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Venture Debt Compliance Certificate and Covenant Testing Schedule

Matter Completion Sheet

COMPLIANCE CERTIFICATE

Certificate number: °Úâ—® of [YEAR]
Date delivered: [DATE]
Reporting type: [MONTHLY / QUARTERLY / ANNUAL / EVENT-DRIVEN]
Testing Period: [START DATE] through [END DATE]
Testing Date: [DATE]
Borrower: [BORROWER LEGAL NAME], a [STATE] [ENTITY TYPE]
Other Loan Parties: [GUARANTOR LEGAL NAMES, OR “NONE”]
Lender: [LENDER LEGAL NAME] [, AS AGENT FOR THE LENDERS]
Loan Agreement: [TITLE], dated as of [DATE], as amended by [LIST AMENDMENTS AND WAIVERS, OR “NOT AMENDED”]
Delivery method and address: [PORTAL / E-MAIL / COURIER PER SECTION °Ú§±Õ OF THE LOAN AGREEMENT]

The undersigned, a Responsible Officer of Borrower, delivers this Compliance Certificate under Section °Ú§±Õ of the Loan Agreement for the Testing Period stated above. Capitalized terms used and not defined in this certificate have the meanings given in the Loan Agreement. References to a Schedule are to the schedules attached to this certificate. If this certificate conflicts with the Loan Agreement, the Loan Agreement controls, and nothing in this certificate amends, supplements or interprets the Loan Agreement.

1 Testing Period, Delivery and Defined Terms

1.1 Testing Period and Delivery Date

This certificate covers the Testing Period ending on the Testing Date stated above and is delivered [ON / BEFORE] the date required by Section °Ú§±Õ of the Loan Agreement, which is [NUMBER] days after the end of each [MONTH / FISCAL QUARTER / FISCAL YEAR]. [Delivery is timely.] [Delivery is [NUMBER] days late; the reason, the notice given to Lender and the status of any resulting Default appear on Schedule 14.]

1.2 Defined Terms Used in this Certificate

The following terms are used in this certificate and its Schedules. Where the Loan Agreement defines the same term, the Loan Agreement definition controls and the Schedule must cite the defining section. Terms used with the meanings given in the Loan Agreement and not restated here include Business Day, Cash Equivalents, Collateral, Commitment, Control Agreement, Eligible Accounts, Indebtedness, Intellectual Property, Investment, Lien, Loan Documents, Loan Party, Material Contract, Obligations, Perfection Certificate, Restricted Payment, Subsidiary and Tranche; list each in the defined-term map with its Loan Agreement section.

Adjusted EBITDA means net income (loss) determined under the Accounting Basis plus the add-backs and minus the deductions expressly permitted by Section °Ú§±Õ of the Loan Agreement, computed on Schedule 6. No add-back is permitted unless the Loan Agreement names it or Lender has approved it in writing.

Accounting Basis means [UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES / THE ACCOUNTING BASIS SPECIFIED IN SECTION °Ú§±Õ OF THE LOAN AGREEMENT], applied consistently with the financial statements most recently delivered to Lender, subject to Section 3.

ARR or Annualized Recurring Revenue has the meaning in Section °Ú§±Õ of the Loan Agreement, computed on Schedule 3, and excludes every item listed in that definition and in Schedule 3, Part B.

Board Plan means the annual operating plan and budget for fiscal year [YEAR] approved by Borrower’s board of directors on [DATE] and delivered to Lender on [DATE] under Section °Ú§±Õ of the Loan Agreement, as revised by any later board-approved revision delivered to Lender on [DATE].

Burn or Net Cash Burn means, for a measurement period, the decrease in Qualified Cash computed under Section °Ú§±Õ of the Loan Agreement and Schedule 5, excluding the items that the Loan Agreement expressly excludes (typically proceeds of equity and Permitted Indebtedness and scheduled principal payments on the Obligations).

Cushion means, for each Covenant, the amount by which the actual level exceeds (or, for a maximum covenant, falls below) the required level, stated in dollars and as a percentage of the required level.

Covenant means each financial covenant in Section °Ú§±Õ and Schedule °Ú§±Õ of the Loan Agreement tested for the Testing Period.

Default and Event of Default have the meanings in Section °Ú§±Õ of the Loan Agreement. A Default is an event that, with notice, passage of time or both, would become an Event of Default.

Early-Warning Threshold means the Cushion level, stated in Schedule 12, Part C, below which the escalation protocol in Schedule 12 applies. The Early-Warning Threshold is an internal control and does not create a Covenant unless the Loan Agreement expressly incorporates it.

Equity Cure means a cure of a financial-covenant breach by the contribution of cash equity proceeds under Section °Ú§±Õ of the Loan Agreement, elected on Schedule 13 and computed on Schedule 12, Part F.

Knowledge means the actual knowledge of the Responsible Officer after the inquiry described in Section 10.2, without any duty to investigate matters outside the records and personnel identified there.

Material Adverse Effect has the meaning in Section °Ú§±Õ of the Loan Agreement and is used in this certificate only where the Loan Agreement uses it.

Permitted Indebtedness, Permitted Liens, Permitted Investments, Permitted Transfers and Permitted Distributions have the meanings in Section °Ú§±Õ and Schedule °Ú§±Õ of the Loan Agreement and are tracked on Schedule 10.

Projected Breach means a projected failure of a Covenant at a future Testing Date under the current Board Plan, as computed on Schedule 12. A Projected Breach is a planning conclusion, not a Default, and is reported under Section 9.

Qualified Cash (or Unrestricted Cash, if the Loan Agreement uses that term) means cash and Cash Equivalents of Borrower held in deposit or securities accounts subject to a control agreement in favor of Lender (or otherwise satisfying Section °Ú§±Õ of the Loan Agreement), excluding restricted cash, cash collateral, escrowed amounts, customer funds, payroll and tax accounts, and amounts held outside the United States except to the extent the Loan Agreement permits.

Reporting Package means the deliverables listed in Section 2 and Schedule 9 required by Section °Ú§±Õ of the Loan Agreement for the Testing Period.

Responsible Officer means the chief executive officer, president, chief financial officer, treasurer or controller of Borrower, or another officer designated in Section °Ú§±Õ of the Loan Agreement or by board resolution delivered to Lender.

Testing Date means the last day of the Testing Period, or the other date on which the Loan Agreement requires the relevant Covenant to be measured.

Testing Period means the [MONTH / FISCAL QUARTER / TRAILING TWELVE-MONTH PERIOD] for which this certificate is delivered, or the different measurement period that the Loan Agreement specifies for a particular Covenant.

Trend means the direction and rate of change of a Covenant’s Cushion over the current Testing Period and the two preceding Testing Periods, as reported in Schedules 2 through 8 and summarized in Section 4.

