BRING-DOWN CERTIFICATE — CALIFORNIA

State of California — Corporate Closing Documents

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 representations, warranties, and covenants made in the underlying agreement remain true and have been performed as of the closing date.

1.2 California Corporate Law Framework

California corporations are governed by the California Corporations Code, Division 1 (General Corporation Law). Key provisions relevant to bring-down certificates include:

• Cal. Corp. Code 312 — Duties and Liabilities of Officers. An officer must discharge duties in good faith, in a manner the officer believes to be in the best interests of the corporation and its shareholders, and with the care an ordinarily prudent person in a like position would use under similar circumstances.
• Cal. Corp. Code 2105 — Foreign Corporation Qualification. A foreign corporation must obtain qualification from the Secretary of State before transacting intrastate business in California, including a certificate of good standing from its state of incorporation.
• Cal. Corp. Code 1103-1113 — Merger provisions for domestic corporations.
• Cal. Corp. Code 1505 — Agent for service of process requirements, including good standing prerequisites.
• Cal. Rev. & Tax. Code 23301 et seq. — Franchise Tax Board powers regarding suspension and revival of corporate powers for failure to pay franchise taxes.

1.3 California-Specific Closing Considerations

California transactions have unique requirements that distinguish them from other states:

• Franchise Tax Board (FTB) Clearance. In certain transactions (particularly mergers where the surviving entity is a foreign corporation and dissolutions), the California Franchise Tax Board must issue a tax clearance certificate before the Secretary of State will file the transaction documents.
• Certificate of Status. California's equivalent of a good standing certificate is called a "Certificate of Status," issued by the Secretary of State.
• Suspended Corporations. A corporation suspended by the FTB for failure to pay franchise taxes loses the right to exercise corporate powers, including the power to sue, defend lawsuits, or engage in transactions. Verify the Company is not suspended before closing.

1.4 When Is a Bring-Down Certificate Required?

☐ Mergers and acquisitions involving California corporations or LLCs
☐ Equity and debt financing closings
☐ Real estate transactions involving California entity sellers
☐ Joint venture formations
☐ PIPE transactions
☐ Any transaction where the Agreement requires an officer's certificate as a closing condition

1.5 Legal Effect

• Condition to Closing. Satisfies a condition precedent to the other party's obligation to close.
• Post-Closing Indemnification. Supports indemnification claims if certified statements prove false.
• Officer Liability. Under Cal. Corp. Code 312, an officer who certifies knowingly false statements may face liability for breach of fiduciary duty.
• FTB Suspension Risk. If the Company is suspended by the FTB at the time of closing, all corporate acts taken during the suspension period may be voidable. Confirm active status before delivering the certificate.

PART II: OFFICER'S CERTIFICATE

OFFICER'S CERTIFICATE

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

STATE OF CALIFORNIA

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: [________________________________], a California [corporation / limited liability company] (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] of the Company, hereby certifies, on behalf of the Company and not in any individual capacity, as follows:

Section 1. Organization and Good Standing

The Company is a [corporation duly organized / limited liability company duly formed] and validly existing under the laws of the State of California pursuant to the California Corporations Code. The Company is active and in good standing with the California Secretary of State. The Company has not been suspended or forfeited by the California Franchise Tax Board under Cal. Rev. & Tax. Code 23301 et seq. or by the California Secretary of State under Cal. Corp. Code 2205.

Section 2. Representations and Warranties

[SELECT ONE:]

Option A — Full Bring-Down:

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 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 3. 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 4. 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.

Section 5. No Legal Impediment

No temporary restraining order, preliminary or permanent injunction, or other order issued by any court of competent jurisdiction (including any California Superior Court or the United States District Court for any district of California), 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 6. No Proceedings

No action, suit, investigation, or proceeding is pending or, to the knowledge of the Company, threatened before any governmental authority (including the California Franchise Tax Board, the California Attorney General, or the California Department of Tax and Fee Administration) that seeks to restrain, enjoin, or otherwise prevent the consummation of the transactions contemplated by the Agreement.

Section 7. FTB Status Confirmation

The Company has not received any notice of suspension or pending suspension from the California Franchise Tax Board. The Company has filed all required California franchise tax returns and has paid all franchise taxes due and payable. The Company's corporate powers have not been suspended or forfeited at any time during the past [____] years.

