Third Party Pledge Agreement Template for Switzerland

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Key Requirements PROMPT example:

Third Party Pledge Agreement

"I need a Third Party Pledge Agreement under Swiss law where a parent company pledges its securities portfolio to secure a CHF 5 million loan facility provided to its subsidiary by Credit Swiss, with the agreement to be effective from March 1, 2025."

Document background
The Third Party Pledge Agreement is a crucial security document used in Swiss financial and commercial transactions where a party (the Pledgor) provides security over its assets to secure the obligations of another party (the Principal Debtor) to a creditor (the Pledgee). This arrangement is commonly used in corporate finance, project finance, and other commercial transactions where direct security from the debtor is either insufficient or unavailable. The agreement must comply with Swiss law requirements for validity and enforceability, particularly the provisions of the Swiss Civil Code regarding pledges. It includes detailed provisions on the pledged assets, perfection requirements, maintenance obligations, and enforcement procedures. The document is particularly relevant in scenarios involving group company guarantees, related party security arrangements, or complex financing structures where third-party collateral is required.
Suggested Sections

1. Parties: Identification of the Pledgor (third party), the Pledgee (secured party), and the Principal Debtor whose obligations are being secured

2. Background: Context of the pledge arrangement, reference to the underlying obligations being secured, and the relationship between the parties

3. Definitions: Definitions of key terms used throughout the agreement, including 'Pledged Assets', 'Secured Obligations', and 'Enforcement Event'

4. Creation of Pledge: Express creation and granting of the pledge rights over the Pledged Assets

5. Secured Obligations: Detailed description of the obligations being secured by the pledge

6. Perfection Requirements: Steps required to perfect the pledge under Swiss law, including any registration or notification requirements

7. Representations and Warranties: Pledgor's representations regarding ownership, authority, and status of Pledged Assets

8. Pledgor's Obligations: Ongoing obligations of the Pledgor regarding maintenance and preservation of the Pledged Assets

9. Enforcement: Circumstances and procedures for enforcing the pledge, including private realization if agreed

10. Application of Proceeds: Order of application of proceeds from enforcement of the pledge

11. Release of Pledge: Conditions and process for releasing the pledge upon satisfaction of Secured Obligations

12. Governing Law and Jurisdiction: Confirmation of Swiss law as governing law and jurisdiction of Swiss courts

Optional Sections

1. Further Assurance: Additional provisions requiring parties to execute further documents or take additional actions, used in complex pledge arrangements

2. Power of Attorney: Appointment of Pledgee as attorney-in-fact for perfection or enforcement, used when direct action by Pledgor might be difficult to obtain

3. Tax Provisions: Allocation of responsibility for taxes arising from the pledge, used when significant tax implications are expected

4. Costs and Expenses: Allocation of costs related to the pledge agreement and its enforcement, used in larger transactions

5. Information Rights: Pledgee's rights to information about Pledged Assets, used for pledges of complex assets requiring monitoring

6. Insurance: Requirements for insurance of Pledged Assets, used when physical assets are pledged

7. Notices: Detailed notice provisions, used in complex transactions with multiple parties or jurisdictions

Suggested Schedules

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

2. Schedule 2 - Form of Notice: Template notices required for perfection of the pledge (if applicable)

3. Schedule 3 - Secured Obligations: Detailed description of the secured obligations if too extensive for main agreement

4. Schedule 4 - Perfection Requirements: Specific steps and documentation required for perfection

5. Appendix A - Powers of Attorney: Form of power of attorney if required for perfection or enforcement

6. Appendix B - Corporate Authorizations: Forms of corporate approvals required for the pledge

Authors

Alex Denne

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

Relevant legal definitions
Relevant Industries

Banking & Financial Services

Real Estate

Manufacturing

Technology

Infrastructure

Energy

Telecommunications

Healthcare

Insurance

Trading & Commerce

Private Equity

Asset Management

Construction

Agriculture

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Secretariat

Credit Administration

Security Administration

Transaction Management

Portfolio Management

Relevant Roles

Legal Counsel

Corporate Lawyer

Finance Director

Chief Financial Officer

Treasury Manager

Risk Manager

Compliance Officer

Security Trustee

Transaction Manager

Credit Officer

Corporate Secretary

General Counsel

Banking Lawyer

Security Agent

Portfolio 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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