1.3 Interpretation and Conflicts

1. Section and Schedule references in this certificate marked °Ú§±Õ refer to the Loan Agreement; unmarked references refer to this certificate.
2. Amounts are stated in United States dollars unless otherwise indicated. Foreign-currency amounts are converted at the rate and date required by Section °Ú§±Õ of the Loan Agreement, or if none, at the rate used in the financial statements for the Testing Period, and the rate is stated on Schedule 1.
3. Rounding follows Schedule 1. A Covenant is tested on unrounded amounts; rounding is applied only to presentation.
4. Nothing in this certificate is an admission of liability to any person other than Lender, and this certificate is delivered subject to the confidentiality provisions of Section °Ú§±Õ of the Loan Agreement.

2 Reporting Package Delivered

The following items accompany this certificate or were previously delivered for the Testing Period. Each item is cross-referenced to the reporting covenant in Section °Ú§±Õ and Schedule °Ú§±Õ of the Loan Agreement. Mark each item Delivered, Previously Delivered on [DATE], Not Required for this Testing Period or Exception (see Schedule 16).

3 Certification of Financial Statements

3.1 Accounting Basis and Fair Presentation

The financial statements delivered with this certificate were prepared in accordance with the Accounting Basis and fairly present in all material respects the consolidated financial condition of Borrower and its Subsidiaries as of the Testing Date and the results of operations and cash flows for the Testing Period, subject to (a) the absence of footnotes, (b) normal recurring year-end audit adjustments, none of which is expected to be material individually or in the aggregate, and (c) the departures, estimates and adjustments described on Schedule 11.

3.2 Consistency

The Accounting Basis was applied consistently with the financial statements most recently delivered to Lender, except for the changes in accounting principle, estimate or presentation listed below, each of which is described on Schedule 11 with its effect on each Covenant:

3.3 Audit Status and Qualifications

For an annual certificate, the audited financial statements delivered under Section 2.14 are accompanied by the report of [AUDIT FIRM], which [IS UNQUALIFIED / CONTAINS THE FOLLOWING QUALIFICATION, EXPLANATORY PARAGRAPH OR GOING-CONCERN EMPHASIS: °Úâ—®]. For an interim certificate, the statements are unaudited and [HAVE / HAVE NOT] been reviewed by Borrower’s independent accountants.

4 Financial Covenant Compliance Summary

The following summary is drawn from Schedules 2 through 8. Each Covenant is tested as of its own Testing Date and for its own measurement period under the Loan Agreement. Complete only the Covenants that the Loan Agreement contains and delete the others.

For each Covenant, the attached Schedule shows a reproducible calculation that begins with the source financial-statement or ledger balance, states each contractual adjustment separately, cites the Loan Agreement section that authorizes the adjustment, and identifies the preparer, reviewer and evidence location. Labels such as “adjusted,” “eligible,” “unrestricted,” “recurring” and “consolidated” are used in this certificate only with the meaning given by the defined term they refer to.

Cushion and Trend are reported for information. A declining Trend with a passing result is not a Default. Where Cushion is below the Early-Warning Threshold, Schedule 12 states the actions Borrower has taken or proposes to take.

5 Defaults and Events of Default

5.1 Statement

[Select one.]

1. To the Knowledge of the undersigned, no Default or Event of Default [HAS OCCURRED AND IS CONTINUING AS OF THE DATE OF THIS CERTIFICATE / OCCURRED DURING THE TESTING PERIOD OR IS CONTINUING AS OF THE DATE OF THIS CERTIFICATE].

2. Except as described in Section 5.3 and on Schedule 14, to the Knowledge of the undersigned, no Default or Event of Default [HAS OCCURRED AND IS CONTINUING / OCCURRED DURING THE TESTING PERIOD OR IS CONTINUING].

5.2 Temporal Standard

The statement in Section 5.1 uses the temporal standard in Section °Ú§±Õ of the Loan Agreement. If the Loan Agreement requires a statement that no Default “has occurred” during the Testing Period, a Default that occurred and was cured within the period must still be disclosed. If the Loan Agreement requires a statement only that no Default “is continuing,” a cured Default need not be disclosed in Section 5.1 but is recorded on Schedule 14.

5.3 Description of Each Default or Event of Default

For each matter disclosed, state the following. Repeat for each matter and carry the matter to Schedule 14.

5.4 Cure and Waiver Status

A matter is marked Cured only if the cure is permitted by the Loan Agreement, was completed within the applicable period, and every consequential requirement (for example, delivery of the late report, payment of any fee, recalculation of the Covenant after an Equity Cure) has been satisfied. A matter is marked Waived only if a written waiver signed by Lender (and any required percentage of Lenders) has been delivered and its conditions have been satisfied. A matter covered by a reservation-of-rights letter, an oral assurance or Lender’s silence is marked Open. Resumption of performance does not cure a Default, and disclosure in this certificate is not a waiver by Lender or an admission by Borrower beyond the facts stated.

6 Bring-Down of Representations

The representations and warranties of each Loan Party in Section °Ú§±Õ of the Loan Agreement and the other Loan Documents are true and correct [IN ALL MATERIAL RESPECTS (OR, FOR ANY REPRESENTATION ALREADY QUALIFIED BY MATERIALITY OR MATERIAL ADVERSE EFFECT, IN ALL RESPECTS)] on and as of the date of this certificate as if made on this date, except (a) representations that by their terms speak only as of a specified date, which were true and correct in all material respects as of that date, and (b) the matters listed below, each of which updates the corresponding disclosure schedule to the extent Section °Ú§±Õ of the Loan Agreement permits a schedule update by delivery of a compliance certificate.

7 Key-Event Notices

Each event below that occurred during the Testing Period (or earlier, if not previously reported) is described, with the Loan Agreement notice section, the date Borrower first had Knowledge, the date notice was given and the status of any required action, on Schedule 15. If no event in a category occurred, state None. Delivery of this certificate satisfies a notice obligation only to the extent Section °Ú§±Õ of the Loan Agreement permits notice to be given in a compliance certificate; notices that the Loan Agreement requires within a stated number of days after the event must be delivered separately and are listed here for completeness.

7.1 Litigation, Claims and Governmental Proceedings

Any action, suit, arbitration, investigation or governmental inquiry commenced or threatened in writing against a Loan Party (a) seeking damages or asserting a claim above $[THRESHOLD], (b) seeking injunctive relief that could reasonably be expected to have a Material Adverse Effect, (c) challenging the validity of any Loan Document or Lien, or (d) involving a regulator with authority over Borrower’s business; and any judgment, settlement or material development in a previously reported matter.

7.2 Liens, Indebtedness and Judgments

Any Lien filed, granted or discovered on any Collateral (other than a Permitted Lien previously disclosed), any notice of tax lien or levy, any judgment entered against a Loan Party above $[THRESHOLD], any incurrence of Indebtedness for borrowed money, any new equipment lease, merchant-cash advance, revenue-based financing, convertible instrument or guarantee, and any default or acceleration asserted under other Indebtedness above $[THRESHOLD].

7.3 Material Contracts

Any termination, non-renewal, material amendment, material breach or notice of default under a Material Contract (as defined in Section °Ú§±Õ), any loss of or material reduction in business from a customer representing more than °Úâ—®% of ARR or trailing-twelve-month revenue, any new contract containing a negative pledge, debt restriction, exclusivity, change-of-control or anti-assignment provision that could affect the Collateral, and any grant of an exclusive license or other transfer of rights in material Intellectual Property.

7.4 Intellectual Property

Any new registration or application for a patent, trademark or copyright owned by a Loan Party (to the extent Section °Ú§±Õ requires notice or a supplement to the IP security agreement), any abandonment, lapse or loss of registered Intellectual Property that is material to the business, any claim of infringement made by or against a Loan Party, any open-source or third-party license issue that could reasonably be expected to impair ownership of material Intellectual Property, and any assignment of Intellectual Property to or from a Loan Party.

7.5 Insurance

Any cancellation, non-renewal, reduction in coverage or limits, change in carrier, lapse, or receipt of insurance proceeds above $[THRESHOLD] with respect to the policies required by Section °Ú§±Õ, and confirmation that Lender remains named as loss payee and additional insured as required.

7.6 Changes in Name, Organization, Locations and Accounts

Any change in a Loan Party’s legal name, type of organization, jurisdiction of organization or organizational identification number; any change in the location of its chief executive office, books and records, or any location holding Collateral with a value above $[THRESHOLD]; any new, closed or changed deposit, securities, commodities or payment-processor account; and whether a control agreement, financing statement amendment or other perfection step has been completed for each change within the period that Section °Ú§±Õ requires.

7.7 Other Notice Events

Any formation or acquisition of a Subsidiary; any departure or replacement of a key person identified in Section °Ú§±Õ; any equity financing, term sheet accepted, or change of control proposal; any material data-security incident required to be reported under Section °Ú§±Õ; any ERISA, tax, sanctions or regulatory event the Loan Agreement requires to be reported; any Material Adverse Effect or any event that Borrower reasonably expects could result in a Material Adverse Effect; and any other event that the Loan Agreement requires to be reported.

8 Restricted-Action and Basket Compliance

Each action during the Testing Period that was permitted by reliance on a basket, exception or dollar threshold in Section °Ú§±Õ of the Loan Agreement is identified on Schedule 10 with the counterparty, date, amount, purpose, exception relied upon, prior usage, current usage and remaining capacity. Where more than one exception could apply, the primary exception is designated and no amount is counted against more than one basket. The following summaries are drawn from Schedule 10.

8.1 Indebtedness

Loans, notes, capital and finance leases, deferred purchase price, earn-outs, guarantees, letters of credit, merchant advances, revenue-based financing, convertible instruments and other obligations treated as Indebtedness under Section °Ú§±Õ are listed on Schedule 10, Part A, reconciled to the balance sheet, with intercompany obligations stated separately. Total Indebtedness outstanding at the Testing Date: $°Úâ—®. Permitted Indebtedness capacity remaining under each basket: see Schedule 10, Part A.

8.2 Liens

Liens granted, filed, discovered, continued, amended or released during the Testing Period are listed on Schedule 10, Part B, with the secured obligation, Collateral affected, filing office and Permitted Lien category. A Permitted Indebtedness item is not necessarily secured by a Permitted Lien; both covenants are tested.

8.3 Investments and Acquisitions

Equity purchases, Subsidiary formations and capitalizations, joint ventures, loans and advances (including employee loans and advances above $[THRESHOLD]), acquisitions, digital assets and other items within the definition of Investment in Section °Ú§±Õ are listed on Schedule 10, Part C, with noncash consideration and contingent obligations identified.

8.4 Transfers and Dispositions

Sales, transfers, exclusive licenses, abandonments of material Intellectual Property, sale-leasebacks and other dispositions outside the ordinary course (as defined in Section °Ú§±Õ) are listed on Schedule 10, Part D, with gross and net proceeds, any mandatory prepayment or reinvestment requirement under Section °Ú§±Õ, and whether Lender consent was obtained.

8.5 Distributions

Dividends, redemptions, repurchases (including repurchases from departing service providers under equity plans), payments on subordinated debt, and other Restricted Payments under Section °Ú§±Õ are listed on Schedule 10, Part E, with the exception relied upon and the remaining capacity under any dollar basket.

8.6 Affiliate Transactions

Transactions with founders, directors, officers, holders of more than °Úâ—®% of any class of equity, their affiliates and related parties are listed on Schedule 10, Part F, with the approval process, disinterested review, economic terms and the exception relied upon under Section °Ú§±Õ.

9 Liquidity, Runway and Forward-Looking Statement

9.1 Liquidity and Runway Snapshot

Because a point-in-time Covenant can be satisfied while near-term liquidity is under pressure, Borrower provides the following operational view. This Section creates no Covenant and no representation about future results.

No unsigned term sheet, verbal commitment, insider bridge indication or discretionary investor support is treated as committed capital.

9.2 Forward-Looking Covenant Test

Schedule 12 presents management’s good-faith projection of each Covenant for the next two Testing Periods under the current Board Plan and under the downside case, with the first Projected Breach date (if any), the Cushion relative to the Early-Warning Threshold and the actions taken or proposed. [No Projected Breach is identified for the next two Testing Periods.] [A Projected Breach of the [COVENANT] is identified for the Testing Period ending [DATE] under the [BOARD PLAN / DOWNSIDE CASE]; Schedule 12, Parts D and E, describe the escalation steps taken and the proposed path.]

The projections in Schedule 12 are planning information based on assumptions that may not be realized. They are not certified historical facts, are not a representation or warranty, and are delivered under the confidentiality provisions of Section °Ú§±Õ of the Loan Agreement. Nothing in this Section or Schedule 12 obligates Lender to amend, waive or forbear, and nothing obligates Borrower to achieve the Board Plan.

10 Officer Capacity, Knowledge Standard and Limitations

10.1 Capacity

The undersigned signs this certificate solely in the capacity of [TITLE] of Borrower, as a Responsible Officer under Section °Ú§±Õ of the Loan Agreement, and not individually. No personal liability attaches to the undersigned for the statements in this certificate except to the extent imposed by applicable law for knowing misconduct.

