Share Mortgage Agreement Template for Indonesia

A Share Mortgage Agreement is a crucial security document used in Indonesian financing transactions where shares in an Indonesian company serve as collateral. This document is commonly utilized in corporate lending, acquisition financing, and general secured lending transactions. The agreement must comply with Indonesian law requirements, including the Civil Code, Company Law (Law No. 40 of 2007), and relevant OJK regulations. It details the creation of the security interest, parties' rights and obligations, enforcement mechanisms, and necessary registration requirements. The document is particularly important in cross-border transactions where foreign lenders require security over Indonesian company shares, necessitating compliance with both local and international banking practices while maintaining enforceability under Indonesian law.

1. Parties: Identification of the Mortgagor (share owner), Mortgagee (security holder), and the Company whose shares are being mortgaged

2. Background: Context of the security arrangement, reference to the underlying facility/loan agreement, and purpose of the share mortgage

3. Definitions: Definitions of key terms used throughout the agreement, including specific Indonesian law terms

4. Creation of Security: Express provisions creating the mortgage over the shares, including the scope of secured assets

5. Secured Obligations: Definition and scope of the obligations being secured by the share mortgage

6. Mortgagor's Representations and Warranties: Statements regarding ownership, authority, and absence of encumbrances on the shares

7. Mortgagor's Covenants: Ongoing obligations of the mortgagor regarding the mortgaged shares

8. Rights and Obligations of the Mortgagee: Powers and duties of the security holder

9. Voting Rights and Dividends: Provisions regarding exercise of voting rights and receipt of dividends pre and post-enforcement

10. Events of Default: Circumstances triggering enforcement rights

11. Enforcement: Rights and procedures for enforcing the security in accordance with Indonesian law

12. Power of Attorney: Appointment of Mortgagee as attorney for specific purposes

13. Miscellaneous: Standard provisions including notices, amendments, governing law, and jurisdiction