, all its right, title, and interest in and to the movable property described in Schedule A hereto (hereinafter referred to as "the Hypothecated Movables").

2. PURPOSE OF HYPOTHEC: This hypothec is granted as continuing covering security for the due and punctual payment of the Principal Debt and all other amounts and obligations, whether present or future, contingent or actual, owed by the Debtor to the Hypothecary, arising out of or in connection with the Loan Agreement.

3. WARRANTIES BY DEBTOR: The Debtor warrants that:

3.1. It is the sole and unencumbered owner of the Hypothecated Movables.

3.2. The Hypothecated Movables are free from any prior pledges, hypothecs, liens, or other encumbrances whatsoever, save for any listed in Schedule B.

3.3. It has the full power and authority to enter into this Deed of Hypothec and to hypothecate the Hypothecated Movables.

4. POSSESSION AND CONTROL: Notwithstanding this hypothec, the Debtor shall retain possession and control of the Hypothecated Movables, subject to the terms of this Deed of Hypothec and the Loan Agreement.

5. OBLIGATIONS OF DEBTOR:

5.1. The Debtor shall maintain the Hypothecated Movables in good order and repair at its own cost.

5.2. The Debtor shall not sell, lease, alienate, encumber, or dispose of the Hypothecated Movables, or any part thereof, without the prior written consent of the Hypothecary.

5.3. The Debtor shall insure the Hypothecated Movables against all risks, including but not limited to fire, theft, and accidental damage, for their full replacement value, with an insurer acceptable to the Hypothecary. The policy shall note the Hypothecary’s interest.

5.4. The Debtor shall permit the Hypothecary or its authorised representatives to inspect the Hypothecated Movables at all reasonable times.

6. EVENT OF DEFAULT: Should the Debtor fail to pay any amount due under the Loan Agreement on its due date, or breach any other term or condition of the Loan Agreement or this Deed of Hypothec, the Hypothecary shall be entitled, without prejudice to any other rights it may have in law, to:

6.1. Take possession of the Hypothecated Movables.

6.2. Sell the Hypothecated Movables by public auction or private treaty, and apply the proceeds towards the satisfaction of the Principal Debt and all other amounts due. Any surplus shall be paid to the Debtor, and any shortfall shall remain due and payable by the Debtor.

7. CESSION OF RIGHTS: This hypothec and all rights and obligations hereunder may be ceded or assigned by the Hypothecary, in whole or in part, without the consent of the Debtor.

8. GOVERNING LAW AND JURISDICTION: This Deed of Hypothec shall be governed by and construed in accordance with the laws of {{jurisdiction}}. The parties hereby consent to the non-exclusive jurisdiction of the {{court_name}}.

SCHEDULE A: DESCRIPTION OF HYPOTHECATED MOVABLES

{{item_1_description}}, Serial Number: {{item_1_serial_number}}, Value: {{item_1_value}}

{{item_2_description}}, Serial Number: {{item_2_serial_number}}, Value: {{item_2_value}}

{{item_n_description}}, Serial Number: {{item_n_serial_number}}, Value: {{item_n_value}}

(Add more items as necessary with full descriptions, serial numbers, and estimated values)

SCHEDULE B: PRIOR ENCUMBRANCES (IF ANY)

{{encumbrance_1_description}}

{{encumbrance_2_description}}

(List all prior security interests, liens, or other encumbrances on the Hypothecated Movables, or state 'None')

Acknowledgement and Acceptance

The Debtor acknowledges and accepts the terms and conditions of this Deed of Hypothec.

THUS DONE AND SIGNED at {{city}} on this {{signing_day}} day of {{signing_month}}, {{signing_year}}.

SIGNATURES

_____________________________

For: {{hypothecary_name}}

Name: {{hypothecary_authorised_signatory_name}}

Designation: {{hypothecary_authorised_signatory_designation}}

_____________________________

For: {{debtor_name}}

Name: {{debtor_authorised_signatory_name}}

Designation: {{debtor_authorised_signatory_designation}}

WITNESSES:

1. _________________________ (Name: {{witness_1_name}})

2. _________________________ (Name: {{witness_2_name}})