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The Share Cancellation Agreement is a crucial document used in Indonesian corporate transactions when a company needs to cancel existing shares, whether as part of a capital reduction, corporate restructuring, or share buyback program. This document is essential under Indonesian Company Law (Law No. 40 of 2007) and must comply with various regulatory requirements, including obtaining necessary corporate and regulatory approvals. The agreement typically addresses key aspects such as the identification of shares to be cancelled, consideration (if any), tax implications, and the effect on the company's capital structure. It's particularly important in scenarios involving listed companies, corporate reorganizations, or when implementing shareholder exit mechanisms. The document must be executed in compliance with Indonesian legal requirements, often requiring notarization and registration with relevant authorities.

1. Parties: Identification of the company, the affected shareholder(s), and any other relevant parties

2. Background: Context of the share cancellation, including reasons for cancellation and reference to relevant corporate approvals

3. Definitions: Definitions of key terms used throughout the agreement

4. Share Details: Specific details of shares to be cancelled, including number, class, and nominal value

5. Cancellation Process: Step-by-step process of the share cancellation, including timing and mechanisms

6. Consideration: Details of any payment or compensation for the cancelled shares

7. Conditions Precedent: Conditions that must be fulfilled before the cancellation becomes effective

8. Representations and Warranties: Statements of fact and guarantees by both parties

9. Corporate Approvals: Confirmation of necessary corporate and regulatory approvals

10. Tax Provisions: Allocation of responsibility for any tax implications

11. Governing Law: Confirmation of Indonesian law as governing law

12. Dispute Resolution: Mechanism for resolving any disputes arising from the agreement