Option Agreement Contract Template for Malaysia

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Key Requirements PROMPT example:

Option Agreement Contract

"I need an Option Agreement Contract for granting my company's minority shareholder the right to purchase an additional 15% of company shares at RM 500,000 per 1% share, exercisable until March 1, 2025."

Document background
The Option Agreement Contract serves as a crucial legal instrument in Malaysian business transactions, providing a structured framework for future dealings between parties. This document is typically used when one party wishes to secure the right to pursue a specific transaction (such as purchasing assets, shares, or property) at a later date while maintaining flexibility in decision-making. The agreement must comply with Malaysian legal requirements, including the Contracts Act 1950, Stamp Act 1949, and where applicable, the Capital Markets and Services Act 2007. It's particularly valuable in scenarios involving property development, corporate acquisitions, share purchases, or strategic business arrangements where parties need time to evaluate opportunities or secure financing. The Option Agreement Contract includes detailed provisions on exercise procedures, pricing mechanisms, timelines, and completion requirements, ensuring clarity and enforceability under Malaysian law.
Suggested Sections

1. Parties: Identification of the option grantor and grantee, including full legal names and addresses

2. Background: Context of the agreement, relationship between parties, and purpose of the option

3. Definitions: Key terms used throughout the agreement, including Option Period, Strike Price, Subject Matter

4. Grant of Option: Clear statement of the option rights being granted and their nature (call/put)

5. Option Period: Duration of the option, including commencement and expiration dates

6. Exercise Price: Specification of the price at which the option can be exercised

7. Exercise Procedure: Detailed process for exercising the option, including notice requirements

8. Payment Terms: Terms for option premium and exercise price payment

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

10. Completion Obligations: Actions required upon exercise of the option

11. Termination: Circumstances under which the agreement can be terminated

12. Governing Law and Jurisdiction: Specification of Malaysian law and jurisdiction

13. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment

Optional Sections

1. Multiple Options: Section needed when agreement includes multiple option rights or tranches

2. Security Arrangements: Required when the option involves secured assets or requires security

3. Third Party Rights: Needed when third parties have rights or obligations under the agreement

4. Tax Provisions: Detailed tax implications and responsibilities when significant tax considerations exist

5. Right of First Refusal: Additional rights related to future sales or transfers

6. Regulatory Compliance: Required when the option involves regulated assets or activities

7. Force Majeure: Included when external events might affect option exercise

8. Confidentiality: Needed when sensitive information is involved in the option arrangement

Suggested Schedules

1. Schedule 1 - Subject Matter Description: Detailed description of the asset, shares, or rights subject to the option

2. Schedule 2 - Option Exercise Notice Format: Template for the formal notice to exercise the option

3. Schedule 3 - Completion Requirements: Detailed list of documents and actions required at completion

4. Schedule 4 - Pricing Mechanism: Detailed calculation method if the exercise price is variable or formula-based

5. Schedule 5 - Due Diligence Materials: List of documents and information provided or to be provided

6. Appendix A - Required Regulatory Approvals: List of necessary regulatory approvals and requirements

7. Appendix B - Form of Transfer Documents: Templates for transfer documents required upon exercise

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant Industries

Real Estate

Financial Services

Manufacturing

Technology

Mining

Agriculture

Retail

Construction

Energy

Telecommunications

Private Equity

Venture Capital

Professional Services

Healthcare

Relevant Teams

Legal

Finance

Corporate Development

Compliance

Risk Management

Business Development

Real Estate

Operations

Strategic Planning

Investment

Commercial

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Lawyer

Business Development Manager

Investment Manager

Property Developer

Contract Manager

Risk Manager

Company Secretary

Commercial Director

Compliance Officer

Real Estate Manager

Asset Manager

Strategic Planning Director

Operations Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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