Third Party Security Agreement Template for Philippines

The Third Party Security Agreement is a fundamental document in Philippine secured transactions, used when a party (the Security Provider) agrees to provide security over their assets to secure the obligations of another party (the Debtor) to a creditor. This arrangement is common in corporate financing, real estate transactions, and various commercial scenarios where the principal debtor may not have sufficient assets to provide security. The document must comply with Philippine legal requirements, including the Civil Code, Securities Regulation Code, and relevant property laws. It typically includes detailed provisions on the security creation, perfection requirements, enforcement mechanisms, and the specific rights and obligations of all parties involved. The agreement becomes particularly important in cross-corporate guarantees, family business arrangements, or group company structures where related entities provide security for each other's obligations.

1. Parties: Identifies the three key parties: (1) the Creditor/Secured Party, (2) the Debtor, and (3) the Third Party Security Provider

2. Background: Explains the context of the security arrangement, including reference to the primary debt obligation and the third party's willingness to provide security

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

4. Creation of Security Interest: Details the security interest being created and the assets being secured

5. Secured Obligations: Specifies the obligations being secured, including the primary debt and any related obligations

6. Representations and Warranties: Contains representations and warranties from the Security Provider regarding ownership, authority to grant security, and status of the secured assets

7. Covenants: Sets out ongoing obligations of the Security Provider regarding the secured assets

8. Enforcement: Details the circumstances and process for enforcing the security interest

9. Power of Attorney: Grants powers to the Secured Party to perfect or enforce the security

10. Further Assurance: Requires parties to execute additional documents and take actions necessary to perfect the security

11. Indemnification: Contains indemnification provisions protecting the Secured Party

12. Term and Termination: Specifies duration of the agreement and termination events

13. Miscellaneous: Contains standard boilerplate provisions including notices, amendments, governing law, etc.