Solvency Certificate (M&A / Leveraged Transaction)

SOLVENCY CERTIFICATE

Date: [__/__/____]
Company: [COMPANY LEGAL NAME]
Transaction: [DESCRIBE — e.g., "Acquisition of the Company by [BUYER] pursuant to that certain Agreement and Plan of Merger dated [__/__/____]"]

CERTIFICATION

I, [NAME], the duly elected and acting Chief Financial Officer (or other authorized financial officer) of [COMPANY LEGAL NAME], a [STATE] [entity type] (the "Company"), solely in my capacity as such officer and not in my individual capacity, DO HEREBY CERTIFY to [ADDRESSEE — e.g., the "Administrative Agent", the "Lenders", the "Buyer", etc.] in connection with the [Transaction] and pursuant to Section [__] of the [Credit Agreement / Merger Agreement / etc.] dated as of [__/__/____] (the "Agreement") as follows:

I. AUTHORITY

I have been designated by the Board of Directors of the Company to deliver this Certificate and am familiar with the business, financial condition, assets, liabilities, and operations of the Company and its subsidiaries on a consolidated basis (together, the "Company Group").

II. BASIS FOR CERTIFICATION

In preparing this Certificate, I have:

☐ Reviewed the Company Group's historical audited financial statements for the fiscal years ended [__/__/____], [__/__/____], and [__/__/____];

☐ Reviewed the Company Group's unaudited consolidated financial statements for the interim period ended [__/__/____];

☐ Reviewed the Company Group's internal projections and financial forecasts for each of the [five (5)] fiscal years following the Closing Date (the "Projections");

☐ Reviewed the final terms of the Transaction, including the consideration, financing arrangements, and any equity contribution;

☐ Consulted with the Company Group's senior management, auditors, and external advisors;

☐ Reviewed the solvency opinion, dated [__/__/____], issued by [INDEPENDENT SOLVENCY OPINION FIRM] (the "Solvency Opinion"), a copy of which is attached as Exhibit A;

☐ Considered the effect of the Transaction and the incurrence of any indebtedness in connection therewith on the Company Group's assets, liabilities, cash flows, and capital.

III. DEFINED TERMS

For purposes of this Certificate:

"Fair Value" means, with respect to any asset or liability, the amount at which such asset or liability could be bought or sold, or incurred or settled, as applicable, between willing, informed parties in an arm's-length transaction, with neither party under compulsion to buy, sell, or transact.

"Present Fair Saleable Value" means the amount that could be obtained from the sale of the Company Group's assets as an ongoing business, within a reasonable period of time not to exceed 12 months, by willing parties not under compulsion.

"Stated Liabilities" means, as of the Closing Date, all liabilities of the Company Group determined in accordance with GAAP as reflected on a pro forma consolidated balance sheet giving effect to the Transaction.

"Contingent Liabilities" means, as of the Closing Date, the estimated amount of liabilities reasonably likely to result from pending or threatened litigation, asserted claims, assessments, guaranties, uninsured risks, and other contingent obligations, computed as the amount that, in light of all the facts and circumstances existing as of the date hereof, represents the amount that can reasonably be expected to become an actual or matured liability.

IV. CERTIFICATIONS

After giving effect to the Transaction and the incurrence of any indebtedness in connection therewith, on a pro forma basis as of the Closing Date:

IV.A — Balance Sheet Test

The Fair Value of the Company Group's assets exceeds its total liabilities (including Stated Liabilities and reasonably estimated Contingent Liabilities).

The Present Fair Saleable Value of the Company Group's assets exceeds the amount that will be required to pay its Stated Liabilities and reasonably estimated Contingent Liabilities as they become absolute and matured.

IV.B — Cash Flow Test

The Company Group does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay such debts or liabilities as they mature in the ordinary course of business.

