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Pledge Security Agreement for Malaysia

Pledge Security Agreement Template for Malaysia

A Pledge Security Agreement under Malaysian law is a formal legal document that creates a security interest over specific assets in favor of a lender or security taker. The agreement, governed by Malaysian law including the Contracts Act 1950 and Companies Act 2016, establishes the terms and conditions under which assets are pledged as collateral for securing obligations. It details the pledged assets, enforcement mechanisms, parties' rights and obligations, and includes specific provisions required under Malaysian law for creating and perfecting the security interest. The document must comply with local registration requirements and enforcement procedures, particularly when involving company assets or regulated securities.

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What is a Pledge Security Agreement?

The Pledge Security Agreement is a crucial document in Malaysian secured lending transactions, used when a party (Pledgor) needs to provide security over specific assets to secure obligations owed to another party (Pledgee). This document is commonly used in various financing arrangements, including corporate loans, asset financing, and investment transactions. The agreement must comply with Malaysian legal requirements, including those under the Contracts Act 1950 and Companies Act 2016, and may require registration with relevant authorities such as the Companies Commission of Malaysia. It typically contains detailed provisions on the nature and scope of the pledged assets, enforcement mechanisms, and the parties' respective rights and obligations. The document is particularly important in the Malaysian context due to specific local law requirements for creating and perfecting security interests.

What sections should be included in a Pledge Security Agreement?

1. Parties: Identification of the Pledgor and Pledgee, including their full legal names, registration numbers, and registered addresses

2. Background: Context of the pledge agreement, including reference to any underlying facility or main agreements

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation

4. Grant of Security Interest: Core provision establishing the pledge and security interest over the pledged assets

5. Pledged Assets: Detailed description and scope of the assets being pledged as security

6. Secured Obligations: Definition and scope of the obligations being secured by the pledge

7. Representations and Warranties: Pledgor's confirmations regarding ownership, authority, and status of pledged assets

8. Covenants: Ongoing obligations of the Pledgor regarding the pledged assets and maintenance of the security

9. Rights and Obligations: Specific rights and obligations of both parties regarding the pledged assets

10. Events of Default: Circumstances constituting default and triggering enforcement rights

11. Enforcement: Rights and procedures for enforcing the security interest upon default

12. Power of Attorney: Appointment of Pledgee as attorney for specific security-related actions

13. Notices: Process and requirements for formal communications between parties

14. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for disputes

15. Miscellaneous: Standard boilerplate provisions including severability, amendments, and counterparts

What sections are optional to include in a Pledge Security Agreement?

1. Security Margin: Required when the pledge involves securities or assets with fluctuating value, specifying maintenance margins

2. Voting Rights: Needed when pledged assets include shares or securities with voting rights

3. Income and Distributions: Required when pledged assets generate income or distributions

4. Insurance: Needed when pledged assets require insurance coverage

5. Registration: Required when the pledge needs specific registration with authorities

6. Custody Arrangements: Needed when a third-party custodian is involved

7. Further Assurance: Optional section for additional security perfection requirements

8. Tax Provisions: Required when there are specific tax implications for the pledge arrangement

What schedules should be included in a Pledge Security Agreement?

1. Schedule 1 - Description of Pledged Assets: Detailed list and description of all assets subject to the pledge

2. Schedule 2 - Form of Notice of Pledge: Template for notifying relevant parties of the pledge

3. Schedule 3 - Form of Acknowledgment: Template for third-party acknowledgment of the pledge

4. Schedule 4 - Secured Obligations: Detailed description of the underlying obligations being secured

5. Schedule 5 - Registration Requirements: List of required registrations and filings

6. Appendix A - Specimen Signatures: Authorized signatures for both parties

7. Appendix B - Power of Attorney: Detailed power of attorney provisions and scope

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Ƶ

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions







































Clauses






























Relevant Industries

Banking & Finance

Investment Services

Corporate Services

Real Estate

Manufacturing

Trading & Commerce

Infrastructure

Energy

Technology

Telecommunications

Healthcare

Agriculture

Mining & Resources

Transportation & Logistics

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Secretarial

Credit Administration

Security & Collateral Management

Investment Operations

Transaction Management

Relevant Roles

Legal Counsel

Corporate Lawyer

Finance Manager

Credit Risk Manager

Compliance Officer

Security Trustee

Transaction Manager

Corporate Secretary

Chief Legal Officer

Chief Financial Officer

Banking Relationship Manager

Security Agent

Finance Director

Treasury Manager

Investment Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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