Schedules, annexes, appendices – reasons to include 2

In this blog post, I will address the two remaining reasons for attaching annexes to an agreement. Firstly, a schedule helps separating facts from obligations; secondly, people often find it easier to update and replace an annex.

  • Separation of facts and obligations. It is strongly recommended to move informative aspects, specifications and technical facts to a schedule; it avoids the drafter having to keep track of all changes in technical documents (for which the technical people are responsible).
  • an asset purchase agreement may contain lists of assets, inventories, registered details of transferred real estate and numbers of transferring bank accounts;
  • a share purchase agreement may contain such a large number of sellers or acquired entities that separating the details of these parties will reduce the size of the contracting parties’ block or the definitions section by moving those details to a schedule;
  • a credit facility agreement (such as the LMA) contains the required notice letter formats to be used by the borrower in case of a drawdown, a prepayment or an event of default;
  • a joint venture agreement will typically contain a description of the joint venture’s business; because sharpening the scope of the business does not require a full document to be circulated each time, separating this in a one page schedule may support the discussions;
  • similarly, a joint venture agreement will normally contain a business plan for the joint venture. The business plan may be a Powerpoint presentation or an Excel spreadsheet (depending on the kind of persons who are responsible for preparing the business case). A contract should not contain spreadsheets or presentations;
  • a trade mark licence agreement will identify (and display) the licenced trade marks in the schedule;
  • a patent licence agreement or a deed of patent transfer may identify the registration numbers and jurisdictions of filing (or pending registrations) in an annex.

Updateable documents attached. Several schedules will be updated from time to time:

  • the products or services provided from time to time;
  • list prices, rebate structures and purchase commitments for the products sold under the master sales agreement;
  • ordering procedures reflected in supply chain and logistical manuals and guidelines of the purchasing enterprise;
  • statements of work: the initial projects are probably well-defined but future projects and services will probably be subject to the principles in the main agreement;
  • in an M&A transaction, the agreements that are in an agreed form but to be signed on the day of completion of the transfer formalities.

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