How to Track an Ordinary Course Covenant

How to track an ordinary course covenant is an interim-operations ledger from signing through closing (and any consent requests), not another MAE-definition tab. For each signed deal with a gap between signing and closing, log whether an ordinary-course operating covenant is present or silent, whether it is absolute or efforts-qualified, whether "consistent with past practice" appears, which negative covenants and buyer-consent exceptions sit beside it, how the closing-condition bring-down of covenants is worded, and status. Raziel's MAE definition tracking page is the walk-right definition. This page is the ordinary-course operating covenant.

This is not legal, tax, insurance, or investment advice. Raziel does not provide it. Copy the ordinary-course sentence from the PDF. Do not invent a 2025 Study percentage when the free Goulston / K&L Gates / BLT recaps do not publish one for interim ordinary-course inclusion, and do not paste earnout operating-covenant prints onto the interim row.

What this ledger is (and is not)

An ordinary course covenant requires the target, between signing and closing, to conduct the business in the ordinary course (often consistent with past practice) and not to take listed actions without buyer consent. Pullman & Comley, 10 M&A Trends Gleaned from the 2020-2021 ABA Deal Points Study (January 6, 2022, JDSupra), summarizing the ABA 2020-2021 Private Target Study (123 transactions, $30M to $750M), reports that almost 100% of separate sign-and-close transactions since 2014 have included a post-signing pre-closing covenant to operate in the ordinary course. Only about 15% of deals on average over the prior decade qualified that covenant by an "efforts" standard (reasonable best efforts or commercially reasonable efforts). In 2020-2021, 40% of those covenants were efforts-qualified. Public 2025 ABA Study recaps (K&L Gates Dec 19, 2025; Business Law Today; Goulston May 6, 2026) describe covenants as a Study topic area but do not publish a 2025 ordinary-course inclusion or efforts-qualification percentage in those free write-ups. Do not invent one. Keep earnout operating covenants separate: Wagner Hicks (2025 Study recap) reports that in earnout deals, only 14% include a buyer covenant to run the business consistent with past practice during the earnout period, and only 5% include a covenant to maximize the earnout. Those are post-closing earnout prints, not the interim signing-to-closing row. The ABA 2025 sample frame is 139 agreements, $25M to $900M, 42 simultaneous / 97 deferred. Those are study snapshots. Your covenants article controls.

This ledger is not mae-definition tracking (whether a downturn is an MAE), not disclosure-schedule-update tracking (whether schedules may be updated before closing), and not mac-qualifier tracking (how MAC/MAE words qualify reps). Consent exceptions and negative-covenant lists belong in this row's cells.

Seven columns on one row

Open one row per signed deal with a deferred closing (or mark simultaneous close, interim covenant unused). Attach the covenants article and the closing-conditions bring-down of covenants.

• Present or silent (interim). Ordinary-course covenant present, or silent. Pullman / ABA 2020-2021: almost 100% of separate sign-and-close deals since 2014. Do not invent a 2025 Study percentage. Do not paste Wagner Hicks earnout 14% / 5% onto this interim cell.

• Absolute vs efforts-qualified. Pullman: ~15% decade average efforts-qualified; 40% in 2020-2021. Copy "shall conduct," "reasonable best efforts," "commercially reasonable efforts," or the PDF's exact phrase. Do not paste 40% onto an absolute covenant.

• Consistent with past practice yes/no. Copy whether ordinary course is tied to past practice, and any industry or pandemic-style exceptions. Silent past-practice language is a different book than an express past-practice tether.

• Negative covenant list / consent exceptions. Copy the do-not list (debt, equity issuances, M&A, material contracts, employee actions) and whether buyer consent may not be unreasonably withheld. Mark schedule exceptions.

• Bring-down / closing-condition standard. Copy whether covenants must be performed in all material respects (or another standard) as a closing condition. Pointer only to any MAE closing condition on the MAE page.

• Deferred vs simultaneous. ABA / K&L Gates 2025: 97 of 139 deferred; 42 simultaneous. Simultaneous closes rarely need an interim ordinary-course row. Copy which yours is.

• Status. Copied, consent requested, consent granted/denied, alleged breach noticed, waived, closed, or terminated. When an interim ops fight arises, book the date and the consent trail.

Copy the clause, not the study percentage

Do not paste almost-100% onto a simultaneous-close deal that never needed an interim covenant. Do not invent a 2025 ABA Study percentage for ordinary-course inclusion or efforts qualification when the free 2025 recaps do not publish one. Do not paste Pullman's 40% onto an absolute covenant, and do not paste Wagner Hicks earnout 14% / 5% onto the interim row. Do not fold this row into mae-definition tracking, disclosure-schedule-update tracking, or mac-qualifier tracking. MAE is the walk-right definition. Disclosure-schedule updates are a different interim risk tool. MAC qualifiers sit on reps. This page is the ordinary-course operating promise between signing and closing.

When the target asks for consent to act outside ordinary course, log the request, the response, and whether the covenant was efforts-qualified. That trail is what deal counsel will ask for before any interim breach fight.

When the ledger holds

The row holds if the seven cells are copied from the PDFs (or marked missing). It fails when you invent an ordinary-course covenant, invent a 2025 Study percentage, paste earnout prints onto the interim cell, or treat the MAE tab as if it answered the operating-covenant question. Raziel's alternative asset dashboard is where the ordinary-course sentence, the consent trail, and any alleged-breach note should sit together. Raziel does not decide your interim-ops dispute. Copy the seven columns.