What is a disclosure schedule?

What is a disclosure schedule?

Also known as schedules. A document that supplements the representations and warranties (and sometimes other provisions) contained in an agreement. Disclosure schedules are typically attached to the end of the agreement and incorporated by reference.

What is a disclosure schedules M&A?

Disclosure schedules are a common component of an M&A purchase agreement, whether a stock purchase agreement, asset purchase agreement, or merger agreement. Disclosure schedules provide fact-specific disclosures (or exceptions to specific statements) relating to the seller’s representations and warranties (reps).

Are disclosure schedules publicly filed?

Disclosure schedules are almost never publicly filed even when the main acquisition agreement is filed. If the parties determine that they need to file the disclosure schedules to comply with the federal securities laws or otherwise, they should carefully consider the implications of any public disclosures.

What is a disclosure letter in M&A?

A key document in any acquisition of the shares in, or the business and assets of, a private limited company. The letter is prepared by the seller in the transaction and includes general and specific disclosures regarding the seller’s warranties in the acquisition agreement.

What are reps and warranties M&A?

A representation is an assertion of past or existing fact given by one party to induce another party to enter into an agreement. A warranty is a promise that the assertion of existing fact or future facts are or will be true, along with an implied promise of indemnity if the assertion is false.

What is a letter of disclosure?

A disclosure letter is a key document in many transactions, particularly business, asset and share sales. It does this by outlining specific information which the buyer should know about the business, which will help inform their decision about whether they wish to proceed with the purchase.

What are representations and warranties in M&A?

What is exception schedule?

What is a Schedule of Exceptions on a Title Policy? From the home buyer’s perspective, a schedule of exceptions details any limitations, reservations, or encumbrances on a property.

What is disclosure in a transaction?

The disclosure process involves the preparation of the disclosure letter by the seller, which will be finalised and signed at exchange. It allows the seller to qualify the warranties set out in the warranties schedule of the share purchase agreement and thereby limit its potential liability under them.

What is the difference between reps and warranties?

A representation is an assertion as to a fact, true on the date the representation is made, that is given to induce another party to enter into a contract or take some other action. A warranty is a promise of indemnity if the assertion is false.

What is the difference between representations and warranties and covenants?

The key difference among these words is temporal – past and present for representations; past, present, but mainly future for warranties; and mainly future for covenants. The remedies for a false representation, breach of a warranty or violation of a covenant also have differed.

What is a disclosures schedule?

Disclosure schedules are generally one of the most arduous and important components of an acquisition transaction. An essential part of defining and impacting the scope of the seller’s responsibilities and warranties, the disclosure schedule offers factual disclosures pertaining to the purchase agreement.

What is an M&A disclosure schedule?

This article is more than 5 years old. Disclosure schedules are an integral part of any merger or acquisition (M&A) transaction.

When is a disclosure schedule required for a merger or acquisition?

The exception to this is when the merger or acquisition agreement stipulates a simultaneous signing and closing, meaning that the transaction is actually completed at the time of the signing. While a disclosure schedule is generally a part of the purchase agreement, it will typically be framed as to the date of the signing.

What is missing from the schedules?

The schedule for employees is missing salary, bonus, or other key information. The schedules are missing the listing of any employment agreements or officer or director indemnification agreements. The schedules on the largest customers or suppliers are missing key data (such as dollar amounts involved or a description of the relationship).