EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
Delivered pursuant to Section 6.02(a) of that certain Revolving Credit Agreement dated as of March 9, 2023 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among Lumos Analytics Inc., a Delaware corporation (the "Borrower"), Ridgeline National Bank, National Association, as Administrative Agent (in such capacity, the "Administrative Agent") and as Collateral Agent, and the Lenders from time to time party thereto.
Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
Compliance Certificate for the fiscal quarter ended \_\_\_\_\_\_\_\_\_\_, 20\_\_\_\_ (the "Applicable Quarter").
This Compliance Certificate is required to be delivered within forty-five (45) days after the end of each fiscal quarter of the Borrower pursuant to Section 6.02(a) of the Credit Agreement. This Compliance Certificate shall be accompanied by the quarterly financial statements required to be delivered under Section 6.01(b) of the Credit Agreement (or, in the case of the fiscal quarter ending on the last day of each fiscal year, the annual audited financial statements required under Section 6.01(a) of the Credit Agreement) and any other reports, schedules, or information required to be delivered concurrently therewith pursuant to the Credit Agreement or any other Loan Document.
SECTION 1: OFFICER CERTIFICATION
The undersigned, being the duly authorized Chief Financial Officer of Lumos Analytics Inc. (the "Borrower"), hereby certifies to the Administrative Agent and each Lender, in such capacity and not in an individual capacity, as follows:
(a) I am the Chief Financial Officer of the Borrower and am duly authorized to execute and deliver this Compliance Certificate on behalf of the Borrower pursuant to the Credit Agreement and resolutions of the Board of Directors of the Borrower, copies of which have been previously delivered to the Administrative Agent.
(b) I have reviewed and am familiar with the contents of this Compliance Certificate and the Credit Agreement, including without limitation the financial covenants, reporting requirements, and negative covenants set forth therein, and the information contained herein is true, correct, and complete in all material respects as of the date hereof. In preparing this Compliance Certificate, I have made, or caused to be made, such inquiries and investigations as I have deemed necessary and appropriate to verify the accuracy and completeness of the information set forth herein.
(c) The financial statements and other information delivered concurrently herewith (if applicable) have been prepared in accordance with generally accepted accounting principles applied on a consistent basis (subject, in the case of unaudited interim financial statements, to normal year-end audit adjustments and the absence of footnote disclosures) and fairly present in all material respects the financial condition of the Borrower and its Subsidiaries, on a consolidated basis, as of the dates thereof and for the periods covered thereby.
(d) I have no knowledge of any condition or event that constitutes a Default or an Event of Default under the Credit Agreement, except as disclosed in Section 2 of this Compliance Certificate.
SECTION 2: DEFAULT / EVENT OF DEFAULT CERTIFICATION
The Borrower hereby certifies with respect to the existence or non-existence of any Default or Event of Default under the Credit Agreement as follows:
[Check one]
No Default or Event of Default. As of the date hereof and during the period covered by this Compliance Certificate, no Default or Event of Default has occurred and is continuing under the Credit Agreement.
Default or Event of Default Exists. As of the date hereof or during the period covered by this Compliance Certificate, a Default or Event of Default has occurred and/or is continuing as described below, and the Borrower has taken or proposes to take the following actions with respect thereto:
Nature of Default or Event of Default: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
Date(s) of occurrence: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
Section(s) of the Credit Agreement implicated: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
Action(s) taken or proposed to be taken: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
SECTION 3: REPRESENTATIONS AND WARRANTIES
The Borrower hereby certifies with respect to the truth and correctness of the representations and warranties set forth in the Credit Agreement and the other Loan Documents as follows:
[Check one]
Representations and Warranties True and Correct. Each of the representations and warranties made by the Borrower in Article V of the Credit Agreement and in each other Loan Document is true and correct in all material respects (or, in the case of any representation or warranty that is qualified by materiality or Material Adverse Effect, true and correct in all respects) on and as of the last day of the Applicable Quarter with the same effect as though made on such date (except to the extent any such representation or warranty expressly relates to an earlier date, in which case such representation and warranty was true and correct in all material respects (or, in the case of any representation or warranty qualified by materiality or Material Adverse Effect, true and correct in all respects) as of such earlier date).
Certain Representations and Warranties Not True and Correct. The following representations and warranties were not true and correct in all material respects as of the last day of the Applicable Quarter (or such earlier date to which they expressly relate), and the Borrower has taken or proposes to take the following actions with respect thereto:
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SECTION 4: CALCULATION OF ANNUALIZED RECURRING REVENUE ("ARR")
Complete the following calculation of Annualized Recurring Revenue as of the last day of the Applicable Quarter. "Annualized Recurring Revenue" has the meaning assigned to such term in Section 1.01 of the Credit Agreement.
