Bring-Down Certificate Template

BRING-DOWN CERTIFICATE TEMPLATE

Universal — General United States Practice

PART I: OVERVIEW AND PURPOSE

1.1 What Is a Bring-Down Certificate?

A bring-down certificate is a closing deliverable in which an authorized officer of a party to a transaction certifies that certain representations, warranties, and covenants made in the underlying agreement remain true and have been performed as of the closing date. The certificate "brings down" the truth of those statements from the date the agreement was signed to the date of closing.

1.2 When Is a Bring-Down Certificate Required?

Bring-down certificates are commonly required in the following transactions:

☐ Mergers and acquisitions (stock purchases, asset purchases, mergers)
☐ Equity and debt financing closings
☐ Recapitalizations and restructurings
☐ Joint venture formations
☐ PIPE (private investment in public equity) transactions
☐ Real estate acquisitions involving entity sellers
☐ Any transaction where the purchase agreement or credit agreement includes a closing condition requiring an officer's certificate

1.3 Legal Effect of a Bring-Down Certificate

A bring-down certificate serves several key legal functions:

• Condition to Closing. The delivery of the certificate satisfies a condition precedent to the other party's obligation to close. If the certificate cannot be truthfully delivered, the other party may refuse to close or may terminate the agreement.
• Post-Closing Indemnification Anchor. If the representations certified as true turn out to be false, the certificate may support indemnification claims or breach-of-contract actions after closing.
• Reliance Basis. The certificate provides a documented basis for the receiving party's reliance on the accuracy of the representations and the performance of covenants.
• Officer Personal Liability Considerations. Although the officer signs in a representative capacity ("on behalf of the Company and not individually"), knowingly false certifications may expose the officer to personal liability for fraud.

1.4 Key Components of a Bring-Down Package

A full bring-down closing package typically includes:

PART II: OFFICER'S CERTIFICATE

[DRAFTER'S NOTE: Select the applicable bring-down standard from the underlying agreement. The three most common standards are: (1) true and correct in all respects; (2) true and correct in all material respects; and (3) true and correct except where failure would not reasonably be expected to have a Material Adverse Effect. See Part VI for detailed guidance on qualification standards.]

OFFICER'S CERTIFICATE

Pursuant to Section [____] of the [____] Agreement

This Officer's Certificate (this "Certificate") is delivered pursuant to Section [________________________________] of that certain [Stock Purchase Agreement / Asset Purchase Agreement / Agreement and Plan of Merger / Credit Agreement] dated as of [__/__/____] (the "Agreement"), by and among:

Buyer/Lender: [________________________________] ("Buyer")

Seller/Borrower: [________________________________] (the "Company")

Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement.

The undersigned, [________________________________], the duly elected and acting [Title — e.g., Chief Executive Officer / President / Chief Financial Officer] of the Company, hereby certifies, on behalf of the Company and not in any individual capacity, as follows:

Section 1. Representations and Warranties

[SELECT ONE OF THE FOLLOWING THREE OPTIONS:]

Option A — Full Bring-Down (True in All Respects):

Each of the representations and warranties of the Company contained in Article [____] of the Agreement is true and correct in all respects as of the date hereof with the same force and effect as though such representations and warranties had been made on and as of the date hereof, except to the extent that any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty was true and correct in all respects as of such earlier date.

Option B — Materiality-Qualified Bring-Down:

Each of the representations and warranties of the Company contained in Article [____] of the Agreement is true and correct in all material respects as of the date hereof with the same force and effect as though such representations and warranties had been made on and as of the date hereof, except to the extent that any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty was true and correct in all material respects as of such earlier date.

Option C — MAE-Qualified Bring-Down:

Each of the representations and warranties of the Company contained in Article [____] of the Agreement (disregarding all qualifications and exceptions contained therein relating to materiality or Material Adverse Effect) is true and correct in all respects as of the date hereof with the same force and effect as though such representations and warranties had been made on and as of the date hereof, except (i) to the extent that any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty was true and correct as of such earlier date, and (ii) where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 2. Performance of Covenants

The Company has performed and complied in all material respects with all covenants and agreements required by the Agreement to be performed or complied with by the Company on or before the Closing Date.

Section 3. No Material Adverse Change

Since the date of the Agreement, no event, change, occurrence, circumstance, or condition has occurred that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.

[DRAFTER'S NOTE: Include this section only if the Agreement requires certification of the absence of a Material Adverse Effect as a separate closing condition. If MAE is already subsumed in the rep bring-down, this section may be redundant.]

