In this blog I will explain how schedules are used in M7A transactions, how to refer to them, and (post-closing) replacements.
Closing documents. In M&A transactions and financing transactions, it is appropriate to include the closing documentation as the last ‘schedule’ of the transaction binders. (I put schedule between quotation marks because these documents are often not mentioned in the agreement itself but are inevitably a part of the transaction. Such ‘schedule’ would contain the powers of attorney, approving corporate resolutions, copies of the executed deeds of transfer, resignation letters, director appointments and side letters.
How to refer. It is good practice to establish a standard phrase to refer to a schedule, as part of the company’s or firm’s contract drafting conventions. However, do not also include the ‘suffix’ hereto or to this Agreement. For example:
…the agreement attached as Schedule 3.
…in the form of Annex I.
…is listed in Schedule 8.1(a).
If there are several schedules, and in any event if the transaction documentation is rather voluminous, it is a good idea to include a list of schedules in the main agreement. M&A transactions tend to include the list underneath the table of contents (or on a separate page after the table of contents); ordinary course contracts often list the annexes underneath the signature block.
Formatting schedules. It is good practice to use a cover sheet for each schedule (consistently). However, if the contents of all the schedules allow, as is the case in most ordinary course contracts, it is appropriate to start the contents immediately underneath the schedule title. It is a good idea to use different headers and footers for the schedules (i.e. in which the schedule title and the agreement to which it relates are identified).
In large transactions, where the documents may fill one or more binders, it is useful to insert a tab page.
Post-closing replacements. When a transaction is closed, it is a good practice to replace the schedules that contain non-signed (agreed form) agreements that were to be signed on closing (and have been signed) with copies of the final signed ones.