[DRAFTER'S NOTE: This section addresses a California-specific concern. FTB suspension renders corporate acts voidable. Buyers should confirm active FTB status independently via the FTB entity status lookup tool at https://www.ftb.ca.gov/help/business/entity-status-letter.asp.]

Section 8. Exceptions to Certifications

☐ No exceptions to the foregoing certifications exist.

☐ The following exceptions are set forth on Schedule A attached hereto:

[________________________________]

Section 9. Officer Authority

The undersigned is a duly elected and acting officer of the Company, holding the office indicated below, and has been duly authorized by the [Board of Directors / Members / Managers] 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 California [corporation / limited liability company], 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 [Articles of Incorporation / Articles of Organization] of the Company as filed with the California Secretary of State, 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. Certificate of Status

Attached hereto as Exhibit D is a Certificate of Status issued by the California Secretary of State, dated not earlier than [____] days before the Closing Date, confirming the active status of the Company.

Section 5. Agent for Service of Process

The Company's agent for service of process, as designated with the California Secretary of State, is:

Name: [________________________________]
Address: [________________________________]

The agent for service of process information on file with the Secretary of State is current and accurate.

Section 6. Foreign Qualification

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

Section 7. No Dissolution

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

Section 8. Secretary's Authority

The undersigned is the duly elected and acting Secretary of the Company and has been duly authorized to execute and deliver this Certificate.

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

By: ____________________________________
Name: [________________________________]
Title: Secretary

[COUNTER-CERTIFICATION:]

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 — CALIFORNIA

4.1 Terminology

California uses the term "Certificate of Status" for its official entity status certificate, issued by the Secretary of State. This certificate confirms whether an entity is active, suspended, dissolved, cancelled, or otherwise.

4.2 Issuing Authority — Certificate of Status

California Secretary of State
Business Programs Division
1500 11th Street
Sacramento, CA 95814
Phone: (916) 657-5448
Website: https://www.sos.ca.gov/business-programs
Online Portal: https://bizfileOnline.sos.ca.gov

4.3 How to Obtain a Certificate of Status

Online (bizfileOnline):
☐ Visit https://bizfileOnline.sos.ca.gov
☐ Search for entity by name or entity number
☐ Select "Certificate of Status" from available services
☐ Pay the applicable fee
☐ Certificate is available within minutes as a downloadable PDF

By Mail:
☐ Download the Business Entities Records Request form (Form BE-Records Request) from the SOS website
☐ Complete the form and specify "Certificate of Status"
☐ Mail with payment to: Secretary of State, Business Programs Division, P.O. Box 944260, Sacramento, CA 94244-2600
☐ Processing: 1 to 3 days (standard); same-day or next-day (expedited)

4.4 Fees — Certificate of Status

4.5 FTB Tax Clearance Certificate

When Required

A tax clearance certificate from the California Franchise Tax Board (FTB) is required in certain transactions:

☐ Merger where the surviving entity is a foreign corporation (the non-surviving domestic corporation must obtain tax clearance before the Secretary of State will file the merger documents)
☐ Dissolution of a California corporation
☐ Surrender of right to transact business by a foreign corporation

How to Obtain

☐ File FTB Form 3555 (Request for Tax Clearance Certificate — Corporations) or FTB Form 3556 (Request for Tax Clearance Certificate — LLCs) with the California Franchise Tax Board
☐ Ensure all California franchise tax returns are filed and all taxes paid
☐ Deposit estimated tax liability with the FTB if required
☐ FTB will issue the tax clearance certificate and forward a copy to the Secretary of State

Issuing Authority

California Franchise Tax Board
P.O. Box 942857
Sacramento, CA 94257-0540
Phone: (800) 852-5711
Website: https://www.ftb.ca.gov

Entity Status Letter (Alternative)

For transactions that do not require a formal tax clearance but where the buyer wants verification of FTB status:

☐ Request an Entity Status Letter from the FTB at https://www.ftb.ca.gov/help/business/entity-status-letter.asp
☐ This letter confirms whether the entity is active, suspended, or forfeited
☐ Available online at no charge

4.6 What the Certificate of Status Confirms

The California Certificate of Status certifies:
☐ The entity's current status (active, suspended, dissolved, cancelled, etc.)
☐ The entity name on file with the Secretary of State
☐ The entity number
☐ The date of filing of the original formation document

[DRAFTER'S NOTE: The California Certificate of Status does NOT confirm tax compliance with the FTB. A separate Entity Status Letter or tax clearance certificate from the FTB should be obtained to confirm tax good standing.]