10.2 Knowledge Standard and Inquiry

Each statement in this certificate that is qualified by Knowledge is made after inquiry of the following persons and review of the following records, and the undersigned has no Knowledge of any fact that makes a statement in this certificate untrue or misleading in any material respect:

10.3 Matters Not Certified

This certificate does not (a) express any legal opinion, including as to the enforceability of any Loan Document, the perfection or priority of any Lien, or whether any fact constitutes a Default; (b) express any opinion on solvency; (c) certify the accuracy of information supplied by third parties except as the Responsible Officer has Knowledge to the contrary; (d) certify any projection, forecast or Board Plan as a fact; (e) certify compliance with any covenant not tested for this Testing Period; (f) waive, amend or interpret any provision of the Loan Agreement; or (g) certify any matter within the exclusive knowledge or control of Lender, including the correctness of Lender’s loan account records or the status of filings made by Lender.

10.4 Reliance and Records

Lender may rely on this certificate only as provided in the Loan Agreement. Borrower will retain the signed certificate and Schedules, the calculation workpapers, source reports, defined-term map, approval evidence, reviewer sign-off and delivery receipt for not less than [NUMBER] years after the Obligations are paid in full, consistent with Borrower’s records-retention policy and Section °Ú§±Õ of the Loan Agreement.

11 Signature

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as a Responsible Officer of Borrower on the date first stated above.

BORROWER: [BORROWER LEGAL NAME]

By: ______________________________
Name: [NAME]
Title: [TITLE]
Date and time: [DATE, TIME AND TIME ZONE]

Prepared by: [NAME, TITLE]
Reviewed by: [NAME, TITLE] (independent of preparer)
Counsel review of Sections 5, 6, 7 and 10: [NAME / FIRM, DATE]
Board or finance-committee presentation date: [DATE] (see Practitioner Note 13)

PART I — COVENANT COMPUTATION SCHEDULES

Each of Schedules 2 through 8 follows the same structure: (A) definition citation; (B) formula; (C) components with source; (D) actual, required, result and Cushion; (E) Trend; (F) preparer, reviewer and evidence. Complete only the Schedules for Covenants that the Loan Agreement contains and delete the rest. Where a Covenant steps up over time, state the required level for this Testing Date and the next two step-ups.

Schedule 1 — Computation Conventions and Source Data Map

Part A — Conventions

Part B — Source Data Map

Schedule 2 — Minimum Liquidity and Minimum Qualified Cash

Part A — Definition Citation

Covenant: Section °Ú§±Õ of the Loan Agreement. Defined terms: Qualified Cash (Section °Ú§±Õ); Liquidity (Section °Ú§±Õ, if used, typically Qualified Cash plus °Úâ—®% of eligible accounts receivable or plus undrawn availability); Cash Equivalents (Section °Ú§±Õ); Control Agreement (Section °Ú§±Õ).

Part B — Formula

Qualified Cash = (sum of balances in accounts listed in Part C that are subject to a Control Agreement or otherwise qualify under Section °Ú§±Õ) − (restricted cash, cash collateral, escrowed funds, customer funds, payroll and tax accounts, and uncleared items the Loan Agreement excludes).

Liquidity (if applicable) = Qualified Cash + °Úâ—®% × Eligible Accounts (per Section °Ú§±Õ) + undrawn committed Tranche availability (only if Section °Ú§±Õ counts it).

Part C — Components

Eligible Accounts component (if Liquidity is tested): gross accounts receivable $°Úâ—® less ineligibles (over [90] days $°Úâ—®; affiliate $°Úâ—®; foreign $°Úâ—®; contra $°Úâ—®; concentration above °Úâ—®% $°Úâ—®) = Eligible Accounts $°Úâ—® × °Úâ—®% = $°Úâ—®.

Part D — Result

Part E — Trend

Part F — Preparer, Reviewer and Evidence

Preparer: °Úâ—®. Reviewer: °Úâ—®. Evidence: bank statements and balance confirmations as of the Testing Date, Control Agreement register, account inventory reconciled to the Perfection Certificate, located at °Úâ—®.

Schedule 3 — Minimum Revenue and Minimum ARR

Part A — Definition Citation

Covenant: Section °Ú§±Õ of the Loan Agreement. Defined terms: Revenue (Section °Ú§±Õ, typically recognized revenue under the Accounting Basis for the measurement period); ARR or Annualized Recurring Revenue (Section °Ú§±Õ); Recurring Revenue Contract (Section °Ú§±Õ); Churn (Section °Ú§±Õ, if used); Trailing Twelve-Month Revenue (Section °Ú§±Õ).

The ARR definition applied in this Schedule is quoted from Section °Ú§±Õ of the Loan Agreement:

Part B — ARR Inclusions and Exclusions Under the Loan Agreement Definition

Part C — Computation

If the Covenant tests Revenue rather than ARR: recognized Revenue for the [TTM / trailing three months / quarter] ended on the Testing Date per the statement of operations: °Úâ—®, lessexcludedrevenuecategoriesunderSection°Ú§±Õ : (°Úâ—®) = tested Revenue $°Úâ—®.

Part D — Result

Part E — Trend

Part F — Preparer, Reviewer and Evidence

Preparer: °Úâ—®. Reviewer: °Úâ—®. Evidence: contract database export as of the Testing Date, billing-system report, churn log, revenue-recognition workpapers, reconciliation to the general ledger, located at °Úâ—®.

Schedule 4 — Performance to Plan

Part A — Definition Citation

Covenant: Section °Ú§±Õ of the Loan Agreement. Defined terms: Board Plan (Section °Ú§±Õ and Section 1.2); Plan Revenue or Plan Metric (Section °Ú§±Õ); measurement period and cumulative or period-by-period basis (Section °Ú§±Õ); the percentage threshold (Section °Ú§±Õ); the mechanism by which a revised Board Plan becomes the tested plan (Section °Ú§±Õ, typically requiring Lender’s written acceptance).

Part B — Formula

Performance to Plan (%) = Actual [REVENUE / ARR / NET CASH BURN / OTHER PLAN METRIC] for the measurement period ÷ Board Plan amount for the same metric and period × 100.

For a Burn-based plan covenant the test is inverted: Actual Net Cash Burn must not exceed °Úâ—®% of Board Plan Net Cash Burn.

Part C — Components

Confirm which Board Plan is the tested plan. If the board approved a revised plan during the Testing Period, state whether Lender accepted the revision under Section °Ú§±Õ and, if not, test against the last plan Lender accepted and show the revised plan for information only.

Part D — Result

Part E — Trend

Part F — Preparer, Reviewer and Evidence

Preparer: °Úâ—®. Reviewer: °Úâ—®. Evidence: board resolution approving the Board Plan, transmittal to Lender, Lender’s acceptance (if required), budget-to-actual report, located at °Úâ—®.

