This is a template for an Opinion Letter of Counsel regarding a Merger. The letter, prepared by the attorney for the company that is going to be acquired, and for the purchasing company, opines that the company to be acquired is in good standing, qualified to do business, has no serious pending litigation, can and will execute the merger agreement, which will be binding upon the company, and explains the company's current capitalization. This document contains language that is common for any industry. Use of this letter is important because it determines whether or not a merger will be viable by auditing the company to be acquired.
This is a template for an Opinion Letter of Counsel regarding a Merger. The letter, prepared by the attorney for the company that is going to be acquired, and for the purchasing company, opines that the company to be acquired is in good standing, qualified to do business, has no serious pending litigation, can and will execute the merger agreement, which will be binding upon the company, and explains the company's current capitalization. This document contains language that is common for any industry. Use of this letter is important because it determines whether or not a merger will be viable by auditing the company to be acquired. ___________ [Instruction: Insert Law Office Name] ___________ [Instruction: Insert Company Address 1] ___________ [Instruction: Insert Company Address 2] ___________ [Instruction: Insert Date] ___________ [Instruction: Insert Names] ___________ [Instruction: Insert Address 1] ___________ [Instruction: Insert Address 2] Re: Merger of ___________ [Instruction: Insert Corporation Name] and ___________ [Instruction: Insert Corporation Name] Gentlepersons: We have acted as counsel for ___________ [Instruction: Insert Corporation Name], a ___________ [Instruction: Insert State] corporation (the “Company”), in connection with the negotiation, execution, and delivery of that certain Agreement and Plan of Merger (the “Merger Agreement”) dated as of ___________ [Instruction: Insert Date], by and between the Company, the Company’s shareholders (the “Shareholders”), and ___________ [Instruction: Insert Acquiring Corporation] (the “Buyer”). This opinion letter is delivered pursuant to section __ [Instruction: Insert Section Number] of the Merger Agreement. Unless otherwise defined herein or the context otherwise requires, all capitalized terms used in this opinion letter shall have the respective meanings assigned to them in the Merger Agreement. 1. Examinations. In rendering the opinions hereinafter expressed, we have examined and relied upon such documents and instruments as we have deemed appropriate, including the following documents and instruments: ___________ [Instruction: Insert documents and instruments that were reviewed. Examples of documents that may have been reviewed are: the Merger Agreement; the “Certificate of Merger”; Certificates from officers and employees of the Company; Certificate of Status indicating that the Company is in good standing; Letter from the Franchise Tax Board of the State of California relating to the tax status of the Company; Resolutions of the board of directors and shareholders of the Company regarding to the acquisition documents; the Articles of Incorporation of the Company; The Company’s Certificate of Listing; and the bylaws of the Company.] 2. Assumptions. In conducting our examination, we have assumed, without investigation, the genuineness of all signatures, the correctness of all certificates, the authenticity of all documents submitted to us as originals, the conformity to original documents of all copies submitted to us and the authenticity of the originals of such copies, and the accuracy and completeness of all records made available to us by the Company and the Shareholders. In addition, we have assumed, without investigation, the accuracy of the representations, warranties, and covenants as to factual matters made in the Merger Agreement and the Certificate of Merger (collectively, the “Acquisition Documents”) and the accuracy of representations and statements as to factual matters made by officers and employees of the Company, the Shareholders, and public officials. Whenever a statement herein is qualified by “known to us,” “we are not aware,” “to our knowledge,” or similar phrase, it is intended to indicate that, during the course of our representation of the Company and the Shareholders, no information that would give us current actual knowledge of the inaccuracy of such statement has come to the attention of those attorneys in this firm who have rendered legal services in connection with the representation described in the introductory paragraph of this opinion letter. However, except as otherwise expressly indicated, we have not undertaken any independent investigation to determine the accuracy of such statement, and any limited inquiry undertaken by us during the preparation of this opinion letter should not be regarded as such an investigation; no inference as to our knowledge of any matters bearing on the accuracy of any such statement should be drawn from the fact of our representation of the Company or the Shareholders. The opinions hereinafter expressed are subject, without investigation, to the following assumptions: A. Upon execution and delivery, the Merger Agreement will be a valid, binding, and enforceable obligation of the respective parties thereto. The Acquisition Documents will be enforced in circumstances and in a manner in which it is commercially reasonable to do so. B. Other than the Company or the Shareholders, no party to the transaction contemplated by the Acquisition Documents, or any document or oral agreement relating thereto, is subject to any statute, rule, or regulation, or to any impediment to which contracting parties are generally not subject, that requires the Company, the Shareholders, or such party to obtain the consent of, or to make a declaration or filing with, any governmental authority. C. All terms, provisions, and conditions of, or relating to, the merger transaction are correctly and completely reflected in the Acquisition Documents. 