Guaranty Fee Agreement Template for Indonesia

A Guaranty Fee Agreement is essential in commercial arrangements where one party provides a guarantee to support another party's obligations. This document is particularly relevant in the Indonesian business context, where parent companies, financial institutions, or other entities frequently provide guarantees to support commercial transactions. The agreement details the fee structure, calculation methodology, payment terms, and related obligations, ensuring compliance with Indonesian law, particularly the Civil Code (KUHPerdata) and financial regulations. The document becomes necessary when establishing a new guarantee relationship or formalizing an existing arrangement, providing clarity on the guarantor's compensation for assuming risk. It typically includes provisions for periodic fee payments, adjustment mechanisms, and specific Indonesian legal requirements for enforceability.

1. Parties: Identifies the guarantor and the party responsible for paying the guarantee fee

2. Background: Explains the context of the guarantee arrangement and the reason for the fee agreement

3. Definitions: Defines key terms used throughout the agreement, including 'Guarantee', 'Guaranteed Obligations', and 'Fee'

4. Guarantee Fee: Specifies the amount or calculation method of the guarantee fee

5. Payment Terms: Details the timing, frequency, and method of fee payments

6. Calculation Period: Defines how the fee is calculated and the relevant time periods

7. Payment Method: Specifies the currency, bank account details, and payment procedures

8. Taxes: Addresses tax implications and responsibilities for tax payments

9. Duration: Specifies the term of the agreement and conditions for termination

10. Representations and Warranties: Standard representations by both parties regarding capacity and authority

11. Confidentiality: Provisions regarding the confidential treatment of agreement terms and related information

12. Governing Law and Jurisdiction: Specifies Indonesian law as governing law and sets jurisdiction for disputes

13. Notices: Details how formal communications between parties should be made

14. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments