Mortgage of / Charge over Securities

The document titled 'Mortgage of / Charge over Securities' is a legal agreement between two parties, the mortgagor and the lender. The document serves as a mortgage and charge over securities, providing security for the payment and discharge of the secured amounts. The importance of this document lies in its role as a continuing and primary security, ensuring that the lender has a legal claim over the securities in case of default or non-payment by the mortgagor.

 

The document begins with definitions and interpretations, clarifying the terms used throughout the agreement. It then outlines the mortgage itself, stating that the mortgagor assigns and transfers the original securities, any substitute securities, and any other securities derived from or offered in respect of the original securities. The mortgagor is also required to transfer and register the securities in the name of the lender or its nominee.

 

The document further establishes that the mortgage is a continuing security and that the security shares are deposited and mortgaged to the lender as primary security. The mortgagor's liabilities and obligations under the mortgage and the security interest created by the mortgage remain in force, except in the case of proper payment and discharge of the secured amounts or an absolute discharge or release signed by the lender.

 

The mortgagor provides warranties and undertakings, representing that they are the sole legal and beneficial owner of the securities and that the securities are free from any security interests or encumbrances. The mortgagor also undertakes to pay expenses related to perfecting or enforcing the security and to promptly pay all calls and payments due in respect of the security shares.

 

The document includes provisions for dividends and voting rights, allowing the lender to exercise voting rights and receive dividends until an event of default or a sale event occurs. In the event of a sale event, the lender has the power to sell or dispose of the security shares and apply the proceeds towards the discharge of the secured amounts.

 

Other provisions in the document cover reassignment of the security shares, expenses and indemnity, notices and communications, and the governing law and jurisdiction of the agreement.

 

Overall, this document is crucial for establishing a legal and enforceable mortgage and charge over securities, providing security for the lender and ensuring the repayment of the secured amounts.

How to use this document?

To use this document effectively, follow these steps:

1. Provide the required information: Enter the names and addresses of the mortgagor and the lender, ensuring that the information is accurate and up to date.

2. Understand the definitions and interpretations: Familiarize yourself with the definitions and interpretations provided in the document to ensure a clear understanding of the terms used throughout the agreement.

3. Execute the mortgage: Sign and deliver the document as a deed, ensuring that it is properly executed and delivered.

4. Transfer and register the securities: If required, transfer and register the original securities and any substitute securities in the name of the lender or its nominee, as specified in the document.

5. Comply with obligations and undertakings: Fulfill all obligations and undertakings outlined in the document, including the payment of expenses and the prompt payment of calls and payments due in respect of the security shares.

6. Exercise voting rights and receive dividends: Until an event of default or a sale event occurs, the lender has the right to exercise voting rights and receive dividends. Ensure that the lender is provided with any necessary instructions regarding the exercise of these rights.

7. Prepare for a sale event: Understand the conditions that constitute a sale event and be prepared for the possibility of the lender exercising its powers and rights in the event of default or non-compliance.

8. Seek legal advice if needed: If you have any questions or concerns about the document or its implications, consult with a legal professional to ensure that you fully understand your rights and obligations.

By following these steps and ensuring compliance with the terms of the document, you can effectively use the 'Mortgage of / Charge over Securities' agreement to establish a legally binding mortgage and charge over securities, providing security for the lender and protecting their interests.