Equity Loan Agreement Template for Indonesia

The Equity Loan Agreement is a specialized financing instrument used when a borrower seeks to obtain funding while utilizing their equity holdings as collateral, rather than traditional asset security. This document type is particularly relevant in the Indonesian market where specific regulatory frameworks govern both lending activities and share pledges. The agreement must comply with Indonesian Civil Code requirements, OJK regulations, and capital market laws, making it essential for corporate financing transactions where traditional collateral might not be available or preferred. The document includes comprehensive provisions for share valuation, pledge mechanisms, voting rights, dividend treatments, and enforcement procedures, all structured to align with Indonesian legal requirements. This type of agreement is commonly used in corporate restructuring, expansion financing, or when companies need working capital while maintaining ownership of their equity investments.

1. Parties: Identification of the lender and borrower, including their complete legal names, registration numbers, and addresses

2. Background: Context of the agreement, including the borrower's request for the loan and the lender's willingness to provide it based on equity collateral

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Amount and Purpose: Specification of the loan amount, currency, and intended use of the loan proceeds

5. Equity Collateral: Details of the shares or equity interests being pledged as collateral, including quantity, class, and issuing company

6. Interest and Fees: Interest rate, calculation method, payment schedule, and any applicable fees

7. Drawdown: Conditions and procedures for loan disbursement

8. Repayment Terms: Schedule and method of loan repayment, including prepayment provisions

9. Security Arrangements: Mechanisms for securing the loan, including share pledge agreements and registration requirements

10. Representations and Warranties: Standard and specific declarations by both parties regarding their capacity and authority

11. Covenants: Ongoing obligations of the borrower during the loan period

12. Events of Default: Circumstances constituting default and consequences thereof

13. Rights and Remedies: Actions available to parties in case of default or breach

14. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

15. Notices: Communication procedures between parties

16. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments