WHITFIELD GRAVES & MORROW LLP
Attorneys at Law
1875 K Street NW, Suite 800 Washington, DC 20006
Telephone: (202) 448-7200 Facsimile: (202) 448-7201 www.wgmlaw.com
June 9, 2023
Northgate Americas, Inc. 1700 Market Street, Suite 2400 Philadelphia, PA 19103
Calderwood & Harkness LLP 600 Lexington Avenue, 30th Floor New York, NY 10022
Re: Legal Opinion — Master Services Agreement dated June 9, 2023, by and between Cedarpoint Systems Integration, Inc. and Northgate Americas, Inc.
Ladies and Gentlemen:
We have acted as counsel to Cedarpoint Systems Integration, Inc., a Delaware corporation ("Cedarpoint" or the "Company"), headquartered at 11400 Commerce Park Drive, Suite 600, Reston, Virginia 20191, in connection with the execution and delivery of that certain Master Services Agreement dated as of June 9, 2023 (the "MSA"), by and between Cedarpoint Systems Integration, Inc., as Service Provider and Licensor, and Northgate Americas, Inc., a Delaware corporation ("Northgate" or the "Customer"), as Customer and Licensee. This opinion letter (this "Opinion Letter") is being delivered to you pursuant to Section 9.2 of the MSA as a condition to the closing of the transactions contemplated thereby. The MSA provides for a total contract value of Seventy-Five Million Dollars ($75,000,000) over an initial term of five (5) years, commencing on June 9, 2023 and expiring on June 8, 2028. The Transaction Documents (as defined below) are governed by the laws of the State of New York.
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the MSA unless the context otherwise requires.
1. Documents Examined
In connection with rendering the opinions expressed herein, we have examined executed originals or copies, certified or otherwise identified to our satisfaction, of the following documents (collectively, the "Reviewed Documents"):
(a) Master Services Agreement dated as of June 9, 2023, by and between Cedarpoint Systems Integration, Inc. and Northgate Americas, Inc., together with all exhibits attached thereto (Exhibits A through F) and all schedules appended thereto (Schedules 1 through 3) (the "MSA");
(b) Escrow Agreement dated as of June 9, 2023, by and among Cedarpoint Systems Integration, Inc., Northgate Americas, Inc., and Dravello National Bank, a national banking association, as escrow agent (the "Escrow Agent"), relating to escrow account reference number FNB-ESC-2023-07742 (the "Escrow Agreement");
(c) Transition Services Side Letter dated as of June 9, 2023, by and between Cedarpoint Systems Integration, Inc. and Northgate Americas, Inc., relating to the migration from the legacy multiprotocol label switching ("MPLS") infrastructure operated by Greystone Halcyon Software (the "Transition Services Side Letter");
(d) Mutual Non-Disclosure Agreement dated as of February 22, 2023, by and between Cedarpoint Systems Integration, Inc. and Northgate Americas, Inc. (the "NDA");
(e) The Certificate of Incorporation of Cedarpoint Systems Integration, Inc., as filed with the Secretary of State of the State of Delaware on or about the date of the Company's original incorporation, together with all amendments, restatements, and certificates of amendment thereto through the date hereof (collectively, the "Charter");
(f) The Bylaws of Cedarpoint Systems Integration, Inc., as currently in effect, including all amendments thereto adopted through the date hereof (the "Bylaws");
(g) Resolutions of the Board of Directors of Cedarpoint Systems Integration, Inc., adopted by written consent or at duly convened meetings held on or prior to June 9, 2023, authorizing the execution, delivery, and performance by Cedarpoint of each of the MSA, the Escrow Agreement, and the Transition Services Side Letter (collectively, the "Board Resolutions");
(h) A Certificate of Good Standing with respect to Cedarpoint Systems Integration, Inc., issued by the Secretary of State of the State of Delaware, dated as of a recent date prior to the date hereof (the "Good Standing Certificate");
(i) An Officer's Certificate of Rajiv Sundaram, in his capacity as Chief Executive Officer of Cedarpoint Systems Integration, Inc., dated as of June 9, 2023, certifying as to certain factual matters relevant to the opinions expressed herein (the "Officer's Certificate");
(j) A Secretary's Certificate of Cedarpoint Systems Integration, Inc., dated as of June 9, 2023, certifying as to the authenticity and completeness of the Charter, the Bylaws, and the Board Resolutions, and attaching incumbency certificates for Rajiv Sundaram (Chief Executive Officer), Philip Hargreaves (Chief Financial Officer), and Nadia Okafor (General Counsel) (the "Secretary's Certificate"); and
(k) Such other documents, records, certificates, instruments, and matters of law as we have deemed necessary or appropriate for the purposes of rendering the opinions expressed in this Opinion Letter.
