Receivables Pledge Agreement Template for Pakistan

The Receivables Pledge Agreement is a crucial security document used in financing transactions in Pakistan where a company seeks to use its accounts receivable as collateral. It is commonly used in working capital financing, trade finance, and general corporate lending arrangements. The document creates a security interest over the pledgor's receivables, both present and future, and includes provisions for perfection of security, maintenance of the collateral, and enforcement mechanisms. The agreement must comply with Pakistani law requirements, particularly under the Financial Institutions (Recovery of Finances) Ordinance 2001, Companies Act 2017, and Contract Act 1872. It is essential for businesses seeking to leverage their receivables for obtaining financing and for financial institutions requiring security over such assets.

1. Parties: Identification of the Pledgor (owner of receivables), the Pledgee (secured party), and any security agent if applicable

2. Background: Context of the transaction, reference to any underlying facility agreement or main financing, and purpose of the pledge

3. Definitions and Interpretation: Definitions of key terms including Receivables, Security Period, Secured Obligations, and interpretation clauses

4. Creation of Pledge: Express creation of the security interest over the receivables, scope of the pledge, and continuing security provisions

5. Perfection and Further Assurance: Requirements for perfecting the security interest, including registration requirements and notice to debtors

6. Representations and Warranties: Pledgor's representations regarding ownership, authority, and status of receivables

7. Covenants: Positive and negative undertakings regarding the receivables, including collection, maintenance, and disposal restrictions

8. Enforcement: Rights and remedies upon default, including collection rights and power of sale

9. Application of Proceeds: Order of application of amounts received from enforcement or collection

10. Release and Termination: Conditions for release of security and termination of the agreement

11. Miscellaneous: Standard boilerplate provisions including notices, amendments, assignments, governing law