Anatomy of contract for the acquisition of distressed companies FHUI, Contract Drafting November 29 th, 2011

anatomy The parties: legal standing, credibility, legal representation, limit of authority The recitals: the conditions, role and ability of the parties, basic business intention of the parties, offer and acceptance The agreements : Definition: Agreement, Parties, Assets, Liabilities, Company, BoD, BoC, Employees, Fair Market Price, Financial Statements, Contracts, Shareholders, Articles of Association, Laws and Regulations, Government, etc Conditions precedent: regulatory approvals, corporate approvals, contractual approvals, due diligence completion, no occurrence of event of default, resignation of BoD and BoC, banks’ consent, employees’ consent, others

anatomy Expressed statements on acquisition, object of acquisition, price of acquisition, transfer of title Cut-off date of control, operations, and consequences on benefits, assets and liabilities Status of debts, agreement to debt restructuring, determination of new debt after restructuring, terms of new debt agreements, freeing the assets from securing the debts, refinancing Payment: form, schedule, matters that hold the payment, adjustments Change in conditions: assets and liabilities, contracts, regulatory, key personnel Representation, warranties, covenants: financial ratio, no material changes, no bankruptcy proceeding, no threatened litigation or material claims

anatomy No competition No solicitation on hiring existing employees Commitment to secure smooth transition Status of contractors, consultants, suppliers, distributors, resellers Events of default and consequences of defaults Termination Governing laws Dispute settlement

Drafting exercise Please draft the parties, recitals and conditions precedent clauses for acquisition of majority shares in PT MNO, a distressed company, by DEF Corp., a US-based company (see previous case used in last class discussion)