Stock Pledge Agreement Template for Indonesia

A Stock Pledge Agreement is a crucial security document used in Indonesian financing transactions where shares in an Indonesian company are provided as collateral. This document is commonly used in corporate lending, acquisition financing, and other secured transactions where lenders require security over shares. The agreement must be structured to comply with Indonesian Civil Code provisions on pledges, Law No. 40 of 2007 on Limited Liability Companies, and where applicable, capital market regulations. It includes detailed provisions on pledge creation, perfection requirements including registration with relevant authorities, voting rights arrangements, dividend treatments, and enforcement mechanisms. The document is particularly important in Indonesia's civil law system, where specific formalities must be observed for the pledge to be valid and enforceable.

1. Parties: Identification of the Pledgor and Pledgee, including their complete legal names, addresses, and company registration details

2. Background: Context of the pledge arrangement, including reference to any underlying obligations or facilities being secured

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

4. Pledge: Core provisions creating the pledge over the shares, including description of pledged shares and secured obligations

5. Representations and Warranties: Pledgor's confirmations regarding ownership, authority, and absence of encumbrances on the shares

6. Covenants: Ongoing obligations of the Pledgor regarding the pledged shares, including maintenance of value and restrictions on disposal

7. Rights and Obligations: Detailed rights of the Pledgee and obligations of the Pledgor during the pledge period

8. Voting Rights and Dividends: Provisions governing exercise of voting rights and receipt of dividends during the pledge period

9. Events of Default: Circumstances constituting default and triggering enforcement rights

10. Enforcement: Procedures for enforcing the pledge in accordance with Indonesian law

11. Power of Attorney: Irrevocable power of attorney for the Pledgee to perfect and enforce the pledge

12. Registration and Notices: Requirements for registering the pledge and notifying relevant parties

13. Costs and Expenses: Allocation of costs related to the pledge creation, maintenance, and enforcement

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

15. Miscellaneous: Standard boilerplate provisions including notices, amendments, and severability