HYPOTHECATION AGREEMENT
This Hypothecation Agreement (this "Agreement") is made at __________ on __________.
BETWEEN
__________, __________, of __________, PAN __________ (the "Borrower");
AND
__________, of __________ (the "Lender"), __________.
The Borrower and the Lender are each a "Party" and together the "Parties".
RECITALS
A. __________
B. As security for repayment of the amount described in Recital A, the Borrower has agreed to hypothecate to the Lender the movable assets described in Schedule I, without parting with their possession.
NOW THIS AGREEMENT WITNESSES as follows.
- HYPOTHECATION
1.1 The Borrower hereby hypothecates to the Lender, by way of first charge, the movable assets described in Schedule I (the "Hypothecated Assets") as continuing security for the due repayment of __________ and all interest, costs and other sums payable under the facility described in Recital A.
1.2 This hypothecation is a charge only. It does not transfer ownership of, or possession in, the Hypothecated Assets to the Lender, and the Borrower continues to hold and use them subject to the terms of this Agreement. Nothing in this Agreement constitutes a pledge, and no possession of the Hypothecated Assets passes to the Lender at any time before enforcement under clause 8.
- THE HYPOTHECATED ASSETS
2.1 The Hypothecated Assets are described in Schedule I and are ordinarily kept at __________. The Borrower shall not remove them from that location otherwise than as clause 4 permits.
2.2 The Borrower warrants that it is the absolute owner of the Hypothecated Assets, that they are free of any prior charge, lien or encumbrance except as disclosed to the Lender in writing before this Agreement, and that it has full power to hypothecate them as provided in this Agreement.
- COMPANIES ACT CHARGE REGISTRATION
3.1 __________
- USE AND DEALINGS
4.1 __________
4.2 The Borrower shall keep the Hypothecated Assets in good condition and repair, shall not allow any statutory or possessory lien to arise over them for unpaid dues, and shall promptly pay all taxes, duties and other charges in respect of them.
4.3 Where the Hypothecated Assets include a motor vehicle, the Borrower shall procure the Lender’s hypothecation to be endorsed on the vehicle’s registration certificate with the registering authority under the Motor Vehicles Act, 1988, and shall not have that endorsement removed until the secured amount is repaid in full.
- INSURANCE
5.1 __________
- INSPECTION AND INFORMATION
6.1 __________
6.2 The Borrower shall notify the Lender promptly in writing of any loss, damage, seizure or attachment affecting the Hypothecated Assets, and of any change in the location stated in clause 2.1.
- FURTHER ASSURANCE
7.1 The Borrower shall, at its own cost, execute such further documents and do such further acts as the Lender may reasonably require to perfect or protect the security created by this Agreement, including for the Companies Act and CERSAI filings referred to in the Registration part of this Agreement's formalities.
- DEFAULT AND ENFORCEMENT
8.1 Each of the following is a default under this Agreement: __________
8.2 __________
8.3 The Lender's rights under this Agreement are in addition to, and not in substitution for, any other right or security the Lender holds for the same debt, and enforcement of this security does not by itself discharge the Borrower's personal liability for any shortfall.
- RELEASE
9.1 On repayment in full of the secured amount and all interest and other sums due, the Lender shall release the charge created by this Agreement, return any documents of title held in connection with it, and, where a Companies Act charge or a motor vehicle hypothecation endorsement was registered under this Agreement, co-operate in having it satisfied or removed from the relevant register.
- STAMP DUTY
10.1 This Agreement is executed in __________. __________ shall bear the stamp duty payable on this Agreement.
- NOTICES
11.1 Notices under this Agreement shall be in writing and delivered by hand against acknowledgment, or by registered post or courier with proof of delivery, to the Borrower at __________ and to the Lender at __________.
- DISPUTE RESOLUTION AND GOVERNING LAW
12.1 __________
12.2 The seat and venue of any arbitration under this Agreement, and the place of any court proceedings, is __________, and the courts at __________ have exclusive jurisdiction, subject to any arbitration agreed above and to the jurisdiction of the Debts Recovery Tribunal or other forum a statute gives exclusive jurisdiction to enforce a security of this kind.
12.3 This Agreement is governed by the laws of India as in force in __________.
- GENERAL
13.1 This Agreement, with its Schedule, is the entire agreement between the Parties about the security described in it.
13.2 No amendment, and no addition to or release of any part of the Hypothecated Assets, is effective unless made in writing and signed by both Parties.
13.3 If any provision is held invalid or unenforceable, the rest of this Agreement continues in effect.
SCHEDULE I — THE HYPOTHECATED ASSETS
__________
IN WITNESS WHEREOF the Parties have executed this Agreement at __________ on __________.
SIGNED AND DELIVERED by the BORROWER
__________
Signature: ______________________________
SIGNED AND DELIVERED by the LENDER
__________
Signature: ______________________________
WITNESSES
- __________
Signature: ______________________________
- __________
Signature: ______________________________