(a) Monthly Recurring Revenue ("MRR") as of the last day of the Applicable Quarter: $\_\_\_\_\_\_\_\_\_\_
Guidance: MRR means the sum of all recurring subscription and platform fees invoiced or contracted as of the measurement date on a monthly basis, excluding one-time implementation or set-up fees, professional services revenue, usage-based overage charges, revenue attributable to customer contracts with an initial term of less than twelve (12) months, and revenue from customers for which a churn notice has been received or is reasonably expected, in each case as more fully defined in Section 1.01 of the Credit Agreement.
(b) Annualized Recurring Revenue (Line (a) × 12): $\_\_\_\_\_\_\_\_\_\_
(c) Applicable Minimum ARR Level for the Applicable Quarter (per Section 7.11(a) of the Credit Agreement): $\_\_\_\_\_\_\_\_\_\_
The Applicable Minimum ARR Levels, as set forth in Section 7.11(a) of the Credit Agreement, are as follows for reference purposes:
(d) ARR Surplus / (Deficit) (Line (b) minus Line (c)): $\_\_\_\_\_\_\_\_\_\_
SECTION 5: DETERMINATION OF SPRINGING FINANCIAL COVENANT APPLICABILITY
Complete the following to determine whether the financial covenants set forth in Section 7.11 of the Credit Agreement are in effect as of the last day of the Applicable Quarter. As set forth in Section 7.11 of the Credit Agreement, the financial covenants contained therein shall only be tested for any fiscal quarter in which Total Revolving Credit Outstandings as of the last day of such fiscal quarter exceed thirty-five percent (35%) of the Total Revolving Commitment.
(a) Aggregate Revolving Credit Outstandings as of the last day of the Applicable Quarter:
(i) Aggregate principal amount of Revolving Loans outstanding: $\_\_\_\_\_\_\_\_\_\_
(ii) Aggregate L/C Exposure (stated amount of all outstanding Letters of Credit, including drawn but unreimbursed amounts): $\_\_\_\_\_\_\_\_\_\_
(iii) Total Revolving Credit Outstandings (sum of (i) and (ii)): $\_\_\_\_\_\_\_\_\_\_
(b) Total Revolving Commitment: $30,000,000
(c) Springing Covenant Trigger Threshold (35% of Total Revolving Commitment): $10,500,000
(d) Do Total Revolving Credit Outstandings (Line (a)(iii)) exceed the Springing Covenant Trigger Threshold (Line (c))?
[Check one]
No — Total Revolving Credit Outstandings do not exceed $10,500,000. Financial covenants set forth in Section 7.11 of the Credit Agreement are NOT in effect for the Applicable Quarter. Sections 6A and 6B below need not be completed.
Yes — Total Revolving Credit Outstandings exceed $10,500,000. Financial covenants set forth in Section 7.11 of the Credit Agreement ARE in effect for the Applicable Quarter. Complete Sections 6A and 6B below.
SECTION 6A: COMPLIANCE WITH MINIMUM ARR COVENANT (IF SPRINGING COVENANT IS IN EFFECT)
Complete this section only if the springing financial covenants are in effect (i.e., "Yes" was selected in Section 5, Line (d) above). If the springing financial covenants are not in effect, this Section 6A may be left blank.
(a) Annualized Recurring Revenue as of the last day of the Applicable Quarter (from Section 4, Line (b)): $\_\_\_\_\_\_\_\_\_\_
(b) Applicable Minimum ARR Level for the Applicable Quarter (from Section 4, Line (c)): $\_\_\_\_\_\_\_\_\_\_
(c) In Compliance?
[Check one]
Yes — ARR (Line (a)) equals or exceeds the Minimum ARR Level (Line (b)). The Borrower is in compliance with Section 7.11(a) of the Credit Agreement.
No — ARR (Line (a)) is less than the Minimum ARR Level (Line (b)). The Borrower is not in compliance with Section 7.11(a) of the Credit Agreement. Describe any circumstances, cure rights exercised, or remedial actions taken or proposed to be taken:
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SECTION 6B: COMPLIANCE WITH MINIMUM LIQUIDITY COVENANT (IF SPRINGING COVENANT IS IN EFFECT)
Complete this section only if the springing financial covenants are in effect (i.e., "Yes" was selected in Section 5, Line (d) above). Minimum Liquidity is tested as of the last business day of each calendar month during the Applicable Quarter in accordance with Section 7.11(b) of the Credit Agreement. If the springing financial covenants are not in effect, this Section 6B may be left blank.
(a) Unrestricted Cash and Cash Equivalents held in Deposit Accounts subject to a Control Agreement in favor of the Collateral Agent, as of the last business day of each month in the Applicable Quarter:
(b) Undrawn Revolving Availability as of the last business day of each month in the Applicable Quarter (calculated as the Total Revolving Commitment minus Total Revolving Credit Outstandings as of such date):
(c) Total Liquidity (sum of Lines (a) and (b)) as of the last business day of each month in the Applicable Quarter:
(d) Minimum Liquidity Requirement (per Section 7.11(b) of the Credit Agreement): $8,000,000
(e) In Compliance for all monthly testing dates?
[Check one]
Yes — Liquidity (Line (c)) equaled or exceeded $8,000,000 on the last business day of each calendar month during the Applicable Quarter. The Borrower is in compliance with Section 7.11(b) of the Credit Agreement.
No — Liquidity fell below $8,000,000 on the following date(s): \\\\\\\\\\. Describe any circumstances, cure rights exercised, or remedial actions taken or proposed to be taken:
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SECTION 7: SCHEDULE OF PERMITTED INDEBTEDNESS
List all Indebtedness of the Borrower and its Subsidiaries outstanding as of the last day of the Applicable Quarter (other than Obligations arising under or in connection with the Credit Agreement and the other Loan Documents), and confirm compliance with the applicable baskets and limitations set forth in Section 7.03 of the Credit Agreement. If no such Indebtedness is outstanding, so indicate below.
Total Permitted Indebtedness (excluding Obligations under the Credit Agreement): $\_\_\_\_\_\_\_\_\_\_
The Borrower is in compliance with all Indebtedness limitations set forth in Section 7.03 of the Credit Agreement as of the last day of the Applicable Quarter.
SECTION 8: SCHEDULE OF CAPITAL EXPENDITURES
Set forth the aggregate Capital Expenditures made by the Borrower and its Subsidiaries during the Applicable Quarter and on a fiscal year-to-date basis, and confirm compliance with the Capital Expenditure limitations set forth in Section 7.10 of the Credit Agreement.
(a) Capital Expenditures during the Applicable Quarter: $\_\_\_\_\_\_\_\_\_\_
(b) Fiscal year-to-date Capital Expenditures (including the Applicable Quarter): $\_\_\_\_\_\_\_\_\_\_
(c) Annual Capital Expenditure Limit (per Section 7.10 of the Credit Agreement): $\_\_\_\_\_\_\_\_\_\_
Note: The base Capital Expenditure limit is $5,000,000 per fiscal year. Pursuant to Section 7.10 of the Credit Agreement, the Borrower may carry forward up to twenty-five percent (25%) of the unused portion of the Capital Expenditure limit from the immediately preceding fiscal year, subject to a maximum carry-forward amount of $1,250,000. Any such carry-forward amount shall be deemed utilized after the base limit for the current fiscal year has been fully utilized.
(d) Carry-forward amount from prior fiscal year (if applicable): $\_\_\_\_\_\_\_\_\_\_
(e) Adjusted Annual Capital Expenditure Limit (Line (c) + Line (d)): $\_\_\_\_\_\_\_\_\_\_
(f) Remaining Availability (Line (e) minus Line (b)): $\_\_\_\_\_\_\_\_\_\_
The Borrower is in compliance with the Capital Expenditure limitation set forth in Section 7.10 of the Credit Agreement.
SECTION 9: SCHEDULE OF RESTRICTED PAYMENTS
List all Restricted Payments (as defined in Section 1.01 of the Credit Agreement) made by the Borrower during the Applicable Quarter and on a fiscal year-to-date basis, and confirm compliance with the Restricted Payment limitations set forth in Section 7.06 of the Credit Agreement.
(a) Aggregate management equity repurchases during the current fiscal year: $\_\_\_\_\_\_\_\_\_\_
(b) Annual management equity repurchase limit (per Section 7.06(c) of the Credit Agreement): $1,500,000
(c) Remaining availability for management equity repurchases (Line (b) minus Line (a)): $\_\_\_\_\_\_\_\_\_\_
(d) Aggregate tax distributions during the current fiscal year: $\_\_\_\_\_\_\_\_\_\_
(e) Tax distribution limitation (per Section 7.06(b) of the Credit Agreement): an amount equal to the applicable combined federal, state, and local tax rate (as reasonably determined by the Borrower based on the tax rate applicable to the equity holder subject to the highest marginal tax rate) multiplied by the taxable income of the Borrower for the applicable period.
The Borrower is in compliance with all Restricted Payment limitations set forth in Section 7.06 of the Credit Agreement.
SECTION 10: PERMITTED ACQUISITIONS (IF APPLICABLE)
If any Permitted Acquisition (as defined in Section 1.01 of the Credit Agreement) was consummated by the Borrower or any Subsidiary during the Applicable Quarter, provide the following information. If no Permitted Acquisition was consummated during the Applicable Quarter, check the box below and proceed to Section 11.
