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The Guarantor Agreement For Loan is a crucial document in Indonesian lending practices, commonly used when additional security is required for a loan facility. This agreement becomes necessary when a lender requires extra assurance beyond the borrower's own creditworthiness, particularly in cases of substantial loans, business financing, or when the primary borrower has limited credit history. Under Indonesian law, specifically the Civil Code and Banking Law No. 10 of 1998, such guarantees must be properly documented and registered. The agreement details the guarantee's scope, enforcement mechanisms, and the guarantor's obligations, while ensuring compliance with Indonesian regulatory requirements, including fiduciary registration where applicable. It serves as a risk mitigation tool for lenders while providing a structured framework for guarantee obligations.

1. Parties: Identifies the Lender, Borrower, and Guarantor with their complete legal details

2. Background: Sets out the context of the loan agreement and the purpose of the guarantee

3. Definitions: Defines key terms used throughout the agreement

4. Guarantee and Indemnity: Core section detailing the guarantee obligations, including the scope and extent of the guarantee

5. Guarantor's Representations and Warranties: Statements of fact and assurances provided by the guarantor regarding their capacity and authority

6. Nature of Guarantee: Specifies that the guarantee is continuing, unconditional and irrevocable

7. Payment Obligations: Details when and how the guarantor must make payments upon default by the borrower

8. Preservation of Rights: Provisions ensuring the lender's rights are preserved in various circumstances

9. Tax Gross-Up and Indemnities: Provisions dealing with tax implications and requirements

10. Costs and Expenses: Allocation of costs related to the preparation and enforcement of the guarantee

11. Duration and Release: Terms regarding how long the guarantee remains in effect and conditions for release

12. Notices: How formal communications between parties should be made

13. Governing Law and Jurisdiction: Specifies Indonesian law as governing law and relevant jurisdiction for disputes