Hypothec on Movables

Company Letterhead

{{company_name}}

{{company_address}}

Phone: {{phone}}

Email: {{email}}

Website: {{website}}

DEED OF HYPOTHEC ON MOVABLES

This Deed of Hypothec 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 its principal place of business at {{debtor_company_address}} (hereinafter referred to as “the Debtor”);

AND

{{creditor_company_name}}, a company duly incorporated and registered in accordance with the laws of {{jurisdiction}}, with its principal place of business at {{creditor_company_address}} (hereinafter referred to as “the Creditor”).

BACKGROUND

A. The Debtor is indebted to the Creditor in the amount of {{loan_amount}} ({{loan_amount_words}}) (hereinafter referred to as “the Principal Debt”).

B. The Debtor desires to provide security for the due repayment of the Principal Debt and all other amounts owing to the Creditor in terms of the underlying loan agreement.

C. The Debtor has agreed to hypothecate the movable assets described herein to the Creditor as security for the Principal Debt.

HYPOTHECATION OF MOVABLES

The Debtor hereby hypothecates, pledges, and binds in favour of the Creditor, as a first and continuing security for the due repayment of the Principal Debt and all other amounts and obligations due to the Creditor, the movable assets specified in Schedule A annexed hereto (hereinafter referred to as “the Hypothecated Assets”).

The Debtor warrants that it is the sole and unencumbered owner of the Hypothecated Assets and that the Hypothecated Assets are free from any other charges, liens, or encumbrances whatsoever.

POSSESSION OF HYPOTHECATED ASSETS

Notwithstanding the hypothecation, the Debtor shall retain possession and use of the Hypothecated Assets, provided that such possession and use shall be exercised with due care and in a manner that does not diminish the value of the Hypothecated Assets.

The Debtor undertakes not to alienate, encumber, or dispose of the Hypothecated Assets without the prior written consent of the Creditor.

DEBTOR’S UNDERTAKINGS

The Debtor undertakes to:

a. Insure the Hypothecated Assets against all risks, including but not limited to loss, damage, and theft, for their full replacement value, with the Creditor’s interest noted on the policy.

b. Maintain the Hypothecated Assets in good order and repair, at its own cost.

c. Allow the Creditor or its authorised representatives access to inspect the Hypothecated Assets at all reasonable times.

d. Notify the Creditor immediately of any event that may affect the value or condition of the Hypothecated Assets.

DEFAULT

Should the Debtor fail to pay the Principal Debt or any other amount due to the Creditor on the due date, or breach any other term or condition of the underlying loan agreement or this Deed of Hypothec, the Creditor shall be entitled, without prejudice to any other rights or remedies it may have, to:

a. Take possession of the Hypothecated Assets.

b. Sell the Hypothecated Assets, either by public auction or private treaty, and apply the proceeds of such sale towards the satisfaction of the Principal Debt and all costs associated with the sale.

c. Institute legal proceedings for the recovery of the Principal Debt.

GOVERNING LAW AND JURISDICTION

This Deed of Hypothec shall be governed by and construed in accordance with the laws of {{jurisdiction}}.

The parties hereto consent to the non-exclusive jurisdiction of the {{court_name}} Court for the purpose of any legal proceedings arising out of or in connection with this Deed of Hypothec.

GENERAL

a. This Deed of Hypothec constitutes the entire agreement between the parties with regard to the hypothecation of the Hypothecated Assets.

b. No variation, addition, or consensual cancellation of this Deed of Hypothec shall be of any force or effect unless reduced to writing and signed by both parties.

c. A certificate signed by any director or manager of the Creditor, whose appointment need not be proved, as to the amount of the Debtor’s indebtedness to the Creditor and as to the fact that such amount is due and payable, shall be prima facie proof of the contents thereof for the purpose of obtaining judgment or any other order against the Debtor.

d. The addresses stated herein shall serve as the parties’ chosen domicilia citandi et executandi for all purposes.

SCHEDULE A: HYPOTHECATED ASSETS

Description of Assets:

1. Asset Name: {{asset_1_name}}, Serial Number: {{asset_1_serial_number}}, Value: {{asset_1_value}}

2. Asset Name: {{asset_2_name}}, Serial Number: {{asset_2_serial_number}}, Value: {{asset_2_value}}

3. Asset Name: {{asset_3_name}}, Serial Number: {{asset_3_serial_number}}, Value: {{asset_3_value}}

(Add more as required)

SIGNATURES

THUS DONE AND SIGNED at {{place_of_signing}} on the day and year first above written.

_____________________________

For and on behalf of the Debtor

Name: {{debtor_signatory_name}}

Designation: {{debtor_signatory_designation}}

_____________________________

For and on behalf of the Creditor

Name: {{creditor_signatory_name}}

Designation: {{creditor_signatory_designation}}

WITNESSES:

1. Name: {{witness_1_name}}

Signature: _________________

2. Name: {{witness_2_name}}

Signature: _________________