A supplement to collateral agreement is an addition to original funding arrangement and enacted in case of addition of a new subsidiary in the original collateral agreement and the subsidiary agrees to be part of pledgers of the collateral and in turn share the liabilities along with the holding parent company.
In other words it is an addition agreement in which amendment is made to the original agreement by adding a subsidiary which may pledge additional collateral or be a part of original collateral and share the liabilities arising out of the existing or additional debt. The supplement to the collateral agreement should contain all the terms and conditions under which the subsidiary is being added into the arrangement and should specifically mention the liability or change in terms on addition of the subsidiary. Also it should clearly mention the possibility to add any new subsidiary or make any supplement to the collateral agreement.
Sample for supplement to collateral agreement
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