4.7 Practice Tips for California

• Two-Agency System. California has a split system: the Secretary of State handles entity formation and filings, while the Franchise Tax Board handles franchise tax compliance and suspension/revival. A corporation can be "active" with the SOS but "suspended" by the FTB, or vice versa. Check both agencies.
• FTB Suspension Consequences. Under Cal. Rev. & Tax. Code 23301, a corporation suspended for failure to pay franchise taxes loses the right to exercise any corporate power, privilege, or right. Acts taken during suspension may be voidable.
• Revival After Suspension. A suspended corporation can be revived by filing delinquent returns and paying all taxes, penalties, and interest due (Cal. Rev. & Tax. Code 23305). Upon revival, the corporation's rights and privileges are restored retroactively.
• Statement of Information. California corporations must file a Statement of Information (Form SI-550) with the Secretary of State. Verify the Company's Statement of Information is current.
• California Minimum Franchise Tax. California imposes a minimum franchise tax of $800 per year on most corporations and LLCs. Confirm this is current.

PART V: COMPLIANCE CERTIFICATE — CALIFORNIA

COMPLIANCE CERTIFICATE

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

Section 1. California Franchise Tax Compliance

☐ The Company has timely filed all California franchise tax returns required to be filed with the Franchise Tax Board.

☐ The Company has paid all California franchise taxes due and payable, including the minimum franchise tax, except for taxes being contested in good faith for which adequate reserves have been established.

☐ The Company has not been suspended or forfeited by the Franchise Tax Board under Cal. Rev. & Tax. Code 23301 or 23301.5 at any time during the past [____] years.

☐ There are no outstanding California state tax liens against the Company or its assets.

☐ No audit, examination, or investigation by the Franchise Tax Board is pending or, to the knowledge of the Company, threatened.

Section 2. California Sales and Use Tax Compliance

☐ The Company has obtained all required seller's permits from the California Department of Tax and Fee Administration (CDTFA).

☐ The Company has timely filed all California sales and use tax returns and paid all obligations due.

[DRAFTER'S NOTE: If the transaction is a bulk sale or transfer of substantially all assets, consider whether a CDTFA bulk sale clearance (Tax Clearance Certificate) is required under Cal. Rev. & Tax. Code 6811 et seq.]

Section 3. Federal Tax Compliance

☐ The Company has timely filed all federal tax returns and reports required to be filed.

☐ The Company has paid all federal taxes due and payable, except for taxes being contested in good faith for which adequate reserves have been established.

☐ There are no outstanding federal tax liens against the Company or its assets.

Section 4. Regulatory Compliance

☐ The Company holds all material licenses, permits, and authorizations necessary for the lawful conduct of its business in California.

☐ All such licenses, permits, and authorizations are valid, in full force and effect, and not subject to any pending revocation, suspension, or modification.

☐ The Company is in compliance in all material respects with all applicable California statutes, regulations, and orders.

Section 5. Employment Compliance

☐ The Company is in compliance in all material respects with California labor and employment laws, including the California Labor Code, the California Fair Employment and Housing Act (Cal. Gov. Code 12900 et seq.), and all applicable Wage Orders of the Industrial Welfare Commission.

☐ The Company is in compliance with the California Worker Adjustment and Retraining Notification Act (Cal. Lab. Code 1400 et seq.) as applicable to the transactions.

Section 6. Environmental Compliance

☐ The Company is in compliance in all material respects with all applicable California and federal environmental laws, including the California Environmental Quality Act (CEQA) (Cal. Pub. Res. Code 21000 et seq.) and the California Health and Safety Code provisions regarding hazardous materials.

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

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 The Three Common Standards

Standard A: "True and Correct in All Respects"

• Buyer-favorable. Even minor inaccuracies cause the condition to fail.
• Typically used only for fundamental representations.

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

• Balanced. Most common standard for general representations.

Standard C: "MAE-Qualified"

• Seller-favorable. Only inaccuracies rising to a Material Adverse Effect prevent closing.