No Permitted Acquisition was consummated during the Applicable Quarter.
If a Permitted Acquisition was consummated during the Applicable Quarter, complete the following:
Aggregate Permitted Acquisitions to date (cumulative over the term of the facility): $\_\_\_\_\_\_\_\_\_\_
Remaining aggregate Permitted Acquisition capacity: $\_\_\_\_\_\_\_\_\_\_
Pro forma compliance with all financial covenants (to the extent then in effect) has been confirmed as of the date of each such Permitted Acquisition on a pro forma basis after giving effect thereto:
Yes
No (describe below):
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SECTION 11: EXECUTION AND DELIVERY
IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of the date first written above and certifies that the foregoing information is true, correct, and complete in all material respects. The undersigned acknowledges that the Administrative Agent and the Lenders are relying on the accuracy and completeness of this Compliance Certificate in connection with the administration of the Credit Agreement, and any material inaccuracy herein may constitute an Event of Default under Section 8.01 of the Credit Agreement.
LUMOS ANALYTICS INC.
By: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
Name: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\_
Title: Chief Financial Officer
Date: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\
ADMINISTRATIVE DELIVERY INFORMATION
Deliver this completed Compliance Certificate, together with all required accompanying financial statements and schedules, to:
Ridgeline National Bank, National Association as Administrative Agent 600 Lexington Avenue, 22nd Floor New York, NY 10022
Attention: Agency Services — Lumos Analytics Account
Email: agency.services@ridgelinenational.com
With a copy to Lender's Counsel:
Whitmore Graves & Fitch LLP 51 West 52nd Street, 34th Floor New York, NY 10019
Attention: Credit Finance Group
Email: creditfinance@whitmoregraves.com
Delivery of this Compliance Certificate by electronic mail in portable document format (.pdf) shall satisfy the delivery requirements of the Credit Agreement, provided that the original executed counterpart shall be delivered to the Administrative Agent upon request.
| Testing Period | Minimum ARR Level | ||||
| Testing Period ending Q1 2023 through Q4 2023 | $48,000,000 | ||||
| Testing Period ending Q1 2024 through Q4 2024 | $55,200,000 | ||||
| Testing Period ending Q1 2025 through Q4 2025 | $63,480,000 | ||||
| Testing Period ending Q1 2026 through maturity | $73,002,000 | ||||
| Month | Month Ending Date | Unrestricted Cash and Cash Equivalents | |||
| Month 1 | \\\\\\\\\\ | $\\\\\\\\\\ | |||
| Month 2 | \\\\\\\\\\ | $\\\\\\\\\\ | |||
| Month 3 | \\\\\\\\\\ | $\\\\\\\\\\ | |||
| Month | Month Ending Date | Undrawn Revolving Availability | |||
| Month 1 | \\\\\\\\\\ | $\\\\\\\\\\ | |||
| Month 2 | \\\\\\\\\\ | $\\\\\\\\\\ | |||
| Month 3 | \\\\\\\\\\ | $\\\\\\\\\\ | |||
| Month | Month Ending Date | Total Liquidity | |||
| Month 1 | \\\\\\\\\\ | $\\\\\\\\\\ | |||
| Month 2 | \\\\\\\\\\ | $\\\\\\\\\\ | |||
| Month 3 | \\\\\\\\\\ | $\\\\\\\\\\ | |||
| Description of Indebtedness | Creditor / Counterparty | Outstanding Principal Amount | Applicable Basket / Section Reference | Basket Limit | Remaining Basket Availability |
| Purchase money obligations / capital lease obligations | \\\\\\\\\\ | $\\\\\\\\\\ | Section 7.03(d) | $2,000,000 | $\\\\\\\\\\ |
| Unsecured intercompany indebtedness | \\\\\\\\\\ | $\\\\\\\\\\ | Section 7.03(f) | $1,000,000 | $\\\\\\\\\\ |
| \\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | $\\\\\\\\\\ |
| \\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | $\\\\\\\\\\ |
| \\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | $\\\\\\\\\\ |
| Type of Restricted Payment | Date of Payment | Amount | Applicable Basket / Section Reference | ||
| \\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | \\\\\\\\\\ |
| \\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | \\\\\\\\\\ | |
| \\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | \\\\\\\\\\ | |
| \\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | \\\\\\\\\\ | |
| Name of Acquired Entity / Assets | Date of Acquisition | Aggregate Consideration Paid (including assumed indebtedness and deferred consideration) | Individual Acquisition Limit (Section 7.09(a)(iv)) | Aggregate Acquisition Limit (Section 7.09(a)(v)) |
| \\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | $10,000,000 | $20,000,000 |
| \\\\\\\\\\ | \\\\\\\\\\ | $\\\\\\\\\\ | $10,000,000 | $20,000,000 |