The Equity Loan Agreement is a specialized financing instrument used when a borrower seeks to obtain funding while utilizing their equity holdings as collateral, rather than traditional asset security. This document type is particularly relevant in the Indonesian market where specific regulatory frameworks govern both lending activities and share pledges. The agreement must comply with Indonesian Civil Code requirements, OJK regulations, and capital market laws, making it essential for corporate financing transactions where traditional collateral might not be available or preferred. The document includes comprehensive provisions for share valuation, pledge mechanisms, voting rights, dividend treatments, and enforcement procedures, all structured to align with Indonesian legal requirements. This type of agreement is commonly used in corporate restructuring, expansion financing, or when companies need working capital while maintaining ownership of their equity investments.
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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 borrower's request for the loan and the lender's willingness to provide it based on equity collateral
3. Definitions: Definitions of key terms used throughout the agreement
4. Loan Amount and Purpose: Specification of the loan amount, currency, and intended use of the loan proceeds
5. Equity Collateral: Details of the shares or equity interests being pledged as collateral, including quantity, class, and issuing company
6. Interest and Fees: Interest rate, calculation method, payment schedule, and any applicable fees
7. Drawdown: Conditions and procedures for loan disbursement
8. Repayment Terms: Schedule and method of loan repayment, including prepayment provisions
9. Security Arrangements: Mechanisms for securing the loan, including share pledge agreements and registration requirements
10. Representations and Warranties: Standard and specific declarations by both parties regarding their capacity and authority
11. Covenants: Ongoing obligations of the borrower during the loan period
12. Events of Default: Circumstances constituting default and consequences thereof
13. Rights and Remedies: Actions available to parties in case of default or breach
14. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes
15. Notices: Communication procedures between parties
16. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments
1. Currency Conversion: Required when loan and repayment currencies differ, specifying exchange rate mechanisms
2. Guarantees: Needed when additional guarantors are involved in securing the loan
3. Voting Rights: Required when specifying arrangements for exercising voting rights attached to pledged shares during the loan period
4. Dividend Treatment: Needed when addressing how dividends from pledged shares will be handled
5. Insurance: Required when insurance of the collateral is necessary
6. Tax Provisions: Detailed tax arrangements when complex tax implications exist
7. Regulatory Compliance: Special provisions for compliance with specific regulatory requirements, particularly for regulated entities
8. Force Majeure: Specific provisions for unforeseen circumstances affecting loan performance
1. Schedule 1 - Loan Details: Detailed breakdown of loan amount, interest calculations, and payment schedule
2. Schedule 2 - Equity Collateral Details: Comprehensive description of pledged shares including share certificates numbers and corporate details
3. Schedule 3 - Conditions Precedent: List of documents and conditions required before loan disbursement
4. Schedule 4 - Form of Drawdown Notice: Template for requesting loan disbursement
5. Schedule 5 - Repayment Schedule: Detailed amortization schedule if applicable
6. Appendix A - Share Pledge Agreement: Form of agreement for pledging shares as collateral
7. Appendix B - Corporate Authorizations: Copies of relevant corporate approvals and resolutions
8. Appendix C - Specimen Signatures: Authorized signatures for both parties
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