Based on the Projections and assumptions described therein:

☐ Expected operating cash flows are sufficient to service all debt obligations (including principal, interest, scheduled amortization, and mandatory prepayments)
☐ Adequate liquidity (including available revolver capacity) exists to meet short-term funding requirements
☐ No material adverse change in market conditions or the Company Group's business is currently anticipated

IV.C — Adequate Capital Test

The Company Group is not engaged in, and is not about to engage in, a business or transaction for which its remaining assets would constitute unreasonably small capital.

The Company Group has sufficient capital to conduct its business as contemplated by the Projections, taking into account reasonable fluctuations in operating results, capital expenditure requirements, working capital needs, and industry conditions.

IV.D — No Intent to Hinder, Delay, or Defraud Creditors

The Company is entering into the Transaction in good faith and without any intent to hinder, delay, or defraud its present or future creditors. The consideration being paid or received by the Company in the Transaction constitutes reasonably equivalent value.

V. ASSUMPTIONS AND QUALIFICATIONS

Key Assumptions

The Projections and the conclusions set forth in this Certificate are based on the following material assumptions:

1. The Transaction will be consummated substantially on the terms set forth in the Agreement and related financing documents;

2. No material adverse change will occur in the Company Group's business, customers, or markets not already reflected in the Projections;

3. Credit market conditions will remain such that the Company Group can refinance its indebtedness at scheduled maturities on customary terms;

4. No material adverse judgment, regulatory action, or change in law will materially impair the Company Group's operations; and

5. [Additional deal-specific assumptions].

Limitations

(a) This Certificate speaks only as of the date hereof. Solvency is a forward-looking determination that depends on future events, which are inherently uncertain.

(b) This Certificate is issued by the undersigned solely in his/her capacity as an officer of the Company and not in any personal or individual capacity. No personal liability is intended or assumed by the undersigned.

(c) This Certificate is delivered only for the benefit of the Addressee(s) named above and their respective successors and assigns, and may not be relied upon by any other person without the prior written consent of the Company.

(d) Conclusions herein are based in part on the Solvency Opinion referenced above, and to the extent the Solvency Opinion contains assumptions, qualifications, or limitations, those apply to this Certificate mutatis mutandis.

VI. PROJECTIONS AND FINANCIAL SUMMARY

VII. CAPITAL STRUCTURE AFTER TRANSACTION

SIGNATURE

IN WITNESS WHEREOF, the undersigned has executed and delivered this Solvency Certificate as of the date first written above.

[COMPANY LEGAL NAME]

By: _____________________________________________
Name: [________________________________]
Title: Chief Financial Officer
Date: [__/__/____]

EXHIBITS

• Exhibit A — Solvency Opinion from [Independent Firm]
• Exhibit B — Pro Forma Consolidated Balance Sheet
• Exhibit C — Financial Projections (Years 1-5)
• Exhibit D — Summary of Key Assumptions

Sources and References

• Bankruptcy Code § 548 (Fraudulent transfers and obligations), 11 U.S.C. § 548: https://www.govinfo.gov/app/details/USCODE-2024-title11/USCODE-2024-title11-chap5-subchapIII-sec548
• Uniform Voidable Transactions Act (2014), §§ 4-5 (constructive and actual fraudulent transfer): https://www.uniformlaws.org/committees/community-home?CommunityKey=64ee1ccc-a3ae-4a5a-a2e1-20c9c6e7a4b1
• In re TOUSA, Inc., 680 F.3d 1298 (11th Cir. 2012) (lender liability for fraudulent transfer)
• In re Tribune Co. Fraudulent Conveyance Litig., 946 F.3d 66 (2d Cir. 2019) (safe-harbor defense)
• ABA Committee on Corporate Laws, Guidelines for Solvency Opinions (informal practice guidance)

Disclaimer: This template is provided for informational purposes only and does not constitute legal or financial advice. Solvency certificates have been central to high-profile fraudulent-transfer litigation (e.g., TOUSA, Tribune). Certifying officers should act in good faith, rely on adequate diligence and third-party opinions where appropriate, and consult with counsel on the specific contours of the certification.