1002-00002 · Pinnacle Venture Fund II LP · Closing

legal-opinion-form.docx DOCUMENT Funds

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EXHIBIT [__]

FORM OF LEGAL OPINION OF COMPANY COUNSEL

INSTRUCTIONS TO PREPARER: This is a blank form of legal opinion to be attached as an exhibit to the Series A Preferred Stock Purchase Agreement. All bracketed fields are to be completed at the time the opinion is delivered at closing. This form has been agreed upon by investor counsel and company counsel and reflects the negotiated scope of the legal opinion to be delivered as a condition to closing. All instructional annotations in brackets are for drafting guidance only and should be removed from the final executed opinion letter.

[INSERT FIRM NAME AND ADDRESS]

[FIRM LETTERHEAD]

[Closing Date]

[Insert Lead Investor Name] [Insert Lead Investor Address]

[Insert Co-Investor Name(s)] [Insert Co-Investor Address(es)]

[List each Investor set forth on the Schedule of Investors to the Purchase Agreement. If investors are numerous, this opinion may be addressed to the Lead Investor with an express statement that each additional Investor listed on the Schedule of Investors may rely on this opinion as if it were separately addressed to such Investor. See Section 5.1 below for reliance language.]

Re: Series A Preferred Stock Financing of [Insert Company Name]

Ladies and Gentlemen:

We have acted as counsel to [Insert Company Name], a [Insert State] corporation (the "Company"), in connection with the transactions contemplated by the Series A Preferred Stock Purchase Agreement, dated as of [Closing Date] (the "Purchase Agreement"), by and among the Company and the investors listed on the Schedule of Investors attached thereto (each, an "Investor" and collectively, the "Investors"), the Amended and Restated Certificate of Incorporation of the Company (the "Restated Certificate"), the Investors' Rights Agreement, dated as of [Closing Date] (the "Investors' Rights Agreement"), the Right of First Refusal and Co-Sale Agreement, dated as of [Closing Date] (the "ROFR/Co-Sale Agreement"), and the Voting Agreement, dated as of [Closing Date] (the "Voting Agreement" and, together with the Purchase Agreement, the Restated Certificate, the Investors' Rights Agreement, and the ROFR/Co-Sale Agreement, the "Transaction Documents").

This opinion letter is delivered to you pursuant to Section [__] of the Purchase Agreement as a condition to the obligations of the Investors to consummate the purchase and sale of shares of Series A Preferred Stock of the Company at the closing of the transactions contemplated by the Purchase Agreement. [Insert internal cross-reference to the specific SPA section requiring delivery of this opinion, e.g., "Section 4.1(g)" or "Section 5.4."]

Except as otherwise defined herein, capitalized terms used but not defined in this opinion letter have the meanings ascribed to them in the Purchase Agreement.

1. Documents and Items Reviewed

In rendering the opinions expressed below, we have examined originals or copies of the following documents and such other documents, records, certificates, and instruments as we have deemed necessary or appropriate for purposes of the opinions expressed herein:

(a) The Purchase Agreement, including all Exhibits and Schedules thereto;

(b) The Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of the State of [Insert State] on or about the Closing Date (the "Restated Certificate");

(d) The Investors' Rights Agreement, dated as of [Closing Date], by and among the Company, the Investors, and the other parties named therein;

(e) The Right of First Refusal and Co-Sale Agreement, dated as of [Closing Date], by and among the Company, the Investors, and the other parties named therein;

(f) The Voting Agreement, dated as of [Closing Date], by and among the Company, the Investors, and the other parties named therein;

(g) [Insert any Management Rights Letters between the Company and one or more Investors, if applicable];

(h) Resolutions of the Board of Directors of the Company adopted by unanimous written consent dated [Insert Date], approving the Transaction Documents and the transactions contemplated thereby, including the authorization and issuance of the shares of Series A Preferred Stock and the reservation of shares of Common Stock issuable upon conversion thereof (the "Board Resolutions");

(i) Resolutions of the stockholders of the Company adopted by written consent dated [Insert Date], approving the Restated Certificate and such other matters as were submitted for stockholder approval in connection with the transactions contemplated by the Transaction Documents (the "Stockholder Resolutions");

(j) A certificate of good standing (or certificate of status or equivalent) of the Company issued by the Secretary of State of the State of [Insert State of Incorporation], dated on or about the Closing Date;

(k) A certificate of good standing (or equivalent) of the Company issued by the Secretary of the Commonwealth of [Insert State of Qualification], dated on or about the Closing Date [if applicable — include only if the Company is qualified to do business as a foreign corporation in one or more jurisdictions and a foreign qualification opinion has been agreed upon];

(l) A certificate of an officer of the Company, dated as of the Closing Date, as to certain factual matters relevant to the opinions expressed herein (the "Officer's Certificate"); and

(m) Such other documents, records, corporate minutes, certificates of public officials, and instruments as we have deemed necessary or appropriate as a basis for the opinions expressed herein.

The documents listed in clauses (a) through (f) above are collectively referred to herein as the "Transaction Documents."

2. Assumptions

In rendering the opinions expressed below, we have assumed, without independent investigation or verification, and with your consent and concurrence, the following:

(a) The genuineness of all signatures on all documents and instruments reviewed by us in connection with this opinion letter.

(b) The authenticity and completeness of all documents submitted to us as originals and the conformity to authentic originals of all documents submitted to us as copies (whether certified, conformed, photostatic, electronic, or otherwise identified as copies).

(d) That each party to the Transaction Documents (other than the Company) has been duly organized or formed, is validly existing, and is in good standing under the laws of its respective jurisdiction of organization or formation.

