Share Security Agreement Template for Indonesia

The Share Security Agreement is a crucial document in Indonesian secured financing transactions, used when shares in an Indonesian company are provided as collateral for financial obligations. It must comply with specific requirements under Indonesian law, including the Civil Code and Law No. 40 of 2007 on Limited Liability Companies. The agreement details the creation of the security interest, perfection requirements including mandatory fiducia registration, voting and dividend rights, and enforcement mechanisms. It is commonly used in corporate lending, acquisition financing, and general secured facility arrangements. The document must be executed with certain formalities under Indonesian law and typically requires supporting corporate approvals and registrations. The agreement includes specific provisions required by Indonesian regulations regarding power of attorney, enforcement procedures, and security agent arrangements (if applicable).

1. Parties: Identification of the Pledgor (shareholder), Pledgee (security holder), and the Company whose shares are being pledged

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

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including Indonesian law-specific terms

4. Creation of Security: Express creation of the security interest over the shares, including the pledge mechanism under Indonesian law

5. Security Assets: Detailed description of the pledged shares and associated rights

6. Perfection Requirements: Steps required for valid creation and perfection of security under Indonesian law, including registration requirements

7. Representations and Warranties: Pledgor's confirmations regarding ownership, authority, and absence of encumbrances

8. Covenants: Ongoing obligations of the Pledgor regarding the pledged shares

9. Voting Rights and Dividends: Arrangements for 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 Pledgee as attorney for enforcement purposes (required under Indonesian law)

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

14. Governing Law and Jurisdiction: Confirmation of Indonesian law governance and jurisdiction arrangements