Schedule 5 — Burn Multiple and Minimum Runway

Part A — Definition Citation

Covenant: Section °Ú§±Õ of the Loan Agreement. Defined terms: Net Cash Burn or Burn (Section °Ú§±Õ); Burn Multiple (Section °Ú§±Õ, if used); Net New ARR (Section °Ú§±Õ); Remaining Months’ Liquidity or Runway (Section °Ú§±Õ); excluded cash flows (Section °Ú§±Õ, typically proceeds of equity issuances and Permitted Indebtedness, scheduled principal payments on the Obligations, and one-time items Lender has approved).

Part B — Formulas

Net Cash Burn for a period = Qualified Cash at the beginning of the period − Qualified Cash at the end of the period + proceeds of equity and Permitted Indebtedness received during the period − principal payments on the Obligations made during the period [± other adjustments expressly permitted by Section °Ú§±Õ]. A negative result (cash increased from operations) is reported as zero Burn or as negative Burn, as the Loan Agreement directs.

Burn Multiple = Net Cash Burn for the measurement period ÷ Net New ARR for the same period (Schedule 3, Part D).

Runway (months) = Qualified Cash at the Testing Date ÷ average monthly Net Cash Burn for the trailing [3 / 6] months. If the Loan Agreement includes undrawn committed Tranche availability in the numerator, state it separately.

Part C — Components

Part D — Result

Part E — Trend

Part F — Preparer, Reviewer and Evidence

Preparer: °Úâ—®. Reviewer: °Úâ—®. Evidence: monthly bank balances, cash-flow statement, equity and debt proceeds evidence, lender payment statements, located at °Úâ—®.

Schedule 6 — Adjusted EBITDA and Add-Back Schedule

Part A — Definition Citation

Covenant: Section °Ú§±Õ of the Loan Agreement. Defined terms: EBITDA (Section °Ú§±Õ); Adjusted EBITDA (Section °Ú§±Õ); each enumerated add-back and deduction (Section °Ú§±Õ, clauses °Úâ—® through °Úâ—®); any cap on add-backs (Section °Ú§±Õ); measurement period (Section °Ú§±Õ).

Part B — Formula

Adjusted EBITDA = Net income (loss) under the Accounting Basis + interest expense + income tax expense + depreciation + amortization + each add-back expressly permitted by Section °Ú§±Õ − each deduction expressly required by Section °Ú§±Õ, for the measurement period, subject to any aggregate cap on add-backs.

Part C — Add-Back and Deduction Schedule

Aggregate add-backs subject to the cap in Section °Ú§±Õ: $°Úâ—® against a cap of $°Úâ—® or °Úâ—®% of EBITDA before add-backs; remaining capacity $°Úâ—®.

Part D — Result

Part E — Trend

Part F — Preparer, Reviewer and Evidence

Preparer: °Úâ—®. Reviewer: °Úâ—®. Evidence: statement of operations, general-ledger detail for each add-back line, board approvals for restructuring items, Lender approvals for discretionary add-backs, located at °Úâ—®.

Schedule 7 — Leverage and Debt-to-ARR

Part A — Definition Citation

Covenant: Section °Ú§±Õ of the Loan Agreement. Defined terms: Total Debt or Funded Indebtedness (Section °Ú§±Õ, typically all Indebtedness for borrowed money, capital and finance leases and the Obligations, excluding or including subordinated and convertible instruments as stated); Net Debt (Section °Ú§±Õ, Total Debt less Qualified Cash, if used); Leverage Ratio (Section °Ú§±Õ); Debt-to-ARR (Section °Ú§±Õ).

Part B — Formula

Debt-to-ARR = Total Debt (or Net Debt) at the Testing Date ÷ ARR at the Testing Date (Schedule 3, Part D).

Leverage Ratio (if EBITDA-based) = Total Debt at the Testing Date ÷ Adjusted EBITDA for the trailing twelve months (Schedule 6, Part D).

Part C — Components

Part D — Result

Part E — Trend

Part F — Preparer, Reviewer and Evidence

Preparer: °Úâ—®. Reviewer: °Úâ—®. Evidence: debt schedule reconciled to the balance sheet, lender statements, lease schedules, convertible-instrument ledger, located at °Úâ—®.

Schedule 8 — Customer Concentration

Part A — Definition Citation

Covenant: Section °Ú§±Õ of the Loan Agreement (if the Loan Agreement contains a concentration covenant or a concentration-based eligibility exclusion for Liquidity). Defined terms: Customer (Section °Ú§±Õ, including treatment of affiliated customers as a single customer); measurement basis (Section °Ú§±Õ, ARR, TTM revenue or accounts receivable); maximum concentration (Section °Ú§±Õ).

Part B — Formula

Concentration (%) = [ARR / TTM revenue / accounts receivable] attributable to the single largest Customer (and, if tested, the largest [3 / 5 / 10] Customers) ÷ total [ARR / TTM revenue / accounts receivable] × 100.

Part C — Components

Part D — Result

Part E — Trend

Part F — Preparer, Reviewer and Evidence

Preparer: °Úâ—®. Reviewer: °Úâ—®. Evidence: revenue-by-customer report, contract database, affiliate mapping, located at °Úâ—®.

PART II — ADMINISTRATIVE AND FORWARD-LOOKING SCHEDULES

Schedule 9 — Reporting Deliverables Calendar

Maintain this calendar for the full fiscal year and update it on each amendment. The contractual due date is the date in the Loan Agreement; the internal preparation date is the date by which the preparer must deliver a complete draft to the reviewer. Grace periods appear only in the escalation column.

Part A — Monthly Deliverables

Part B — Quarterly Deliverables

Part C — Annual Deliverables

Part D — Event-Driven Deliverables

Schedule 10 — Negative-Covenant Basket Utilization Tracker

Each Part tracks capacity, usage during the Testing Period, cumulative usage and remaining capacity for each basket in Section °Ú§±Õ and Schedule °Ú§±Õ of the Loan Agreement. A basket is tested when the action is taken. Where a basket is expressed as a percentage of a financial measure, state the measure, its amount at the time of the action and the resulting dollar capacity. Do not count any amount against more than one basket; designate the primary basket and note any alternative.

Part A — Permitted Indebtedness

Part B — Permitted Liens

Part C — Permitted Investments

Part D — Permitted Transfers and Dispositions

Part E — Permitted Distributions and Restricted Payments

Part F — Affiliate Transactions

Part G — Basket Summary for Section 8

Schedule 11 — GAAP-to-Covenant Reconciliation

This Schedule bridges each financial-statement amount to the corresponding amount used in a Covenant calculation, and discloses the accounting departures, estimates and changes referenced in Section 3. Each bridge item must cite the Loan Agreement section that authorizes the adjustment or state that the item is a required disclosure with no covenant effect.