Section 4. No Legal Impediment

No temporary restraining order, preliminary or permanent injunction, or other order issued by any court of competent jurisdiction, and no statute, rule, regulation, or executive order promulgated or enacted by any governmental authority, is in effect that prevents or prohibits the consummation of the transactions contemplated by the Agreement.

Section 5. No Proceedings

No action, suit, investigation, or proceeding is pending or, to the knowledge of the Company, threatened before any governmental authority that seeks to restrain, enjoin, or otherwise prevent the consummation of the transactions contemplated by the Agreement or that would reasonably be expected to result in a Material Adverse Effect.

Section 6. Schedules and Exceptions

[DRAFTER'S NOTE: If any representations must be qualified or updated at closing, attach an updated disclosure schedule here.]

☐ No exceptions to the foregoing certifications exist.

☐ The following exceptions to the foregoing certifications are set forth on Schedule A attached hereto:

[________________________________]

Section 7. Officer Authority

The undersigned is a duly elected and acting officer of the Company and has been duly authorized by the Board of Directors of the Company to execute and deliver this Certificate on behalf of the Company.

IN WITNESS WHEREOF, the undersigned has duly executed this Certificate as of [__/__/____].

[________________________________]
(Name of Company)

By: ____________________________________
Name: [________________________________]
Title: [________________________________]

PART III: SECRETARY'S CERTIFICATE

SECRETARY'S CERTIFICATE

The undersigned, [________________________________], the duly elected and acting Secretary (or Assistant Secretary) of [________________________________] (the "Company"), a [corporation / limited liability company] organized under the laws of [________________________________], hereby certifies, on behalf of the Company and not in any individual capacity, as follows:

Section 1. Incumbency

The following persons are the duly elected or appointed officers of the Company holding the offices set forth opposite their names below, and the signatures set forth opposite their names below are their genuine signatures:

Section 2. Organizational Documents

(a) Attached hereto as Exhibit A is a true, correct, and complete copy of the [Certificate of Incorporation / Articles of Incorporation / Certificate of Formation] of the Company, as currently in effect, including all amendments thereto.

(b) Attached hereto as Exhibit B is a true, correct, and complete copy of the [Bylaws / Operating Agreement] of the Company, as currently in effect, including all amendments thereto.

Section 3. Resolutions

Attached hereto as Exhibit C is a true, correct, and complete copy of the resolutions duly adopted by the [Board of Directors / Members / Managers] of the Company authorizing the execution, delivery, and performance of the Agreement and the consummation of the transactions contemplated thereby. Such resolutions have not been amended, modified, supplemented, revoked, or rescinded and remain in full force and effect as of the date hereof.

Section 4. Good Standing

Attached hereto as Exhibit D is a certificate of [good standing / existence / status / compliance], dated not earlier than [____] days before the Closing Date, issued by the [Secretary of State / Department of State / other applicable filing office] of the State of [________________________________], confirming that the Company is in good standing (or equivalent status) under the laws of such state.

[DRAFTER'S NOTE: Some agreements require the good standing certificate to be dated within 5 to 10 business days of closing. Verify the required dating window in the underlying agreement.]

Section 5. Qualification

The Company is qualified to do business as a foreign [corporation / limited liability company] in good standing in the following jurisdictions:

Section 6. No Dissolution or Winding Up

No proceedings for the dissolution, winding up, liquidation, or reorganization of the Company have been commenced or are contemplated, and no assignment for the benefit of creditors has been made.

Section 7. Secretary's Authority

The undersigned is the duly elected and acting Secretary (or Assistant Secretary) of the Company and has been duly authorized by the Board of Directors of the Company to execute and deliver this Certificate.

IN WITNESS WHEREOF, the undersigned has duly executed this Certificate as of [__/__/____].

By: ____________________________________
Name: [________________________________]
Title: Secretary

[COUNTER-CERTIFICATION: The below officer confirms the identity and authority of the Secretary.]

I, [________________________________], [Title] of the Company, hereby confirm that [________________________________] is the duly elected and acting Secretary of the Company and that the signature above is his/her genuine signature.

By: ____________________________________
Name: [________________________________]
Title: [________________________________]

PART IV: GOOD STANDING CERTIFICATE PROCEDURES

4.1 Overview

A good standing certificate (also called a certificate of existence, certificate of status, or certificate of compliance, depending on the state) is an official document issued by the state filing authority confirming that a business entity is properly organized, has met all filing requirements, and is authorized to transact business in the state.