(e) That each party to the Transaction Documents (other than the Company) has the requisite corporate, limited liability company, partnership, or other organizational power and authority to execute, deliver, and perform its obligations under the Transaction Documents to which it is a party.

(f) That the Transaction Documents have been duly authorized by all necessary corporate, limited liability company, partnership, or other organizational action on the part of each party thereto (other than the Company), and have been duly executed and delivered by each such party, and constitute the legal, valid, and binding obligations of each such party, enforceable against each such party in accordance with their respective terms.

(g) That the representations and warranties of each Investor set forth in the Purchase Agreement are true, correct, and complete in all respects as of the date hereof.

(h) That the offering, sale, and issuance of the shares of Series A Preferred Stock (and the shares of Common Stock issuable upon conversion thereof) are exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2) thereof and/or Regulation D promulgated thereunder, and from the registration or qualification requirements of applicable state securities or "blue sky" laws, in each case in reliance upon the accuracy and completeness of the representations and warranties of the Investors set forth in the Purchase Agreement.

(i) [Insert any additional assumptions as negotiated between investor counsel and company counsel, including but not limited to assumptions regarding the accuracy of the Officer's Certificate, the completeness of the corporate records provided to counsel, or the absence of oral modifications to any Transaction Documents.]

We have also relied, to the extent we have deemed appropriate and without independent investigation, upon the Officer's Certificate and certificates of public officials as to certain matters of fact relevant to the opinions expressed herein. We have made no independent investigation or verification of such facts and do not assume responsibility for the accuracy or completeness thereof. Furthermore, we have assumed that the Transaction Documents accurately reflect the mutual understanding and agreement of the parties thereto with respect to the subject matter thereof and that there are no oral or written statements, agreements, understandings, or course of dealing that modify, supplement, or contradict the terms of the Transaction Documents.

3. Opinions

Based on and subject to the foregoing and the qualifications, limitations, and exceptions set forth in Section 4 below, we are of the opinion that:

3.1 Due Organization and Good Standing. The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of [Insert State of Incorporation]. [If applicable, include opinion regarding qualification in foreign jurisdictions, e.g.: "The Company is duly qualified or licensed to do business as a foreign corporation and is in good standing in the Commonwealth of [Insert State], which is the only jurisdiction in which such qualification or licensing is required by the nature of the business conducted by the Company or the character or location of the properties owned, leased, or operated by it, except where the failure to be so qualified or licensed would not have a material adverse effect on the Company."]

3.2 Corporate Power and Authority. The Company has the requisite corporate power and authority to (a) own, lease, and operate its properties and assets as currently owned, leased, and operated, (b) conduct its business as presently conducted and as proposed to be conducted, (c) execute and deliver each of the Transaction Documents to which it is a party, and (d) perform and comply with its obligations under each of the Transaction Documents to which it is a party.

3.3 Authorization. The execution, delivery, and performance by the Company of each of the Transaction Documents to which it is a party, and the consummation by the Company of the transactions contemplated thereby, including without limitation the authorization, issuance, and sale of the shares of Series A Preferred Stock pursuant to the Purchase Agreement and the reservation for issuance of the shares of Common Stock issuable upon conversion of the Series A Preferred Stock, have been duly authorized by all necessary corporate action on the part of the Company, including the approval of the Company's Board of Directors (as evidenced by the Board Resolutions) and, to the extent required by applicable law or the Company's organizational documents, the approval of the Company's stockholders (as evidenced by the Stockholder Resolutions). No other corporate proceedings on the part of the Company or its stockholders are necessary to authorize the execution, delivery, and performance of the Transaction Documents or the consummation of the transactions contemplated thereby.

3.4 Valid Issuance of Series A Preferred Stock. The shares of Series A Preferred Stock being issued and sold to the Investors pursuant to the Purchase Agreement, when issued and delivered against payment of the consideration therefor in accordance with the terms of the Purchase Agreement and the Restated Certificate, will be validly issued, fully paid, and nonassessable, and will be free and clear of all liens, encumbrances, and restrictions, except for restrictions on transfer imposed by the Transaction Documents, the Restated Certificate, applicable securities laws, and any liens created by or through the Investors themselves.

[If convertible note conversion shares are being issued as Series A Preferred Stock in connection with the transactions contemplated by the Purchase Agreement, include the following additional sentence: "The shares of Series A Preferred Stock being issued upon conversion of the convertible promissory notes described in Section [__] of the Purchase Agreement (or in the recitals thereto), when issued in accordance with the terms of such convertible promissory notes and the Restated Certificate, will be validly issued, fully paid, and nonassessable."]

3.5 Reservation of Common Stock. The shares of Common Stock of the Company issuable upon conversion of the Series A Preferred Stock have been duly and validly reserved for issuance by the Company, and when issued upon conversion of the Series A Preferred Stock in accordance with the terms of the Restated Certificate, such shares of Common Stock will be validly issued, fully paid, and nonassessable, and will be free and clear of all liens, encumbrances, and restrictions, except for restrictions on transfer imposed by the Transaction Documents, the Restated Certificate, applicable securities laws, and any liens created by or through the holders thereof.

3.6 Enforceability. Each of the Transaction Documents to which the Company is a party constitutes the legal, valid, and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, subject to the Enforceability Exceptions (as defined in Section 4.1 below).

3.7 No Conflicts. The execution, delivery, and performance by the Company of the Transaction Documents to which it is a party, and the consummation by the Company of the transactions contemplated thereby (including the issuance and sale of the shares of Series A Preferred Stock and the reservation for issuance of the shares of Common Stock issuable upon conversion thereof), do not and will not:

(a) violate, conflict with, or result in a breach of any provision of, or constitute a default under, the Restated Certificate or the Bylaws of the Company;

(b) result in any violation of, or constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under, or give rise to a right of termination, cancellation, amendment, or acceleration of any obligation or loss of any material benefit under, any material agreement, contract, lease, license, instrument, note, bond, mortgage, indenture, or other obligation to which the Company is a party or by which any of its properties or assets are bound, as listed on Schedule [__] to the Purchase Agreement (the "Material Agreements"); or

(c) result in any violation of any statute, rule, regulation, order, judgment, or decree of the State of [Insert State of Incorporation] applicable to the Company or any of its properties or assets.

[Scope of no-conflicts opinion limited to laws of [Insert State of Incorporation] and federal laws of the United States — include express limitation in qualifications section. See Section 4.2 below. The scope of the no-conflicts opinion with respect to Material Agreements (clause (b)) is limited to those agreements listed on Schedule [__] to the Purchase Agreement and reviewed by this firm. Counsel has not undertaken an independent search for undisclosed agreements.]

3.8 Governmental Consents. No consent, approval, order, license, permit, or authorization of, or registration, qualification, designation, declaration, or filing with, any federal, state, or local governmental authority or regulatory body is required on the part of the Company in connection with the valid execution, delivery, and performance of the Transaction Documents by the Company, or the offer, issuance, sale, and delivery of the shares of Series A Preferred Stock, except for:

(a) the filing of the Restated Certificate with the Secretary of State of the State of [Insert State of Incorporation], which [has been] [will be] filed on or prior to the Closing Date;

(b) such post-closing filings as may be required under applicable federal and state securities laws, including without limitation the filing of a Form D with the United States Securities and Exchange Commission and such state notice filings or applications for exemption as may be required or advisable under applicable state securities or "blue sky" laws; and

(c) [such other filings or notices as may be required and are identified herein — insert any additional governmental filings or consents, if applicable].

3.9 Capitalization.

[This opinion is optional. If agreed between investor counsel and company counsel, include a capitalization opinion confirming the authorized and outstanding capital stock of the Company as set forth in Section [__] of the Purchase Agreement and/or the Restated Certificate. This opinion is frequently negotiated in Series A transactions and may be narrowed or excluded depending on the preferences of the parties. Include only if required by the Purchase Agreement. If included, use the following template language:]

The authorized capital stock of the Company, immediately prior to the Closing Date, consists of [] shares of Common Stock, $[] par value per share, and [] shares of Preferred Stock, $[] par value per share, of which [] shares have been designated Series Seed Preferred Stock and [] shares have been designated Series A Preferred Stock. As of the Closing Date and immediately after giving effect to the transactions contemplated by the Purchase Agreement and the filing of the Restated Certificate, the issued and outstanding capital stock of the Company is as set forth on the Schedule of Investors attached to the Purchase Agreement and the capitalization table attached as Exhibit [__] to the Purchase Agreement. All issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable, and were issued in compliance with applicable federal and state securities laws and not in violation of any preemptive rights, rights of first refusal, or similar rights.

4. Qualifications, Limitations, and Exceptions

The foregoing opinions are subject to the following qualifications, limitations, and exceptions:

4.1 Enforceability Exceptions. The opinions expressed in Section 3.6 above with respect to the enforceability of the Transaction Documents are subject to and limited by (collectively, the "Enforceability Exceptions"):

(a) the effect of bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship, arrangement, fraudulent conveyance and transfer, and other similar laws now or hereafter in effect relating to or affecting the rights and remedies of creditors generally;

(b) the application of general principles of equity, including without limitation principles governing the availability of specific performance, injunctive relief, and other equitable remedies, and principles regarding good faith and fair dealing, reasonableness, materiality, unconscionability, and the discretion of the court before which any proceeding therefor may be brought (regardless of whether such enforceability is considered in a proceeding in equity or at law); and

(c) the effect of applicable law and public policy with respect to (i) the enforceability of provisions relating to indemnification, contribution, or exculpation (including without limitation those that purport to indemnify a party against liability for its own negligence or willful misconduct), (ii) the enforceability of fee-shifting and attorneys' fees provisions, (iii) the enforceability of non-competition, non-solicitation, and similar restrictive covenants, (iv) the enforceability of waivers of rights or defenses that are not waivable as a matter of law, and (v) the enforceability of provisions that purport to establish evidentiary standards, waive statutes of limitations, or effect waivers of broadly or vaguely stated rights.

4.2 Scope of Laws Covered. The opinions expressed herein are limited in all respects to the laws of the State of [Insert State of Incorporation], the laws of [Insert State of Principal Office, if different from the State of Incorporation], and the federal laws of the United States of America, in each case as currently in effect and as currently interpreted by the courts and governmental authorities of such jurisdictions. We express no opinion as to the laws of any other jurisdiction, including without limitation the laws of any foreign country, any other state of the United States, or any county, municipality, or other local jurisdiction. To the extent that any Transaction Document is governed by the laws of a jurisdiction other than those specified above, we have assumed for purposes of this opinion letter that such Transaction Document is governed by the laws of the State of [Insert State of Incorporation] and that such laws would be applied by a court of competent jurisdiction.

4.3 Securities Law Limitation. We express no opinion as to compliance with, or the availability of any exemption under, any federal or state securities, "blue sky," or broker-dealer laws, rules, or regulations, except as expressly set forth in Opinion 3.8 above. Without limiting the foregoing, we express no opinion as to the status of the shares of Series A Preferred Stock or the shares of Common Stock issuable upon conversion thereof under any federal or state securities laws or the applicability or effect of any such laws to the transactions contemplated by the Transaction Documents.

4.4 No Litigation Opinion. We express no opinion regarding any pending or threatened litigation, arbitration, administrative proceeding, governmental investigation, or other claim or dispute involving the Company or any of its officers, directors, or stockholders. Nothing in this opinion letter should be construed as expressing any view as to the likelihood of success of any such proceeding or the potential liability of the Company in connection therewith.

4.5 Tax Matters. We express no opinion regarding any federal, state, local, or foreign tax matters, including without limitation the tax consequences to the Company or any Investor of the transactions contemplated by the Transaction Documents, the characterization of the Series A Preferred Stock for tax purposes, or the effect of any tax laws on any of the opinions expressed herein.

4.6 intellectual Property. We express no opinion regarding the validity, enforceability, registrability, ownership, or scope of any patents, patent applications, trademarks, service marks, trade names, domain names, copyrights, trade secrets, licenses, or other intellectual property rights of the Company, or any infringement, misappropriation, or other violation by the Company of the intellectual property rights of any third party.

4.7 Additional Qualifications. [Insert any additional qualifications, limitations, or exceptions as agreed between investor counsel and company counsel, including but not limited to:

(a) limitations on the scope of the no-conflicts opinion (e.g., exclusion of certain types of contracts, regulatory approvals, or government contracts);

(b) qualifications regarding anti-dilution provisions, preemptive rights, or similar protective provisions in the Restated Certificate;

(c) qualifications regarding regulatory matters, including without limitation ERISA, export control, data privacy, environmental, healthcare, or financial services regulatory matters;

(d) qualifications regarding the enforceability of choice of law, choice of forum, or jury trial waiver provisions;

(e) qualifications regarding the effect of judicial economy, consolidation, or class action procedures on the enforcement of the Transaction Documents; and

(f) such other qualifications as may be customary for transactions of this type or required by the specific circumstances of the Company.]

5. Reliance and Other Matters

5.1 Reliance. This opinion letter is furnished to you, the addressees hereof, solely in connection with the closing of the transactions contemplated by the Purchase Agreement and is solely for your benefit. This opinion letter may not be relied upon by any other person or entity, or for any other purpose, without our prior written consent in each instance, except that [Insert names of co-investors or their counsel, if agreed, e.g., "each Investor listed on the Schedule of Investors to the Purchase Agreement who is not an addressee hereof"] may rely on this opinion letter as if it were separately addressed to them.

[Specify whether co-investor counsel (e.g., counsel to co-investors participating in the round) may rely on this opinion. If co-investor counsel is to receive reliance rights, include language such as: "In addition, [Insert name of co-investor counsel firm], as counsel to [Insert name(s) of co-investor(s)], may rely on this opinion letter solely in connection with its representation of such co-investor(s) in the transactions contemplated by the Purchase Agreement."]

This opinion letter may not be quoted, circulated, or published, in whole or in part, or filed with any governmental agency or other person, without our prior written consent, except as may be required by applicable law or regulation or pursuant to a valid subpoena or other compulsory legal process (provided that you give us prompt written notice of any such requirement to the extent legally permissible).

5.2 Date Limitation. This opinion letter is given as of the date hereof, and we express no opinion as to the effect of any event, fact, circumstance, or change in law occurring or becoming known to us after the date hereof. We undertake no obligation, and hereby disclaim any obligation, to advise you of any change in applicable law, or any change in the facts or circumstances upon which this opinion letter is based, that may come to our attention after the date hereof, or to update, revise, supplement, or withdraw any opinion expressed herein for any reason whatsoever.

5.3 Governing Law of Opinion. This opinion letter shall be governed by, and interpreted and construed in accordance with, the laws of the State of [Insert State], including without limitation the Legal Opinions Accord of the ABA Section of Business Law (or any successor thereto), to the extent applicable and not inconsistent with the express terms hereof.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

Very truly yours,

[INSERT FIRM NAME]

By: ________

Name: [Insert Name of Authorized Partner]

Title: [Partner / Member]

Date: [Closing Date]

Attachments

[Attach list of Transaction Documents reviewed, if not fully enumerated in Section 1 above. If the documents reviewed in Section 1 are comprehensive and complete, no additional attachment is necessary. However, if company counsel reviewed additional agreements, side letters, or ancillary documents not listed in Section 1, attach a complete list as Annex A hereto.]

[Attach any schedules cross-referenced in the opinions above, including but not limited to:]

• Schedule A — List of Material Agreements reviewed for purposes of the no-conflicts opinion set forth in Opinion 3.7(b) above [corresponding to Schedule [__] of the Purchase Agreement];

• Schedule B — Capitalization table as of the Closing Date [if a capitalization opinion is included pursuant to Opinion 3.9 above]; and

• Schedule C — List of jurisdictions in which the Company is qualified to do business as a foreign corporation [if a foreign qualification opinion is included pursuant to Opinion 3.1 above].

THIS FORM OF LEGAL OPINION IS AN EXHIBIT TO THE SERIES A PREFERRED STOCK PURCHASE AGREEMENT AND IS INTENDED TO SET FORTH THE AGREED-UPON SCOPE AND FORM OF THE LEGAL OPINION TO BE DELIVERED BY COMPANY COUNSEL AT CLOSING. THIS FORM IS NOT ITSELF A LEGAL OPINION AND DOES NOT CONSTITUTE LEGAL ADVICE. THE FINAL LEGAL OPINION WILL BE EXECUTED AND DELIVERED ON THE CLOSING DATE BY COMPANY COUNSEL IN SUBSTANTIALLY THE FORM SET FORTH HEREIN, WITH SUCH CHANGES AS MAY BE REASONABLY ACCEPTABLE TO INVESTOR COUNSEL.

EXHIBIT [__]
FORM OF LEGAL OPINION OF COMPANY COUNSEL
INSTRUCTIONS TO PREPARER: This is a blank form of legal opinion to be attached as an exhibit to the Series A Preferred Stock Purchase Agreement. All bracketed fields are to be completed at the time the opinion is delivered at closing. This form has been agreed upon by investor counsel and company counsel and reflects the negotiated scope of the legal opinion to be delivered as a condition to closing. All instructional annotations in brackets are for drafting guidance only and should be removed from the final executed opinion letter.
[INSERT FIRM NAME AND ADDRESS]
[FIRM LETTERHEAD]
[Closing Date]
[Insert Lead Investor Name] [Insert Lead Investor Address]
[Insert Co-Investor Name(s)] [Insert Co-Investor Address(es)]
[List each Investor set forth on the Schedule of Investors to the Purchase Agreement. If investors are numerous, this opinion may be addressed to the Lead Investor with an express statement that each additional Investor listed on the Schedule of Investors may rely on this opinion as if it were separately addressed to such Investor. See Section 5.1 below for reliance language.]
Re: Series A Preferred Stock Financing of [Insert Company Name]
Ladies and Gentlemen:
We have acted as counsel to [Insert Company Name], a [Insert State] corporation (the "Company"), in connection with the transactions contemplated by the Series A Preferred Stock Purchase Agreement, dated as of [Closing Date] (the "Purchase Agreement"), by and among the Company and the investors listed on the Schedule of Investors attached thereto (each, an "Investor" and collectively, the "Investors"), the Amended and Restated Certificate of Incorporation of the Company (the "Restated Certificate"), the Investors' Rights Agreement, dated as of [Closing Date] (the "Investors' Rights Agreement"), the Right of First Refusal and Co-Sale Agreement, dated as of [Closing Date] (the "ROFR/Co-Sale Agreement"), and the Voting Agreement, dated as of [Closing Date] (the "Voting Agreement" and, together with the Purchase Agreement, the Restated Certificate, the Investors' Rights Agreement, and the ROFR/Co-Sale Agreement, the "Transaction Documents").
This opinion letter is delivered to you pursuant to Section [__] of the Purchase Agreement as a condition to the obligations of the Investors to consummate the purchase and sale of shares of Series A Preferred Stock of the Company at the closing of the transactions contemplated by the Purchase Agreement. [Insert internal cross-reference to the specific SPA section requiring delivery of this opinion, e.g., "Section 4.1(g)" or "Section 5.4."]
Except as otherwise defined herein, capitalized terms used but not defined in this opinion letter have the meanings ascribed to them in the Purchase Agreement.
1. Documents and Items Reviewed
In rendering the opinions expressed below, we have examined originals or copies of the following documents and such other documents, records, certificates, and instruments as we have deemed necessary or appropriate for purposes of the opinions expressed herein:
(a) The Purchase Agreement, including all Exhibits and Schedules thereto;
(b) The Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of the State of [Insert State] on or about the Closing Date (the "Restated Certificate");
(c) The Bylaws of the Company, as currently in effect (the "Bylaws");
(d) The Investors' Rights Agreement, dated as of [Closing Date], by and among the Company, the Investors, and the other parties named therein;
(e) The Right of First Refusal and Co-Sale Agreement, dated as of [Closing Date], by and among the Company, the Investors, and the other parties named therein;
(f) The Voting Agreement, dated as of [Closing Date], by and among the Company, the Investors, and the other parties named therein;
(g) [Insert any Management Rights Letters between the Company and one or more Investors, if applicable];
(h) Resolutions of the Board of Directors of the Company adopted by unanimous written consent dated [Insert Date], approving the Transaction Documents and the transactions contemplated thereby, including the authorization and issuance of the shares of Series A Preferred Stock and the reservation of shares of Common Stock issuable upon conversion thereof (the "Board Resolutions");
(i) Resolutions of the stockholders of the Company adopted by written consent dated [Insert Date], approving the Restated Certificate and such other matters as were submitted for stockholder approval in connection with the transactions contemplated by the Transaction Documents (the "Stockholder Resolutions");
(j) A certificate of good standing (or certificate of status or equivalent) of the Company issued by the Secretary of State of the State of [Insert State of Incorporation], dated on or about the Closing Date;
(k) A certificate of good standing (or equivalent) of the Company issued by the Secretary of the Commonwealth of [Insert State of Qualification], dated on or about the Closing Date [if applicable — include only if the Company is qualified to do business as a foreign corporation in one or more jurisdictions and a foreign qualification opinion has been agreed upon];
(l) A certificate of an officer of the Company, dated as of the Closing Date, as to certain factual matters relevant to the opinions expressed herein (the "Officer's Certificate"); and
(m) Such other documents, records, corporate minutes, certificates of public officials, and instruments as we have deemed necessary or appropriate as a basis for the opinions expressed herein.
The documents listed in clauses (a) through (f) above are collectively referred to herein as the "Transaction Documents."
2. Assumptions
In rendering the opinions expressed below, we have assumed, without independent investigation or verification, and with your consent and concurrence, the following:
(a) The genuineness of all signatures on all documents and instruments reviewed by us in connection with this opinion letter.
(b) The authenticity and completeness of all documents submitted to us as originals and the conformity to authentic originals of all documents submitted to us as copies (whether certified, conformed, photostatic, electronic, or otherwise identified as copies).
(c) The legal capacity of all natural persons who have executed any of the documents or instruments reviewed by us.
(d) That each party to the Transaction Documents (other than the Company) has been duly organized or formed, is validly existing, and is in good standing under the laws of its respective jurisdiction of organization or formation.
(e) That each party to the Transaction Documents (other than the Company) has the requisite corporate, limited liability company, partnership, or other organizational power and authority to execute, deliver, and perform its obligations under the Transaction Documents to which it is a party.