3. Qualifications. The opinions hereinafter expressed are subject to the following qualifications: A. Our opinions in paragraphs 4.I) and 4.J), are subject to: i. The effect of bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent conveyance, and other similar laws now or hereafter in effect relating to or affecting the rights of creditors generally; ii. The limitations imposed by state or federal law, and/or equitable principles upon the validity, binding effect, or enforceability of any of the remedies, covenants, or other provisions of the Acquisition Documents and upon the availability of injunctive relief or other equitable remedies, including, without limitation, the effect of state and federal court decisions, invoking statutes or principles of equity, that have held that certain covenants and provisions of agreements are unenforceable where: (1) the breach of such covenants or provisions imposes restrictions or burdens upon one party, including the acceleration of indebtedness due under debt instruments, and it cannot be demonstrated that the enforcement of such restrictions or burdens is reasonably necessary for the protection of the other party, or (2) a party’s enforcement of such covenants or provisions under the circumstances would violate such party’s implied covenant of good faith and fair dealing; and iii. The power of state or federal courts to refuse to enforce, or to stay the enforcement of, any provision of the Acquisition Documents that purports to waive the rights of the Company or the Shareholders to assert the claims or defenses available to the Company or the Shareholders by statute, common law, or equity. B. Our opinion in paragraph 4.B) is based solely upon certificates from public officials, as to the qualification and good standing of the Company in the states specified. C. Our opinion in paragraph 4.F) is subject to the following: i. We express no opinion relating to the effect of the Acquisition Documents under any financial test or ratio contained in any of the instruments or agreements referred to in paragraph 4.F); and ii. When reviewing instruments and Merger Agreements that are governed by the laws of any jurisdiction other than ___________ [Instruction: Insert State], we have not undertaken any independent investigation of the laws of such other jurisdiction, and we refer you to our qualification in paragraph 3(F). D. Our opinions below are limited to the matters expressly set forth in this opinion letter, and no opinion is to be implied or may be inferred beyond the matters expressly so stated. E. We disclaim any obligation to update this opinion letter for events occurring after the date of this opinion letter. F. Except as otherwise provided herein, our opinions below are limited to the effect of the state laws of the State of ___________ [Instruction: Insert State]; accordingly, we express no opinion with respect to the laws of any other jurisdiction, or the effect thereof, on the transactions contemplated by the Acquisition Documents. 4. Opinions. Based upon and subject to the foregoing, we are of the opinion that: A. The Company is a corporation validly existing and in good legal standing under the laws of the State of ___________ [Instruction: Insert State]. B. The Company is qualified to do business as a foreign corporation and in good standing in the states of ___________ [Instruction: Insert States]. C. The Company has corporate power to execute, deliver, and perform the Merger Agreement and to consummate the transactions evidenced thereby. The Merger Agreement has been duly authorized by all necessary corporate action on the part of the Company and has been duly executed, acknowledged, and delivered by the Company. D. The Shareholders have full power and authority to enter into and perform the Merger Agreement and ___________ [Instruction: Insert Any Other Documents]. The Merger Agreement and ___________ [Instruction: Insert Any Other Documents] have been duly executed, acknowledged, and delivered by the Shareholders. E. The Company’s authorized capitalization consists of ___________ (_____) [Instruction: Insert Amount] shares of ___________ [Instruction: Insert Type] stock, each with a par value of ___________ Dollars ($_____) [Instruction: Insert Amount], of which ___________ (_____) [Instruction: Insert Amount] shares are issued and outstanding. We are not aware of any outstanding subscriptions, warrants, calls, options, rights, commitments, or agreements by which the Company is bound calling for the issuance of shares of any class of its capital stock, or for the issuance of any securities convertible or exchangeable, actually or contingently, into shares of its capital stock. F. The execution and delivery of the Acquisition Documents and the merger provided for therein do not: i. Conflict with or result in a violation of the Company’s Articles of Incorporation or Bylaws or any judgment, order, or decree known to us of any court, arbitrator, or governmental agency, rendered in a matter to which the Company was subject, and in which it was a named party; and ii. Result in a material breach of any of the terms or conditions of, result in the imposition of any lien or encumbrance upon any properties of the Company pursuant to, or constitute a default or result in an occurrence of an event as to which any holder or holders of indebtedness may declare the same due and payable under any credit agreement or other similar instrument known to us under which the Company is a party or by which the Company or any of its properties is bound. G. Except as otherwise disclosed, there is no litigation, proceeding, or investigation known to us before or by any court, arbitrator, or governmental authority, whether state, local, or federal, pending or threatened against the Company, wherein an unfavorable decision, ruling, or finding would materially and adversely: (i) affect the Merger Agreement or the merger provided for therein, or (ii) affect the properties, existence, financial condition, or business of the Company taken as a whole. H. To our knowledge, no approval, authorization, license, permit, or other consent of, or declaration or filing with, any federal or state governmental authority is required of the Company on or prior to the date of this opinion letter for the execution or delivery of the Merger Agreement and for the merger provided for therein, or if so required, such approval, authorization, license, permit or other consent has been obtained or such declaration or filing has been made. I. The Merger Agreement is a valid and binding obligation of the Company and is enforceable against the Company. J. The Merger Agreement is a valid and binding obligation of each of the Shareholders and is enforceable against each of the Shareholders. K. Merger. Upon completion of filing of the Certificate of Merger with the Secretary of State of ___________ [Instruction: Insert State], the merger provided for in the Merger Agreement will become effective in accordance with the terms of the Certificate of Merger. L. None of the Company’s shareholders have appraisal rights arising out of consummation of the transactions contemplated by the Merger Agreement. 5. Limitation. This opinion letter is rendered solely for the Buyer’s benefit in connection with the above transaction. Without our prior written consent, this opinion letter may not be: (i) relied upon by any other party or for any other purpose; (ii) quoted in whole or in part or otherwise referred to in any report or document; or (iii) furnished to any party, except in connection with the enforcement of the Acquisition Documents. Very Truly Yours, ________________________________ [Instruction: sign] ___________ [Instruction: Insert Name of Signatory], Esq.
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