As used herein, the term "Transaction Documents" refers collectively to the MSA, the Escrow Agreement, and the Transition Services Side Letter. The NDA, while reviewed as part of our due diligence, is not a Transaction Document for purposes of this Opinion Letter.
2. Assumptions
The opinions expressed herein are based upon and subject to the following assumptions, each of which we have made without independent investigation or verification:
(a) The genuineness of all signatures on all documents reviewed by us, other than the signatures of officers, directors, and authorized representatives of Cedarpoint Systems Integration, Inc.
(b) The authenticity, accuracy, 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 reproduced.
(c) The legal capacity and authority of all natural persons who have executed or delivered any of the documents reviewed by us, and the legal competence of all such natural persons at the time of such execution and delivery.
(d) Northgate Americas, Inc. is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with its registered office located at c/o Calvert Corporate Services, Inc., 1209 Orange Street, Wilmington, Delaware 19801, and possesses all requisite corporate power and authority to conduct its business as presently conducted.
(e) Northgate Americas, Inc. has the full corporate power and authority to execute, deliver, and perform its obligations under each of the Transaction Documents, and that all necessary corporate action on the part of Northgate Americas, Inc. (including any required approval by its board of directors and, if applicable, its stockholders) has been duly taken to authorize the execution, delivery, and performance of each of the Transaction Documents.
(f) Each Transaction Document constitutes the legal, valid, and binding obligation of Northgate Americas, Inc., enforceable against Northgate Americas, Inc. in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights generally and subject to general principles of equity.
(g) Dravello National Bank is a national banking association duly organized and validly existing under the laws of the United States, and possesses all requisite power and authority to act as escrow agent under the Escrow Agreement, including the authority to open, maintain, and administer escrow account FNB-ESC-2023-07742 in accordance with the terms of the Escrow Agreement.
(h) All factual representations and warranties made by Cedarpoint in the Transaction Documents and in the Officer's Certificate dated June 9, 2023 are true, correct, and complete in all material respects as of the date hereof, and no event has occurred that would render any such representation or warranty inaccurate or misleading.
(i) Each of the Transaction Documents has been duly executed and delivered on behalf of all parties thereto other than Cedarpoint, and each such party has complied with all conditions precedent to its obligations thereunder.
We have made no independent investigation of the foregoing assumptions and express no opinion with respect to the accuracy or completeness thereof. If any of the foregoing assumptions is or proves to be incorrect, the opinions expressed herein may be adversely affected and should not be relied upon.
3. Opinions
Based upon the foregoing and subject to the assumptions, limitations, and qualifications set forth herein, we are of the opinion that:
3.1 Due Organization and Good Standing
Cedarpoint Systems Integration, Inc. is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Company was originally incorporated under the Delaware General Corporation Law in 2009 by its founders, Rajiv Sundaram and Teresa Cho, and has continuously maintained its corporate existence in good standing with the Secretary of State of the State of Delaware since the date of its incorporation. The Company's registered office in the State of Delaware is located at c/o Calvert Corporate Services, Inc., 1209 Orange Street, Wilmington, Delaware 19801. The Company's federal employer identification number is 52-4178503.
Cedarpoint has the corporate power and authority to own, lease, and operate its properties and assets, and to conduct its business as presently conducted, including, without limitation, the provision of managed network infrastructure services, software-defined wide area network ("SD-WAN") deployment and management services, network monitoring and remediation services, and cybersecurity services, and the licensing of its proprietary ArcMesh software platform (currently at version 4.2) to enterprise customers on terms consistent with those set forth in the MSA.
