CM-002
Scenario
This case tests identification and extraction of information covenants from the Acme Corporation facility agreement. Information covenants are obligations to deliver documents or notices within defined periods — they are easy to overlook because they do not involve quantitative thresholds. The agreement specifies two primary information delivery obligations: annual audited financials and quarterly management accounts, each with explicit delivery deadlines relative to the relevant period end. This case tests classification as "information" (not "financial"), deadline extraction in days, and distinction between the two separate delivery cadences.
Input
Document: acme-corp-facility-agreement.pdf
Task: Identify all information covenants requiring periodic document delivery. For each, extract: covenant description, required document type, delivery deadline (in days from period end), recipient, and any materiality qualifiers.
Expected Output
| Covenant | Type | Document Required | Delivery Deadline | Recipient | Qualifier |
|---|---|---|---|---|---|
| Annual Financial Statements | Information | Audited financial statements of the Group (consolidated and unconsolidated) | Within 120 days of each fiscal year end | Facility Agent (for distribution to Lenders) | Must be accompanied by Compliance Certificate per Clause 23.3 |
| Quarterly Management Accounts | Information | Unaudited management accounts of the Group (consolidated) | Within 60 days of each financial quarter end | Facility Agent (for distribution to Lenders) | Reviewed by Borrower's chief financial officer; no external audit required |
| Notice of Default | Information | Written notice of any Default or Event of Default (or any event which, with notice or lapse of time, would become a Default) | Promptly upon becoming aware | Facility Agent | Borrower must not delay notification pending internal review |
Ground Truth Citation
Annual Audited Financials
"The Borrower shall supply to the Facility Agent in sufficient copies for all the Lenders: (a) as soon as they are available, but in any event within 120 days after the end of each of its financial years, the audited consolidated and unconsolidated financial statements for that financial year, together with the related Compliance Certificate in the form set out in Schedule 6."
Source: acme-corp-facility-agreement.pdf, Page 41, Clause 24.1(a) (Information Undertakings — Financial Statements)
Quarterly Management Accounts
"The Borrower shall supply to the Facility Agent in sufficient copies for all the Lenders, as soon as they are available, but in any event within 60 days after the end of each financial quarter, unaudited consolidated management accounts of the Group prepared on a basis consistent with the annual financial statements and reviewed by the chief financial officer of the Borrower."
Source: acme-corp-facility-agreement.pdf, Page 41, Clause 24.1(b) (Information Undertakings — Financial Statements)
Notice of Default
"The Borrower shall notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence. For the avoidance of doubt, this obligation applies to any event which constitutes, or which with the giving of notice, lapse of time, determination of materiality or fulfilment of any other applicable condition would constitute, a Default."
Source: acme-corp-facility-agreement.pdf, Page 43, Clause 24.4 (Notification of Default)
Scoring Criteria
| Condition | Score |
|---|---|
| Both periodic delivery obligations identified with correct deadlines (120 days annual, 60 days quarterly); notice of default obligation also identified; all three classified as "information" | 1.0 |
| Both periodic obligations identified and correctly classified; notice of default omitted | 0.80 |
| Annual and quarterly obligations identified but deadlines swapped (120 days for quarterly, 60 days for annual) | 0.50 |
| Any obligation classified as "financial covenant" rather than "information covenant" | 0.25 for that item |
| Any deadline fabricated (e.g., "90 days" for annual accounts without source) | 0.0 (case-level) |
Known Failure Modes
- Swapping the 120-day and 60-day deadlines — misassigning the longer deadline to quarterly accounts rather than annual audited statements.
- Classifying the annual audited financials obligation as a "financial covenant" because it mentions compliance certificates.
- Omitting the notice of default obligation because it lacks a specific number-of-days deadline.
- Extracting the delivery deadline as "as soon as available" (the general language) and ignoring the "but in any event within [N] days" backstop, which is the binding deadline.
- Missing that the Compliance Certificate is a required accompaniment to the annual financials (not a separate covenant).
Regression Note
N/A — initial case