6.2 Double-Materiality Scrub

☐ Read through materiality qualifiers (more buyer-favorable)
☐ Preserve materiality qualifiers (more seller-favorable)

6.3 Common MAE Carve-Outs

☐ Changes in general economic or political conditions
☐ Changes affecting the Company's industry generally
☐ Changes in applicable law (including California law) or GAAP
☐ Changes resulting from announcement or pendency of the transactions
☐ Changes resulting from actions taken at Buyer's request or with Buyer's consent
☐ Acts of war, terrorism, natural disasters (including earthquakes and wildfires), or pandemics
☐ Changes in the trading price or volume of the Company's securities
☐ Failure to meet projections or forecasts

6.4 Tiered Bring-Down Structure

PART VII: PRACTICE NOTES — CALIFORNIA-SPECIFIC

7.1 California-Specific Considerations

• Two-Agency Verification. Always verify status with both the Secretary of State and the Franchise Tax Board. A corporation can be active with one agency and suspended by the other.
• FTB Suspension. FTB suspension is a critical issue in California transactions. Under Cal. Rev. & Tax. Code 23301, a suspended corporation cannot exercise corporate powers, and acts taken during suspension may be voidable. Always confirm the Company's FTB status before closing.
• Bulk Sale Tax Clearance. For asset purchases, determine whether a bulk sale clearance from CDTFA is required under Cal. Rev. & Tax. Code 6811 et seq.
• Cal. Corp. Code 1101 Merger Provisions. For mergers involving California corporations, the parties must comply with Cal. Corp. Code 1101 et seq., including shareholder approval requirements and any FTB tax clearance requirements.
• Statement of Information. The Company's Statement of Information (Form SI-550) must be current. This form identifies the Company's officers, directors, and agent for service of process.
• California Minimum Franchise Tax. All California corporations and LLCs are subject to an $800 minimum franchise tax. Confirm this is current.
• WARN Act. California has its own WARN Act (Cal. Lab. Code 1400 et seq.) with broader coverage than the federal WARN Act. Consider WARN Act compliance in transactions involving workforce changes.

7.2 Timing Considerations

• Certificate of Status. Available within minutes online via bizfileOnline ($5 standard; $10 expedited). Mail requests: 1 to 3 days.
• FTB Tax Clearance. Processing time varies; allow several weeks for FTB Form 3555 processing.
• Entity Status Letter. Available online at no charge from the FTB website.
• Pre-Closing Review. Begin preparation at least 10 business days before the anticipated closing date, especially if FTB clearance is required.

7.3 Bring-Down Certificate Preparation Checklist — California

☐ Obtain fully executed Agreement and all amendments
☐ Identify the applicable bring-down standard
☐ Review all representations against current facts
☐ Prepare updated disclosure schedules if needed
☐ Confirm officer authorization via board resolutions
☐ Prepare secretary's certificate with incumbency, resolutions, and organizational documents
☐ Order Certificate of Status from California Secretary of State via bizfileOnline ($5)
☐ Obtain Entity Status Letter from FTB (free) or FTB Tax Clearance Certificate (if required)
☐ Verify Statement of Information (Form SI-550) is current
☐ Confirm California minimum franchise tax is paid
☐ Determine whether bulk sale tax clearance from CDTFA is needed
☐ Obtain foreign qualification good standing certificates for other states
☐ Circulate drafts to opposing counsel
☐ Obtain final approval from certifying officer
☐ Execute and deliver at closing

SOURCES AND REFERENCES

• California Corporations Code — Division 1, General Corporation Law
• Cal. Corp. Code 312 — Duties and Liabilities of Officers
• Cal. Corp. Code 1103-1113 — Mergers
• Cal. Corp. Code 1505 — Agent for Service of Process
• Cal. Corp. Code 2105 — Foreign Corporation Qualification
• Cal. Rev. & Tax. Code 23301 — Franchise Tax Board — Suspension of Corporate Powers
• Cal. Rev. & Tax. Code 23305 — Revival After Suspension
• California Secretary of State — bizfileOnline: https://bizfileOnline.sos.ca.gov
• California Secretary of State — Business Entities Records Request: https://www.sos.ca.gov/business-programs/business-entities/information-requests
• California Franchise Tax Board — Entity Status Letter: https://www.ftb.ca.gov/help/business/entity-status-letter.asp
• FTB Form 3555 — Request for Tax Clearance Certificate (Corporations)

This template is provided by ezel.ai for informational purposes only and does not constitute legal advice. Consult a qualified attorney licensed in California before using this template.