Part A — Reconciliation Bridges

Part B — Accounting Departures, Estimates and Changes

Schedule 12 — Forward-Looking Covenant Test and Early-Warning Protocol

PROJECTIONS — NOT CERTIFIED FACTS. This Schedule contains management’s good-faith projections based on the Board Plan and stated assumptions. It is not a representation, warranty or covenant, and actual results will differ. It is delivered for planning and under the confidentiality provisions of Section °Ú§±Õ of the Loan Agreement. Nothing in this Schedule obligates Lender to amend, waive or forbear.

Part A — Projected Compliance for the Next Two Testing Periods (Board Plan Case)

Part B — Downside Case

State the downside case the board uses for liquidity planning (typically bookings at °Úâ—®% of Board Plan, churn at °Úâ—®x plan, collections slower by °Úâ—® days, and no new financing). Re-run Part A under that case.

Sensitivity: the single assumption change that would cause the earliest Projected Breach is °Úâ—® (for example, a °Úâ—®% shortfall in new bookings or a °Úâ—®-day slip in collections), which would move the first Projected Breach to [DATE] for the [COVENANT].

Part C — Early-Warning Thresholds

The following thresholds are internal controls adopted by [THE BOARD / THE FINANCE COMMITTEE / MANAGEMENT] on [DATE]. They are not Covenants and are not incorporated into the Loan Agreement unless the Loan Agreement expressly so provides.

Current status for this Testing Period: [GREEN / AMBER / RED] because °Úâ—®.

Part D — Escalation Protocol: Triggers, Persons Informed and Timing

Part E — Actions When a Future Breach Is Projected

1. Projected-breach notice to Lender. A voluntary written notice that (a) identifies the Covenant and the Testing Date of the Projected Breach; (b) states the projected shortfall under the Board Plan case and the downside case; (c) describes the cause (timing, bookings, churn, collections, one-time costs, financing delay); (d) describes the mitigation under way and its expected effect; (e) states the path Borrower proposes (waiver, Equity Cure, amendment, prepayment); and (f) states expressly that the notice is a projection, not an admission that a Default has occurred, and is delivered without prejudice to any position under the Loan Agreement. Deliver the notice after board authorization and not later than the level-3 timing above. Mark the notice confidential under Section °Ú§±Õ.

2. Waiver request. A waiver addresses a single Testing Date. Request it when the Projected Breach is isolated (one Covenant, one period, a clear timing cause and a return to compliance projected for the following period). Deliver the request at least [30] days before the Testing Date, attach the projection, the cause and the return-to-compliance path, and request that the waiver (a) be a full waiver of the Default and Event of Default for the Testing Date, not a forbearance; (b) not impose default interest; (c) not reset or add Covenants; and (d) confirm that Lender’s conditions to future advances are satisfied. Expect Lender to ask for a waiver fee (typically 0.25 to 1.0 percent of outstanding principal or a fixed amount), reimbursement of counsel fees, and sometimes a tightening of reporting frequency. Confirm whether the waiver requires consent of all Lenders or a majority.

3. Equity Cure. If Section °Ú§±Õ of the Loan Agreement permits an Equity Cure, the cure allows Borrower to add cash equity proceeds received within the cure window (typically 10 to 15 Business Days after the compliance certificate for the breached period is due) to the relevant Covenant component (Qualified Cash, Adjusted EBITDA or Revenue, as the Loan Agreement provides) for the breached Testing Date. Mechanics to confirm before relying on an Equity Cure: (a) the number of cures permitted over the term (commonly two to four) and in consecutive periods (commonly no more than two consecutive); (b) the maximum cure amount (commonly the amount needed to cure, sometimes with a cap); (c) whether the cure proceeds must come from existing investors or may come from any source; (d) whether the proceeds are also counted in later periods (for a liquidity covenant, cash received is real and stays in the balance; for an EBITDA covenant, the deemed addition applies only to periods that include the cured quarter); (e) whether cure proceeds must be used to prepay the Obligations; (f) whether Lender is prohibited from exercising remedies during the cure window; and (g) whether the cure requires a notice of election (Schedule 13) and when. An Equity Cure is a fact-based right, not a negotiation; it is the preferred path when investors are willing to fund and the breach is a liquidity or revenue timing shortfall.

4. Amendment. An amendment is appropriate when the Projected Breach reflects a durable change in the business (a revised Board Plan with lower revenue or higher Burn) rather than a timing issue. Approaches, in increasing order of cost:

Timing: open an amendment discussion with Lender at least [60] days before the Testing Date of the Projected Breach. Lender credit-committee approval commonly takes two to four weeks after agreement in principle, and documentation one to two weeks. An amendment signed after the Testing Date is a waiver plus an amendment, and is priced accordingly.

5. Internal mitigation (in parallel with any of the above). Identify, with owners and dates: collections acceleration and billing-cycle changes; pull-forward of bookings or annual prepayments; deferral or elimination of discretionary spend; hiring freeze or reduction in force (with the one-time severance cost shown as an add-back if permitted); deferral of capital expenditure; intercompany cash repatriation; conversion of non-controlled cash to Qualified Cash by executing Control Agreements; and investor bridge financing structured as equity or as subordinated debt that qualifies as Permitted Indebtedness.

6. Selection record. State the path selected, the body that approved it, the date and the next decision point:

Part F — Equity Cure Computation (if elected)

Part G — Board Reporting of this Schedule

Schedule 13 — Equity Cure Election Form

Deliver this election only if Section °Ú§±Õ of the Loan Agreement permits an Equity Cure and only within the cure window stated there. Conform every reference to the Loan Agreement’s exact cure mechanics. An election delivered late, in the wrong form or without the required funding evidence may be ineffective.

NOTICE OF EQUITY CURE ELECTION

Date: [DATE]
To: [LENDER LEGAL NAME], as [Lender / Agent], at the notice address in Section °Ú§±Õ of the Loan Agreement
From: [BORROWER LEGAL NAME]
Re: Equity Cure under Section °Ú§±Õ of the [TITLE OF LOAN AGREEMENT] dated as of [DATE] (as amended, the “Loan Agreement”) for the Testing Period ended [DATE]

1. Covenant and shortfall. Borrower’s compliance certificate dated [DATE] (or this notice, if delivered before the certificate) reports that the [NAME OF COVENANT] under Section °Ú§±Õ of the Loan Agreement for the Testing Period ended [DATE] was [not satisfied / is not expected to be satisfied], with a required level of $°Úâ—®, an actual level of $°Úâ—® and a shortfall of $°Úâ—®.

2. Election. Borrower elects to exercise its right to an Equity Cure under Section °Ú§±Õ with respect to that Covenant and Testing Period.

