1. Fulfillment of conditions precedent in acquisition contract
Business Contract Drafting
FHUI, April 17th, 2012
Arief Surowidjojo

2. CONDITIONS PRECEDENT
A provision used for ensuring that all pre-conditions of a contract are agreed upon, and then fulfilled before a contract is declared effective. It makes such a contract as a conditional one
It works as an effective mechanism to determine that all requirements to make sure the contract is valid and enforceable are agreed and fulfilled
It also works as an agreed mechanism to control the process as to when the parties will be bound by and as such will have to comply with the contract provisions
It also works as an exit clause for one party or both parties when something gets wrong

3. CONDITIONS PRECEDENT The Conditions Lapse of time Occurrence of events
Delivery of certain agreed documents
Third party actions
Economic, business, political and other environment factors affecting the transactions

4. CONDITIONS PRECEDENT The Conditions Regulatory requirements
Corporate requirements
Contractual requirements : lenders, suppliers, contractors, joint venture partners, others
Reporting and registration requirements
Non-mandatory social and political environment requirements
Discretional conditions required by a dominating party

5. Class work
Global Resources Corp (GRC) plans to merge Inter Pacific Ltd., (IPL) in their home country in France. Both are investment companies holding equity in resources companies around the globe. The acquisition process is a bit complex due to restructuring corporate actions of IPL in France as required by its lenders. The crisis in Europe hit IPL in a massive way. IPL has a subsidiary company in Indonesia, PT IPL Energy Tbk., a company engaged in an integrated mining operations from coal mining, mining services, logistics and transportation IPLE). GRC owns a majority (76%) shares in PT Kalimantan Mining Integra (KMI), a company engaged in mining services and engineering. GRC and IPL are negotiating the structure of their operations in Indonesia due to the merger plan in France.
(a) please assist the parties in structuring the transaction for their Indonesian operations
(b) please prepare a conditions precedent clause in an agreement to be consummated by such parties

6. Class work
This is an individual class work, please work alone; time for completion is 45 minutes
Give one or more solutions to both parties re the most efficient structure under the Indonesian law
You could choose drafting a condition precedent clause in a transaction between the parties for GRC or for IPL