A foreign subsidiary stock pledge agreement is one in which a parent company of a foreign subsidiary pledges the stock of the foreign subsidiary for the purpose of obtaining a loan against it. The parent company seeks a loan on the security of the stocks of its foreign subsidiary as collateral. The parent company should have complete ownership of the foreign subsidiary stocks and without any other charge or lien on the same. The agreement provides some of the essentials of the agreement such as execution of the agreement, performance terms agreed by the parent company, delivery of stocks pledged etc.
There are many important details that have to be specified in this foreign subsidiary stock pledge agreement such as name of the parent and foreign subsidiary company along with address, name of the financing company, amount of finance being obtained, details of stock of foreign subsidiary, ownership certificate of foreign subsidiary stocks, encumbrance certificate for stocks held by parent company etc.
[Also Read: Foreign Pledge Agreement]
Sample for Foreign Subsidiary Stock Pledge Agreement
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