3. Cure proceeds. On [DATE], Borrower received $°Úâ—® in cash proceeds from the issuance of [SERIES AND CLASS OF EQUITY / COMMON STOCK / OTHER QUALIFYING EQUITY INTERESTS] to [INVESTOR NAMES OR “THE INVESTORS LISTED ON ANNEX A”] under [NAME OF PURCHASE AGREEMENT] dated [DATE]. The proceeds [ARE / ARE NOT] net of issuance costs of $°Úâ—®, as Section °Ú§±Õ [REQUIRES / PERMITS]. The proceeds were deposited into [ACCOUNT DESCRIPTION, MASKED NUMBER], an account subject to a Control Agreement in favor of Lender. Evidence of receipt is attached as Annex B.

4. Cure amount applied. Borrower designates $°Úâ—® of the proceeds as the Cure Amount, which [EQUALS THE SHORTFALL / DOES NOT EXCEED THE MAXIMUM CURE AMOUNT OF $°Úâ—® UNDER SECTION °Ú§±Õ]. The Cure Amount is to be [ADDED TO QUALIFIED CASH AS OF THE TESTING DATE / INCLUDED IN ADJUSTED EBITDA FOR THE TESTING PERIOD / INCLUDED IN REVENUE FOR THE TESTING PERIOD], as Section °Ú§±Õ provides.

5. Recalculation. After giving effect to the Cure Amount, the [NAME OF COVENANT] for the Testing Period ended [DATE] is $°Úâ—® against a required level of $°Úâ—®, and the Covenant is satisfied. The recalculation is attached as Annex C (in the form of Schedule 12, Part F).

6. Cure limits. Including this election, Borrower has exercised [NUMBER] Equity Cures during the term of the Loan Agreement, of a maximum of [NUMBER] permitted, and [NUMBER] in consecutive Testing Periods, of a maximum of [NUMBER] permitted. [No Equity Cure was exercised for the immediately preceding Testing Period.]

7. Use of proceeds. [Section °Ú§±Õ requires that $°Úâ—® of the Cure Amount be applied to prepay the Obligations; Borrower will make that prepayment on [DATE] without premium as Section °Ú§±Õ provides.] [Section °Ú§±Õ does not require application of the Cure Amount to the Obligations.] The remaining proceeds will be used for working capital and general corporate purposes in compliance with the Loan Agreement.

8. Effect. Upon the effectiveness of this Equity Cure under Section °Ú§±Õ, the Default or Event of Default arising solely from the failure of the [NAME OF COVENANT] for the Testing Period ended [DATE] is deemed cured, and Borrower requests Lender’s written confirmation of that effect within °Úâ—® Business Days.

9. Reservation. This election is made under and subject to the Loan Agreement. It is not an admission of any other Default or Event of Default and does not waive any right of Borrower. If Lender contends that this election is ineffective for any reason, Borrower requests prompt written notice stating the reason so that Borrower may remedy the deficiency within the cure window.

BORROWER: [BORROWER LEGAL NAME]

By: ______________________________
Name: [NAME]
Title: [TITLE]

Annex A — Investors and amounts
Annex B — Evidence of receipt of cure proceeds (bank confirmation)
Annex C — Recalculation of the cured Covenant
Annex D — Board and stockholder approvals for the equity issuance (if Section °Ú§±Õ requires delivery)

Schedule 14 — Default and Waiver Log

Maintain this log for the life of the facility. Carry every matter forward until it is marked Cured, Waived or Resolved, and never delete a closed entry. Each entry supports the statement in Section 5 and the bring-down in Section 6.

Waiver and Amendment Register

Schedule 15 — Key-Event Notice and Collateral Change Register

This register supports Section 7. It records each event in the categories of Sections 7.1 through 7.7, the notice given, and the collateral or perfection action the event requires. Reporting a change in this register does not complete a filing, Control Agreement, joinder, delivery or consent.

Part A — Event Register

Part B — Collateral and Perfection Actions Required by Events

Schedule 16 — Exception Log for Data Gaps

Record every instance in which a required deliverable, calculation component or notice could not be completed from reliable source data, with the impact on the certificate and the remediation plan. An exception recorded here is disclosed to Lender; it is not a waiver by Lender of the underlying requirement, and the Responsible Officer does not certify the affected item beyond what this Schedule states.

Common exceptions and their standard treatment:

PART III — PRACTITIONER NOTES (NOT PART OF THE CERTIFICATE)

12 Practitioner Drafting Notes

12.1 How Lenders Read Trend, Not Just Pass or Fail

A venture lender underwrites the probability that the company will raise its next equity round before cash runs out. The compliance certificate is the lender’s principal instrument for updating that probability between board meetings. The Result column answers a binary question for one date; the Cushion and Trend columns answer the question the lender actually has, which is whether the probability is moving in the right direction. Three consecutive passes with a narrowing Cushion will be read as a deteriorating credit, and a single fail with a widening Cushion in the following period and a funded equity round will be read as a recovering one. Practical consequences: present Trend for every Covenant on every certificate (Schedules 2 through 8, Part E); explain each move in the Cushion in one or two factual sentences; show the forward test (Schedule 12) so the lender does not build its own from the board deck; and treat a declining Trend as the moment to prepare the mitigation memo, not the moment the test fails. Lenders also read the baskets the same way: a basket at 85 percent utilization signals a consent request coming, and a lender told in advance will usually treat it as routine.

12.2 Dashboard Metrics and Defined Terms Are Different Numbers

Every operating company maintains dashboard metrics (ARR, cash, burn, runway, net revenue retention) that are defined by the company’s revenue-operations and finance teams for management purposes. The Loan Agreement defines terms with similar names for credit purposes, and the definitions are narrower. Dashboard ARR typically includes signed-but-not-yet-live contracts, pilots expected to convert, usage run-rates and verbal renewals; covenant ARR excludes all of them and may further exclude contracts terminable on short notice and customers more than 90 days past due. Dashboard cash includes every account; Qualified Cash excludes accounts without a Control Agreement, restricted balances, payroll accounts and often foreign cash. Dashboard burn is often net of financing inflows; covenant Burn adds financing back. The two sets of numbers must be maintained side by side with a written bridge (Schedule 11), and the company should state in board materials which number is which. Three rules follow: (i) never certify a dashboard number as a defined term; (ii) when a dashboard metric is presented to Lender voluntarily (in a board deck, for example), label it so that it is not mistaken for a covenant figure; and (iii) when negotiating a Loan Agreement, have the finance team compute each proposed covenant definition from the company’s actual systems before signing, so that the covenant tests a number the company can produce.

