Share Loan Agreement Template for Indonesia

The Share Loan Agreement serves as a critical legal instrument in Indonesian financial markets, enabling temporary transfer of shares while maintaining regulatory compliance. This document is essential when parties need to facilitate share borrowing for various purposes such as market making, settlement of trades, or strategic corporate actions. The agreement must comply with Indonesian regulatory framework, including OJK regulations, Capital Market Law, and Company Law. It typically includes comprehensive provisions covering share transfer mechanics, corporate actions, voting rights, and return obligations. The document is particularly relevant in situations involving listed companies, institutional investors, or strategic corporate transactions in Indonesia, and must address specific local requirements such as OJK reporting, Indonesian language requirements, and local market practices.

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 Lender's ownership of shares and Borrower's purpose for borrowing

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation

4. Loan of Shares: Core terms of the share loan, including number and class of shares, loan period, and delivery mechanics

5. Return of Loaned Shares: Conditions and procedures for returning the borrowed shares

6. Fees and Costs: Any lending fees, costs, or charges associated with the share loan

7. Rights and Obligations During Loan Period: Parties' respective rights and obligations while shares are on loan

8. Representations and Warranties: Standard and specific representations and warranties from both parties

9. Corporate Actions and Adjustments: Handling of dividends, rights issues, and other corporate actions during the loan period

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

11. Termination: Conditions and procedures for early termination of the agreement

12. Tax Provisions: Treatment of taxes and responsibilities for tax payments

13. Notices: Process and requirements for formal communications between parties

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

15. General Provisions: Standard boilerplate clauses including amendments, assignment, and severability