(f) That the Transaction Documents have been duly authorized by all necessary corporate, limited liability company, partnership, or other organizational action on the part of each party thereto (other than the Company), and have been duly executed and delivered by each such party, and constitute the legal, valid, and binding obligations of each such party, enforceable against each such party in accordance with their respective terms.
(g) That the representations and warranties of each Investor set forth in the Purchase Agreement are true, correct, and complete in all respects as of the date hereof.
(h) That the offering, sale, and issuance of the shares of Series A Preferred Stock (and the shares of Common Stock issuable upon conversion thereof) are exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2) thereof and/or Regulation D promulgated thereunder, and from the registration or qualification requirements of applicable state securities or "blue sky" laws, in each case in reliance upon the accuracy and completeness of the representations and warranties of the Investors set forth in the Purchase Agreement.
(i) [Insert any additional assumptions as negotiated between investor counsel and company counsel, including but not limited to assumptions regarding the accuracy of the Officer's Certificate, the completeness of the corporate records provided to counsel, or the absence of oral modifications to any Transaction Documents.]
We have also relied, to the extent we have deemed appropriate and without independent investigation, upon the Officer's Certificate and certificates of public officials as to certain matters of fact relevant to the opinions expressed herein. We have made no independent investigation or verification of such facts and do not assume responsibility for the accuracy or completeness thereof. Furthermore, we have assumed that the Transaction Documents accurately reflect the mutual understanding and agreement of the parties thereto with respect to the subject matter thereof and that there are no oral or written statements, agreements, understandings, or course of dealing that modify, supplement, or contradict the terms of the Transaction Documents.
3. Opinions
Based on and subject to the foregoing and the qualifications, limitations, and exceptions set forth in Section 4 below, we are of the opinion that:
3.1 Due Organization and Good Standing. The Company is a corporation duly incorporated, validly existing, and in good standing under the laws of the State of [Insert State of Incorporation]. [If applicable, include opinion regarding qualification in foreign jurisdictions, e.g.: "The Company is duly qualified or licensed to do business as a foreign corporation and is in good standing in the Commonwealth of [Insert State], which is the only jurisdiction in which such qualification or licensing is required by the nature of the business conducted by the Company or the character or location of the properties owned, leased, or operated by it, except where the failure to be so qualified or licensed would not have a material adverse effect on the Company."]
3.2 Corporate Power and Authority. The Company has the requisite corporate power and authority to (a) own, lease, and operate its properties and assets as currently owned, leased, and operated, (b) conduct its business as presently conducted and as proposed to be conducted, (c) execute and deliver each of the Transaction Documents to which it is a party, and (d) perform and comply with its obligations under each of the Transaction Documents to which it is a party.
3.3 Authorization. The execution, delivery, and performance by the Company of each of the Transaction Documents to which it is a party, and the consummation by the Company of the transactions contemplated thereby, including without limitation the authorization, issuance, and sale of the shares of Series A Preferred Stock pursuant to the Purchase Agreement and the reservation for issuance of the shares of Common Stock issuable upon conversion of the Series A Preferred Stock, have been duly authorized by all necessary corporate action on the part of the Company, including the approval of the Company's Board of Directors (as evidenced by the Board Resolutions) and, to the extent required by applicable law or the Company's organizational documents, the approval of the Company's stockholders (as evidenced by the Stockholder Resolutions). No other corporate proceedings on the part of the Company or its stockholders are necessary to authorize the execution, delivery, and performance of the Transaction Documents or the consummation of the transactions contemplated thereby.
3.4 Valid Issuance of Series A Preferred Stock. The shares of Series A Preferred Stock being issued and sold to the Investors pursuant to the Purchase Agreement, when issued and delivered against payment of the consideration therefor in accordance with the terms of the Purchase Agreement and the Restated Certificate, will be validly issued, fully paid, and nonassessable, and will be free and clear of all liens, encumbrances, and restrictions, except for restrictions on transfer imposed by the Transaction Documents, the Restated Certificate, applicable securities laws, and any liens created by or through the Investors themselves.
[If convertible note conversion shares are being issued as Series A Preferred Stock in connection with the transactions contemplated by the Purchase Agreement, include the following additional sentence: "The shares of Series A Preferred Stock being issued upon conversion of the convertible promissory notes described in Section [__] of the Purchase Agreement (or in the recitals thereto), when issued in accordance with the terms of such convertible promissory notes and the Restated Certificate, will be validly issued, fully paid, and nonassessable."]
3.5 Reservation of Common Stock. The shares of Common Stock of the Company issuable upon conversion of the Series A Preferred Stock have been duly and validly reserved for issuance by the Company, and when issued upon conversion of the Series A Preferred Stock in accordance with the terms of the Restated Certificate, such shares of Common Stock will be validly issued, fully paid, and nonassessable, and will be free and clear of all liens, encumbrances, and restrictions, except for restrictions on transfer imposed by the Transaction Documents, the Restated Certificate, applicable securities laws, and any liens created by or through the holders thereof.
3.6 Enforceability. Each of the Transaction Documents to which the Company is a party constitutes the legal, valid, and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, subject to the Enforceability Exceptions (as defined in Section 4.1 below).
3.7 No Conflicts. The execution, delivery, and performance by the Company of the Transaction Documents to which it is a party, and the consummation by the Company of the transactions contemplated thereby (including the issuance and sale of the shares of Series A Preferred Stock and the reservation for issuance of the shares of Common Stock issuable upon conversion thereof), do not and will not:
(a) violate, conflict with, or result in a breach of any provision of, or constitute a default under, the Restated Certificate or the Bylaws of the Company;
(b) result in any violation of, or constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under, or give rise to a right of termination, cancellation, amendment, or acceleration of any obligation or loss of any material benefit under, any material agreement, contract, lease, license, instrument, note, bond, mortgage, indenture, or other obligation to which the Company is a party or by which any of its properties or assets are bound, as listed on Schedule [__] to the Purchase Agreement (the "Material Agreements"); or
(c) result in any violation of any statute, rule, regulation, order, judgment, or decree of the State of [Insert State of Incorporation] applicable to the Company or any of its properties or assets.
[Scope of no-conflicts opinion limited to laws of [Insert State of Incorporation] and federal laws of the United States — include express limitation in qualifications section. See Section 4.2 below. The scope of the no-conflicts opinion with respect to Material Agreements (clause (b)) is limited to those agreements listed on Schedule [__] to the Purchase Agreement and reviewed by this firm. Counsel has not undertaken an independent search for undisclosed agreements.]
3.8 Governmental Consents. No consent, approval, order, license, permit, or authorization of, or registration, qualification, designation, declaration, or filing with, any federal, state, or local governmental authority or regulatory body is required on the part of the Company in connection with the valid execution, delivery, and performance of the Transaction Documents by the Company, or the offer, issuance, sale, and delivery of the shares of Series A Preferred Stock, except for:
(a) the filing of the Restated Certificate with the Secretary of State of the State of [Insert State of Incorporation], which [has been] [will be] filed on or prior to the Closing Date;
(b) such post-closing filings as may be required under applicable federal and state securities laws, including without limitation the filing of a Form D with the United States Securities and Exchange Commission and such state notice filings or applications for exemption as may be required or advisable under applicable state securities or "blue sky" laws; and
(c) [such other filings or notices as may be required and are identified herein — insert any additional governmental filings or consents, if applicable].
3.9 Capitalization.
[This opinion is optional. If agreed between investor counsel and company counsel, include a capitalization opinion confirming the authorized and outstanding capital stock of the Company as set forth in Section [__] of the Purchase Agreement and/or the Restated Certificate. This opinion is frequently negotiated in Series A transactions and may be narrowed or excluded depending on the preferences of the parties. Include only if required by the Purchase Agreement. If included, use the following template language:]
The authorized capital stock of the Company, immediately prior to the Closing Date, consists of [] shares of Common Stock, $[] par value per share, and [] shares of Preferred Stock, $[] par value per share, of which [] shares have been designated Series Seed Preferred Stock and [] shares have been designated Series A Preferred Stock. As of the Closing Date and immediately after giving effect to the transactions contemplated by the Purchase Agreement and the filing of the Restated Certificate, the issued and outstanding capital stock of the Company is as set forth on the Schedule of Investors attached to the Purchase Agreement and the capitalization table attached as Exhibit [__] to the Purchase Agreement. All issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and nonassessable, and were issued in compliance with applicable federal and state securities laws and not in violation of any preemptive rights, rights of first refusal, or similar rights.
4. Qualifications, Limitations, and Exceptions
The foregoing opinions are subject to the following qualifications, limitations, and exceptions:
4.1 Enforceability Exceptions. The opinions expressed in Section 3.6 above with respect to the enforceability of the Transaction Documents are subject to and limited by (collectively, the "Enforceability Exceptions"):
(a) the effect of bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship, arrangement, fraudulent conveyance and transfer, and other similar laws now or hereafter in effect relating to or affecting the rights and remedies of creditors generally;
(b) the application of general principles of equity, including without limitation principles governing the availability of specific performance, injunctive relief, and other equitable remedies, and principles regarding good faith and fair dealing, reasonableness, materiality, unconscionability, and the discretion of the court before which any proceeding therefor may be brought (regardless of whether such enforceability is considered in a proceeding in equity or at law); and
(c) the effect of applicable law and public policy with respect to (i) the enforceability of provisions relating to indemnification, contribution, or exculpation (including without limitation those that purport to indemnify a party against liability for its own negligence or willful misconduct), (ii) the enforceability of fee-shifting and attorneys' fees provisions, (iii) the enforceability of non-competition, non-solicitation, and similar restrictive covenants, (iv) the enforceability of waivers of rights or defenses that are not waivable as a matter of law, and (v) the enforceability of provisions that purport to establish evidentiary standards, waive statutes of limitations, or effect waivers of broadly or vaguely stated rights.
4.2 Scope of Laws Covered. The opinions expressed herein are limited in all respects to the laws of the State of [Insert State of Incorporation], the laws of [Insert State of Principal Office, if different from the State of Incorporation], and the federal laws of the United States of America, in each case as currently in effect and as currently interpreted by the courts and governmental authorities of such jurisdictions. We express no opinion as to the laws of any other jurisdiction, including without limitation the laws of any foreign country, any other state of the United States, or any county, municipality, or other local jurisdiction. To the extent that any Transaction Document is governed by the laws of a jurisdiction other than those specified above, we have assumed for purposes of this opinion letter that such Transaction Document is governed by the laws of the State of [Insert State of Incorporation] and that such laws would be applied by a court of competent jurisdiction.