12.3 Why Early Disclosure of a Projected Breach Is Usually Better Than a Surprise

A projected breach disclosed two Testing Periods early, with a cause, a plan and a proposed path, is an exercise of management control; the same breach discovered by the lender from a late certificate is a reporting failure layered on a covenant failure. Early disclosure gives the relationship officer time to manage the credit internally before it reaches a watch list, gives the credit committee a request rather than a default to approve, and preserves the company’s options, because an Equity Cure requires investors to be ready to fund within a short window and an amendment requires lender process time. Early disclosure also tends to lower the price: waiver and amendment fees, margin increases and added reporting are negotiated more aggressively against a borrower in default than against one presenting a plan. The counterweights are real and should be managed rather than used as reasons for silence. First, labeling: the disclosure is a projection and a planning conclusion, not an admission of Default, and the notice should say so (Schedule 12, Part E, item 1). Second, process: the board, not the finance team alone, should authorize any approach to Lender about a projected breach, because the approach may affect financing strategy and because directors need to be on record. Third, consistency: the projection delivered to Lender must be the projection presented to the board; a more optimistic version for Lender is a credibility problem that outlasts the covenant issue. Fourth, confidentiality: deliver the notice under the Loan Agreement’s confidentiality provisions and confirm the lender’s disclosure obligations to participants. Situations in which counsel may advise against volunteering a projection are narrow (for example, where the Loan Agreement treats a projected inability to comply as itself a Default, or where a sale process is under way), and they should be identified by counsel in advance rather than assumed.

12.4 What Not to Certify

A compliance certificate is a factual report by an officer; it is not a legal opinion, a solvency opinion or a guarantee. The following items should not be certified, and lender forms that ask for them should be revised:

A Responsible Officer who is asked to sign a certification outside this framework should ask counsel to negotiate the form; a certificate that is signed with a mental reservation is worse than a certificate that is negotiated.

13 The Board’s Role in Covenant Compliance

13.1 The Certificate as a Board-Reporting Item

The compliance certificate, the Covenant summary (Section 4) and the forward-looking test (Schedule 12) should be a standing agenda item for the board or its finance or audit committee at each regular meeting, and the committee’s review should be minuted. The reasons are practical and fiduciary. Practically, the Board Plan is a credit document once delivered to Lender, the board approves the equity issuances that fund an Equity Cure, the board authorizes any waiver or amendment request, and directors are the people who will decide whether to open a financing process when the forward test turns Amber. As a matter of fiduciary oversight, a venture-debt facility is typically the company’s largest liability, a covenant breach can accelerate it, and directors should be able to show that they monitored it. Several Loan Agreements also require that board materials be delivered to Lender; the certificate and its Schedules should be consistent with those materials.

13.2 Recommended Board Protocol

13.3 Investor Directors and Information

Investor directors often receive the certificate through the board package; some investors also receive it under information rights in the investors’ rights agreement. The company should deliver one consistent certificate to all recipients, should confirm that investor confidentiality obligations cover lender-related information, and should be aware that an investor who has committed to fund an Equity Cure may be a party whose consent the Loan Agreement requires for the related issuance. Where a director is also a lender affiliate (for example, a bank-affiliated fund), the board should document the director’s recusal from deliberations about waiver or amendment strategy.

Website Posting README — Not Part of the Agreement

What this form is for

This form is a founder-oriented compliance certificate and covenant-testing package for a venture-debt facility. It provides the certificate body (testing period, reporting package, financial-statement certification, covenant summary, Default statement, bring-down, key-event notices, officer standard and signature), eight covenant computation schedules in a uniform definition-formula-components-result-trend format, a reporting calendar, a negative-covenant basket tracker, a GAAP-to-covenant reconciliation, a fully developed forward-looking test with an early-warning and escalation protocol, an equity cure election form, a default and waiver log, a key-event and collateral change register, and an exception log for data gaps. It closes with practitioner notes on how lenders read trend, the difference between dashboard metrics and defined terms, early disclosure of projected breaches, what an officer should not certify, and the board’s role. It is designed to be used with the companion loan and security agreement, perfection certificate, borrowing request and closing checklist forms in this series.

Completion checklist

• Build the defined-term map (Section 1.2) from the executed Loan Agreement before completing any Schedule; quote the ARR and Qualified Cash definitions verbatim.
• Conform the Testing Period, due date, delivery method and temporal standard for the Default statement to the exact words of the Loan Agreement.
• Delete every Covenant, deliverable, notice category and Schedule the Loan Agreement does not contain; do not import unused tests from this master.
• Reproduce each Covenant from source data on Schedules 2 through 8, citing the clause for every adjustment and completing the Trend table.
• Reconcile dashboard metrics to covenant terms on Schedule 11 and confirm the board and Lender receive the same numbers.
• Complete the basket tracker (Schedule 10) from transaction records, not memory, and flag any basket above 80 percent utilization.
• Run the forward-looking test (Schedule 12) under the Board Plan and downside cases; set the status; follow the escalation protocol if Amber or Red.
• Record Defaults, waivers, notices and data gaps on Schedules 14 through 16 precisely; disclosure is not a waiver, and an estimate is disclosed with its range.
• Have a reviewer independent of the preparer sign off, have counsel review Sections 5, 6, 7 and 10, and present the certificate and Schedule 12 to the board or its committee.
• Preserve the signed certificate, Schedules, workpapers, source reports, defined-term map, reviewer sign-off and delivery receipt.

AI completion prompt

Three pass review

Pass 1 Completeness. Confirm the Testing Period, every Reporting Package item cross-referenced to the reporting covenant, each applicable Covenant with definition citation, formula, components, actual, required, result, Cushion and Trend, the Default statement in the contractual temporal standard, the bring-down, each key-event notice category, the basket tracker, the GAAP reconciliation, the forward-looking test with status and escalation, the equity cure form, the three logs, officer capacity and knowledge standard, and signature blocks.
Pass 2 Risk. Recompute every Covenant from source data; test whether any dashboard number was used where a defined term applies; recompute basket capacity and usage; test the forward projection against the board deck for consistency; test each Default entry for cure effectiveness and waiver formality; test the Equity Cure against the cure limits and window; identify any certification that is a legal conclusion, a forecast or a matter within Lender’s control; confirm the board presentation date.
Pass 3 Publication. Remove company, lender, investor and customer names, account details, dollar amounts, dates, file numbers, evidence links, counsel names, hidden properties, tracked changes and comments while preserving the blank master structure, bracketed fields and drafting notes.

Attorney review warning

This certificate must be conformed to the executed facility and the company’s actual accounting records, and it should not be signed until finance has reproduced every calculation from source data, an independent reviewer has signed off, and counsel has confirmed the certification standard, the Default statement, the bring-down and the notice obligations against the Loan Agreement. The forward-looking test and early-warning thresholds are planning tools and internal controls; whether, when and how to disclose a projected breach to a lender is a decision for the board with the advice of counsel on the facts of the specific facility.