4.2 Terminology by State

4.3 General Procedures for Obtaining Good Standing Certificates

Step 1: Confirm Entity Is in Good Standing
☐ Verify all annual reports have been filed
☐ Verify all filing fees and franchise taxes have been paid
☐ Verify registered agent information is current
☐ Verify no administrative dissolution or revocation is pending

Step 2: Request the Certificate
☐ Determine whether online ordering is available
☐ Submit application with required information (entity name, file number)
☐ Pay applicable fee
☐ Specify expedited processing if closing deadline is imminent

Step 3: Verify Dating Requirement
☐ Review the Agreement for the maximum age allowed for the certificate (commonly 5, 10, or 30 days before closing)
☐ Time the request so the certificate will be dated within the required window

4.4 General Fee and Processing Summary

[DRAFTER'S NOTE: Fees and processing times are subject to change. Verify current fees with the applicable state filing authority before ordering.]

PART V: COMPLIANCE CERTIFICATE

COMPLIANCE CERTIFICATE

The undersigned, [________________________________], the duly elected and acting [Title] of [________________________________] (the "Company"), hereby certifies, on behalf of the Company and not in any individual capacity, as follows:

Section 1. Tax Compliance

☐ The Company has timely filed, or caused to be timely filed, all federal, state, and local tax returns and reports required to be filed by the Company.

☐ The Company has paid, or caused to be paid, all taxes due and payable by the Company (whether or not shown on a filed tax return), except for taxes being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP.

☐ There are no outstanding federal, state, or local tax liens against any assets of the Company.

☐ No audit, examination, or investigation by any taxing authority is pending or, to the knowledge of the Company, threatened with respect to the Company.

[DRAFTER'S NOTE: Attach a tax clearance certificate from the applicable state taxing authority if required by the Agreement. Requirements vary by state. See state-specific templates for detailed guidance.]

Section 2. Regulatory Compliance

☐ The Company holds all material licenses, permits, authorizations, consents, and approvals of all governmental authorities necessary for the lawful conduct of its business and the ownership of its properties.

☐ All such licenses, permits, authorizations, consents, and approvals are valid, in full force and effect, and not subject to any pending or, to the knowledge of the Company, threatened revocation, suspension, cancellation, or modification.

☐ The Company is in compliance in all material respects with all applicable laws, statutes, ordinances, rules, regulations, and orders of any governmental authority.

Section 3. Employee and Benefits Compliance

☐ The Company is in compliance in all material respects with all applicable labor and employment laws.

☐ All employee benefit plans maintained by the Company are in compliance in all material respects with ERISA, the Internal Revenue Code, and all other applicable laws.

Section 4. Environmental Compliance

☐ The Company is in compliance in all material respects with all applicable environmental laws, regulations, and permits.

☐ There are no pending or, to the knowledge of the Company, threatened environmental claims, actions, or investigations with respect to the Company or its properties.

IN WITNESS WHEREOF, the undersigned has duly executed this Certificate as of [__/__/____].

[________________________________]
(Name of Company)

By: ____________________________________
Name: [________________________________]
Title: [________________________________]

PART VI: BRING-DOWN QUALIFICATION STANDARDS

6.1 Overview of Bring-Down Standards

The bring-down standard determines how true the representations and warranties must be at closing in order for the closing condition to be satisfied. This is one of the most heavily negotiated provisions in any acquisition agreement.

6.2 The Three Common Standards

Standard A: "True and Correct in All Respects"

• Buyer-favorable. Even a minor or immaterial inaccuracy in any representation will cause the closing condition to fail.
• Practical effect: Rarely used for all representations. May be used for "fundamental representations" (organization, authority, capitalization, no brokers).
• Risk to seller: High. The buyer may refuse to close over trivial inaccuracies.

Standard B: "True and Correct in All Material Respects"

• Balanced. Representations must be substantially accurate, but immaterial inaccuracies do not prevent closing.
• Practical effect: Most common standard for the general body of representations.
• Key issue: What constitutes "material" is inherently ambiguous and fact-specific.

Standard C: "True and Correct Except as Would Not Have a Material Adverse Effect"

• Seller-favorable. Only inaccuracies that rise to the level of a Material Adverse Effect prevent closing.
• Practical effect: Sets a very high threshold. Courts have historically been reluctant to find a Material Adverse Effect (see Akorn, Inc. v. Fresenius Kabi AG, Del. Ch. 2018, for the first Delaware Chancery Court finding of an MAE).
• Key issue: The MAE definition and its carve-outs are critical.

