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The Guaranty Fee Agreement is essential in commercial arrangements where one party provides a guarantee in favor of another and seeks compensation for this service. This document is commonly used in Malaysia across various business contexts, including corporate group structures, financial institutions, and commercial relationships. It establishes the legal framework for the guarantee fee arrangement, ensuring compliance with Malaysian law, particularly the Contracts Act 1950 and Financial Services Act 2013. The agreement typically details the fee calculation method, payment terms, duration of the arrangement, and the parties' respective rights and obligations. It's particularly relevant in scenarios involving corporate guarantees, bank guarantees, or other forms of financial support where the guarantor requires compensation for the risk and service of providing the guarantee.

1. Parties: Identification of the guarantor(s) and the party receiving the guarantee, including full legal names and addresses

2. Background: Context of the guarantee arrangement, reference to the underlying obligations being guaranteed, and the agreement to pay fees for the guarantee

3. Definitions: Key terms used in the agreement including 'Guarantee', 'Guarantee Fee', 'Payment Date', and other relevant defined terms

4. Guarantee Fee: Core provisions detailing the fee amount, calculation method, and basis for charging

5. Payment Terms: Timing and method of fee payments, including payment dates, currency, and payment instructions

6. Taxes and Deductions: Provisions regarding tax treatment of fees and responsibility for any applicable taxes or deductions

7. Duration: Term of the fee agreement and its relationship to the underlying guarantee

8. Representations and Warranties: Standard representations regarding capacity, authority, and enforceability

9. Termination: Circumstances under which the fee agreement can be terminated and the consequences

10. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for disputes