4.3 Securities Law Limitation. We express no opinion as to compliance with, or the availability of any exemption under, any federal or state securities, "blue sky," or broker-dealer laws, rules, or regulations, except as expressly set forth in Opinion 3.8 above. Without limiting the foregoing, we express no opinion as to the status of the shares of Series A Preferred Stock or the shares of Common Stock issuable upon conversion thereof under any federal or state securities laws or the applicability or effect of any such laws to the transactions contemplated by the Transaction Documents.
4.4 No Litigation Opinion. We express no opinion regarding any pending or threatened litigation, arbitration, administrative proceeding, governmental investigation, or other claim or dispute involving the Company or any of its officers, directors, or stockholders. Nothing in this opinion letter should be construed as expressing any view as to the likelihood of success of any such proceeding or the potential liability of the Company in connection therewith.
4.5 Tax Matters. We express no opinion regarding any federal, state, local, or foreign tax matters, including without limitation the tax consequences to the Company or any Investor of the transactions contemplated by the Transaction Documents, the characterization of the Series A Preferred Stock for tax purposes, or the effect of any tax laws on any of the opinions expressed herein.
4.6 intellectual Property. We express no opinion regarding the validity, enforceability, registrability, ownership, or scope of any patents, patent applications, trademarks, service marks, trade names, domain names, copyrights, trade secrets, licenses, or other intellectual property rights of the Company, or any infringement, misappropriation, or other violation by the Company of the intellectual property rights of any third party.
4.7 Additional Qualifications. [Insert any additional qualifications, limitations, or exceptions as agreed between investor counsel and company counsel, including but not limited to:
(a) limitations on the scope of the no-conflicts opinion (e.g., exclusion of certain types of contracts, regulatory approvals, or government contracts);
(b) qualifications regarding anti-dilution provisions, preemptive rights, or similar protective provisions in the Restated Certificate;
(c) qualifications regarding regulatory matters, including without limitation ERISA, export control, data privacy, environmental, healthcare, or financial services regulatory matters;
(d) qualifications regarding the enforceability of choice of law, choice of forum, or jury trial waiver provisions;
(e) qualifications regarding the effect of judicial economy, consolidation, or class action procedures on the enforcement of the Transaction Documents; and
(f) such other qualifications as may be customary for transactions of this type or required by the specific circumstances of the Company.]
5. Reliance and Other Matters
5.1 Reliance. This opinion letter is furnished to you, the addressees hereof, solely in connection with the closing of the transactions contemplated by the Purchase Agreement and is solely for your benefit. This opinion letter may not be relied upon by any other person or entity, or for any other purpose, without our prior written consent in each instance, except that [Insert names of co-investors or their counsel, if agreed, e.g., "each Investor listed on the Schedule of Investors to the Purchase Agreement who is not an addressee hereof"] may rely on this opinion letter as if it were separately addressed to them.
[Specify whether co-investor counsel (e.g., counsel to co-investors participating in the round) may rely on this opinion. If co-investor counsel is to receive reliance rights, include language such as: "In addition, [Insert name of co-investor counsel firm], as counsel to [Insert name(s) of co-investor(s)], may rely on this opinion letter solely in connection with its representation of such co-investor(s) in the transactions contemplated by the Purchase Agreement."]
This opinion letter may not be quoted, circulated, or published, in whole or in part, or filed with any governmental agency or other person, without our prior written consent, except as may be required by applicable law or regulation or pursuant to a valid subpoena or other compulsory legal process (provided that you give us prompt written notice of any such requirement to the extent legally permissible).
5.2 Date Limitation. This opinion letter is given as of the date hereof, and we express no opinion as to the effect of any event, fact, circumstance, or change in law occurring or becoming known to us after the date hereof. We undertake no obligation, and hereby disclaim any obligation, to advise you of any change in applicable law, or any change in the facts or circumstances upon which this opinion letter is based, that may come to our attention after the date hereof, or to update, revise, supplement, or withdraw any opinion expressed herein for any reason whatsoever.
5.3 Governing Law of Opinion. This opinion letter shall be governed by, and interpreted and construed in accordance with, the laws of the State of [Insert State], including without limitation the Legal Opinions Accord of the ABA Section of Business Law (or any successor thereto), to the extent applicable and not inconsistent with the express terms hereof.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
Very truly yours,
[INSERT FIRM NAME]
By: ________
Name: [Insert Name of Authorized Partner]
Title: [Partner / Member]
Date: [Closing Date]
Attachments
[Attach list of Transaction Documents reviewed, if not fully enumerated in Section 1 above. If the documents reviewed in Section 1 are comprehensive and complete, no additional attachment is necessary. However, if company counsel reviewed additional agreements, side letters, or ancillary documents not listed in Section 1, attach a complete list as Annex A hereto.]
[Attach any schedules cross-referenced in the opinions above, including but not limited to:]
•  Schedule A — List of Material Agreements reviewed for purposes of the no-conflicts opinion set forth in Opinion 3.7(b) above [corresponding to Schedule [__] of the Purchase Agreement];
•  Schedule B — Capitalization table as of the Closing Date [if a capitalization opinion is included pursuant to Opinion 3.9 above]; and
•  Schedule C — List of jurisdictions in which the Company is qualified to do business as a foreign corporation [if a foreign qualification opinion is included pursuant to Opinion 3.1 above].
THIS FORM OF LEGAL OPINION IS AN EXHIBIT TO THE SERIES A PREFERRED STOCK PURCHASE AGREEMENT AND IS INTENDED TO SET FORTH THE AGREED-UPON SCOPE AND FORM OF THE LEGAL OPINION TO BE DELIVERED BY COMPANY COUNSEL AT CLOSING. THIS FORM IS NOT ITSELF A LEGAL OPINION AND DOES NOT CONSTITUTE LEGAL ADVICE. THE FINAL LEGAL OPINION WILL BE EXECUTED AND DELIVERED ON THE CLOSING DATE BY COMPANY COUNSEL IN SUBSTANTIALLY THE FORM SET FORTH HEREIN, WITH SUCH CHANGES AS MAY BE REASONABLY ACCEPTABLE TO INVESTOR COUNSEL.

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FORM OF LEGAL OPINION OF COMPANY COUNSEL

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