6.3 Double-Materiality Scrub

When the underlying representations already contain materiality qualifiers, the bring-down standard creates a "double-materiality" issue. Consider whether the bring-down provision should:

☐ Read through materiality qualifiers (disregard them for purposes of the bring-down) — more buyer-favorable
☐ Preserve materiality qualifiers (apply them cumulatively) — more seller-favorable

6.4 Common MAE Carve-Outs

The following events are typically carved out from the MAE definition (i.e., they cannot constitute a Material Adverse Effect):

☐ Changes in general economic or political conditions
☐ Changes affecting the industry in which the Company operates generally
☐ Changes in applicable law or GAAP
☐ Changes resulting from the announcement or pendency of the transactions
☐ Changes resulting from actions taken at the request of or with the consent of the Buyer
☐ Acts of war, terrorism, natural disasters, or pandemics
☐ Changes in the trading price or volume of the Company's securities (but underlying cause may still constitute MAE)
☐ Failure to meet projections or forecasts (but underlying cause may still constitute MAE)

6.5 Tiered Bring-Down Structure

Many modern agreements use a tiered bring-down structure:

PART VII: PRACTICE NOTES

7.1 Timing Considerations

• Pre-closing diligence. Begin preparing the bring-down package at least 5 to 10 business days before the anticipated closing date. Identify any representations that may require updating or scheduling exceptions.
• Good standing certificate lead time. Order good standing certificates with sufficient lead time to meet the dating window in the Agreement.
• Simultaneous sign-and-close. If the transaction is a simultaneous sign-and-close, the bring-down certificate is typically delivered at signing and need only speak as of that single date.
• Deferred closings. If there is a gap between signing and closing, the bring-down certificate must speak as of the closing date, requiring a fresh review of all representations.

7.2 Common Issues and Pitfalls

• Unauthorized signatory. Ensure the officer signing the certificate has been properly authorized by the board of directors. Attach authorizing resolutions to the secretary's certificate.
• Stale good standing certificates. Verify the dating requirement in the Agreement. A certificate that is too old may not satisfy the closing condition.
• Undisclosed exceptions. If any representation is no longer fully accurate, the certifying officer should not sign without disclosing exceptions. Deliver an updated disclosure schedule if necessary.
• Knowledge qualifiers. Some certifications are limited to the officer's knowledge. Ensure the knowledge standard (actual knowledge vs. constructive knowledge with reasonable inquiry) matches the Agreement.
• Multiple entities. If the transaction involves subsidiaries, each subsidiary may need its own set of bring-down certificates. Coordinate across entities to ensure all certificates are consistent and timely.
• Foreign qualifications. If the Agreement requires good standing certificates from every jurisdiction where the Company is qualified to do business as a foreign entity, begin gathering those certificates early — some jurisdictions have long processing times.

7.3 Checklist for Bring-Down Certificate Preparation

☐ Obtain a copy of the fully executed Agreement and all amendments
☐ Identify the specific bring-down standard (all respects / material respects / MAE)
☐ Identify which representations are subject to bring-down (all reps or only specified reps)
☐ Review all representations against current facts and circumstances
☐ Identify any representations that are no longer fully accurate
☐ Prepare updated disclosure schedules if needed
☐ Confirm officer authorization via board resolutions
☐ Prepare secretary's certificate with incumbency, resolutions, charter, and bylaws
☐ Order good standing certificates in the state of formation and each foreign qualification state
☐ Obtain tax clearance certificates if required by the Agreement
☐ Circulate draft certificates to opposing counsel for review
☐ Obtain final approval from the certifying officer
☐ Execute and deliver certificates at closing

7.4 Post-Closing Retention

Retain executed originals or certified copies of all bring-down certificates as part of the permanent closing binder. These documents may be relevant to:

• Post-closing purchase price adjustments
• Indemnification claims
• Earn-out disputes
• Insurance coverage determinations
• Future due diligence in subsequent transactions

SOURCES AND REFERENCES

• Model Business Corporation Act (MBCA), as revised by the ABA Section of Business Law — Section 1.28 (Certificate of Existence), Section 8.40 (Officers)
• ABA Model Stock Purchase Agreement, Second Edition (2010), American Bar Association
• ABA Model Asset Purchase Agreement, American Bar Association (2001)
• Akorn, Inc. v. Fresenius Kabi AG, C.A. No. 2018-0300 (Del. Ch. Oct. 1, 2018) — leading case on MAE standard
• Practical Law, "Closing Conditions: Bring-Down of Representations and Warranties" (Thomson Reuters)
• State-specific statutory references as cited in the jurisdictional templates for AK, AL, AZ, CA, FL, NY, and TX

This template is provided by ezel.ai for informational purposes only and does not constitute legal advice. Each transaction has unique facts and circumstances. Consult a qualified attorney licensed in your jurisdiction before using this template.