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The Third Party Pledge Agreement is a crucial security document used in Malaysian financing arrangements where a party (the pledgor) provides security over its assets to secure the obligations of another party (the principal debtor) to a secured party (the pledgee). This arrangement is common in corporate group structures, family businesses, or where business partners provide cross-security. The document must comply with Malaysian legal requirements, including registration under the Companies Act 2016 where applicable, stamping under the Stamp Act 1949, and any specific requirements relating to the type of pledged assets. The agreement typically includes detailed provisions on pledge creation, perfection requirements, maintenance obligations, enforcement mechanisms, and the specific rights and obligations of all three parties involved. It's particularly important that the document clearly establishes the three-way relationship and includes robust enforcement provisions given the third-party nature of the security.

1. Parties: Identifies and defines the three key parties: (1) Pledgor (third party providing security), (2) Pledgee (secured party), and (3) Principal Debtor

2. Background: Explains the context of the pledge, including reference to the principal debt agreement and the relationship between the parties

3. Definitions and Interpretation: Defines key terms used in the agreement and sets out interpretation rules

4. Creation of Pledge: Details the creation and nature of the pledge, including specific description of pledged assets

5. Perfection Requirements: Sets out actions required to perfect the pledge under Malaysian law, including registration requirements

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

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

8. Rights and Obligations: Details the rights and obligations of each party in relation to the pledged assets

9. Events of Default: Specifies circumstances constituting default and triggering enforcement rights

10. Enforcement: Details enforcement mechanisms and pledgee's rights upon default

11. Power of Attorney: Appointment of pledgee as pledgor's attorney for security purposes

12. Costs and Expenses: Allocation of costs, including stamp duty and registration fees

13. Notices: Communication procedures between parties

14. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, amendments