This Commercial Pledge
(the “Agreement”) is effective [DATE],
BETWEEN: [YOUR
COMPANY NAME] (the "Lender"), company organised and existing under
the laws of the [State/Province] of [Country], with its head office located at:
[YOUR
COMPLETE ADDRESS]
AND: [COMPANY
NAME] (the "Borrower"), a company organised and existing under the
laws of the [State/Province] of [Country], with its head office located at:
[COMPLETE
ADDRESS]
THE PARTIES HERETO HAVE
AGREED AS FOLLOWS:
1.
LOAN
Subject to and
in accordance with all the terms and conditions of that certain credit
agreement entered into between the Lender and the Borrower bearing formal date
of [DATE] as same may be amended and supplemented at any time and from time to
time (the “Credit Agreement”), the Lender offered to lend to the Borrower, and
the Borrower accepted to borrow from the Lender, an amount equal to the sum of
[AMOUNT IN LETTERS] (R[AMOUNT]) (the “Loan”), with interest thereon at the rate
stipulated therein.
2.
SECURITY
As security for
the performance by the Borrower of all its obligations, present and future,
direct and indirect, absolute and contingent, toward the Lender hereunder and
under the Credit Agreement and the Security Documents (as defined in the Credit
Agreement), including, without limiting the generality of the foregoing, the
obligation to repay in principal, interest, fees and accessories, all monies
presently owing and due and hereafter to become owing and due to the Lender by
the Borrower under the Credit Agreement, the Borrower, in accordance with the
provisions of the laws of [COUNTRY], hereby charges and pledges as and by way
of a commercial pledge, in favour of the Lender, the following equipment and
machinery, to wit:
[DESCRIBE EQUIPMENT/MACHINERY]
(the “Property”)
3.
PROPERTY
The location of
the property of a fixed nature, which is pledged herein, is at the location of
the Borrower situated at [FULL ADDRESS];
4.
PLEDGE LOCATION
The
establishment in the [State/Province] of [COUNTRY] where are controlled and
recorded the movements of the assets pledged herein and which are not of a
fixed nature, is located at [FULL ADDRESS];
5.
CHANGE OF LOCATION OR
ESTABLISHMENT
If the said
location or establishment is changed, the Borrower shall immediately inform the
Lender thereof in writing. If the said location or establishment is changed for
another outside the registration division in which the location or
establishment, as the case may be, is located, the Borrower shall immediately
furnish the Lender, to its entire satisfaction, evidence of renewal of the deed
registration at the office of the new registration division.
6.
PROPERTY PLEDGED
The Lender
hereby declares and guarantees that the property pledged has been paid in full
and belongs to it in sole and absolute ownership, free and clear of all liens,
privileges and charges whatsoever except for Permitted Encumbrances, as that
term is defined in the Credit Agreement.
7.
NO LIEN
The Borrower
shall maintain the property pledged in good condition and repair and free and
clear of all liens, charges and privileges whatsoever, except for Permitted
Encumbrances; the Borrower shall grant the Lender access at all times to the
said property for the purpose of inspecting same.
8.
PREMISES
If any property
pledged is located in leased premises or is at any time placed in leased
premises, the Borrower shall immediately notify the lessor in writing of the
said pledge and shall provide the Lender with proof of such notification to its
entire satisfaction.
9.
ADDITIONAL SECURITY
As additional
security, the Borrower binds and obliges itself to insure the property pledged
against loss by fire and other risks, to the satisfaction of the Lender, at
least to the extent of the full replacement cost thereof without depreciation,
with an insurance company approved by the Lender, to transfer to the latter all
insurance policies, to maintain same in force until full payment of the said
Loan and to deliver to the Lender, at least [NUMBER] days prior to the
expiration of a policy, the receipts evidencing the renewal thereof. In the
event of failure by the
Borrower to
fulfil any of its obligations hereinabove mentioned, the Lender, without
prejudice to any of its other recourses, may, at the Borrower’s expense, take
out any new insurance policies and claim immediate repayment of the premiums
thereof, at the lower rate of interest mentioned in the Credit Agreement on the
remaining advances guaranteed by the present deed.
The proceeds of
any insurance shall be paid directly to the Lender to the extent of the amount
of its claim, and, for this purpose, the Borrower hereby declares that it
transfers same to the Lender as of the date hereof.
10.
LEGAL FEES
The Borrower
shall pay all legal fees with respect to these presents and all registration
expenses, including the renewal of such registration when necessary.
11.
INSURANCE PREMIUMS OR COSTS
The Borrower
shall pay to the Lender, on demand, all sums expended by the latter for the
payment of insurance premiums and any other costs in connection with the Loan
or to preserve the security or for the fulfilment of any obligation of the
Borrower hereunder, with interest on all such sums at the lower rate of
interest mentioned in the Credit Agreement on the remaining advances guaranteed
by the present deed from the date of payment thereof by the Lender, the whole
without prejudice to the other rights of the Lender.
12.
OBLIGATIONS
Failure to
fulfil any of the obligations stipulated herein within the period of time
afforded to the Borrower shall constitute a default on the part of the
Borrower, without the necessity of any notice.
13.
CONSTITUTED SECURITY
The security
hereby constituted shall become enforceable in each of the instances mentioned
below, namely, should the Borrower:
13.1
commit an “Event of Default” as
that term is defined in the Credit Agreement;
13.2
allow the security hereinbefore
mentioned to diminish; fail to maintain the property pledged in good condition,
or change its destination without the consent of the Lender, or move it without
having first notified the Lender thereof; or transfer the ownership thereof by
deed inter fvivos, either for valuable consideration or gratuitously;
13.3
fail to pay the fees with
respect to the present deed and the registration thereof or the renewal
thereof;
13.4
refuse to allow the Lender to
examine the said property, from time to time, to ascertain its condition;
13.5
fail or refuse to fulfil or
execute any other obligations, clauses or conditions stipulated in the present
deed.
14.
DEFAULT
In the event
that any one or more of the events of default above mentioned shall have
occurred, the Lender, without notice or delay:
14.1
shall be entitled to demand
without notice and without prejudice to any other recourses, repayment of the
Loan, accrued interest, interest on interest, costs and expenses incurred in
protecting its claim, in addition to a fixed amount of [%] of the original
amount of the Loan;
14.2
shall have the right, without
prejudice to any other rights and recourses which it may have, to require the
Borrower to deliver on demand the property pledged so that the Lender may sell
it at auction, and after notice, in the manner provided by the laws of the
[State/Province] of [COUNTRY], and the Lender shall have the right to payment
by preference out of the proceeds of sale, of the entire amount of the Loan
then outstanding in principal, interest and accessories and all other sums the
repayment of which is secured by this Deed of Commercial Pledge, including the
costs relating to the repossession and the sale.
IN WITNESS
WHEREOF, each party to this agreement has caused it to be executed at [PLACE OF
EXECUTION] on the date indicated above.
THE LENDER THE
BORROWER
Authorised Signature Authorised
Signature
____________________________________
____________________________________
Print Name and Title Print
Name and Title
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