3.2 Corporate Power and Authority
Cedarpoint has full corporate power and authority to execute, deliver, and perform its obligations under each of the Transaction Documents, including, without limitation:
(a) The MSA, including the grant of a non-exclusive, non-transferable license to Northgate to use the ArcMesh platform (version 4.2) and the provision of managed network services across a network topology encompassing approximately three hundred forty (340) nodes deployed in twenty-eight (28) states within the United States and three (3) provinces within Canada, together with all related service level commitments, support obligations, professional services, and deliverables described in the MSA and its exhibits and schedules;
(b) The Escrow Agreement, including the obligation to fund annual wind-down escrow deposits in the amount of Seven Hundred Fifty Thousand Dollars ($750,000) per year, resulting in an aggregate escrow cap of Three Million Seven Hundred Fifty Thousand Dollars ($3,750,000) over the five-year initial term of the MSA, to be held by Dravello National Bank, as Escrow Agent, in escrow account FNB-ESC-2023-07742, subject to the terms and conditions of the Escrow Agreement, including release conditions, investment parameters, and dispute resolution procedures set forth therein; and
(c) The Transition Services Side Letter, including the Company's obligation to design, implement, and manage a three-phase migration of the Customer's network infrastructure from the legacy MPLS infrastructure currently operated by Greystone Halcyon Software to the ArcMesh-based managed network architecture over an eighteen (18) month transition period, including cutover planning, parallel operations, circuit decommissioning, and post-migration validation and support as described in the Transition Services Side Letter.
3.3 Due Authorization
The execution, delivery, and performance by Cedarpoint of each of the Transaction Documents have been duly authorized by all necessary corporate action on the part of Cedarpoint. The Board of Directors of Cedarpoint has duly adopted written resolutions on or prior to June 9, 2023, approving the execution, delivery, and performance by Cedarpoint of each of the Transaction Documents and authorizing the appropriate officers of the Company to execute and deliver the Transaction Documents on behalf of the Company and to take all actions necessary or desirable to consummate the transactions contemplated thereby. We have reviewed the Board Resolutions and have determined them to be in full force and effect and not to have been amended, modified, or rescinded as of the date hereof.
Each Transaction Document has been duly executed and delivered by authorized officers of Cedarpoint. Specifically, the MSA has been executed by Rajiv Sundaram in his capacity as Chief Executive Officer of the Company, who has been duly authorized by the Board Resolutions to execute the MSA on behalf of the Company. No further action by the stockholders of Cedarpoint is required under the Delaware General Corporation Law, the Charter, or the Bylaws to authorize the execution, delivery, and performance by Cedarpoint of the Transaction Documents.
In rendering this opinion, we have reviewed the incumbency certificates attached to the Secretary's Certificate, which confirm the identity, authority, and specimen signatures of Rajiv Sundaram (Chief Executive Officer), Philip Hargreaves (Chief Financial Officer), and Nadia Okafor (General Counsel) of the Company, and we have confirmed that each such individual held his or her respective office as of the date of execution and delivery of the Transaction Documents.
3.4 Enforceability. Each Transaction Document constitutes the legal, valid, and binding obligation of Cedarpoint, enforceable against Cedarpoint in accordance with its terms, subject, however, to the following customary qualifications and exceptions:
(i) The enforceability of the Transaction Documents may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer, and other similar laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally.
(ii) The enforceability of the Transaction Documents is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including, without limitation, the discretion of a court of competent jurisdiction in granting specific performance, injunctive relief, or other equitable remedies, and the possible unavailability of such remedies under certain circumstances.
(iii) The enforceability of provisions in the Transaction Documents relating to indemnification and contribution may be limited by applicable law and public policy considerations, including, without limitation, applicable provisions of federal and state securities laws. We note that the indemnification framework set forth in the MSA provides for, among other things, an aggregate liability cap for Cedarpoint equal to two hundred percent (200%) of the trailing twelve (12) month fees paid or payable by the Customer, together with uncapped carve-out categories for claims arising from intellectual property infringement, willful misconduct, data breach, and breach of confidentiality obligations, and we express no opinion as to whether a court would enforce such provisions as drafted in all circumstances.
(iv) The enforceability of provisions in the Transaction Documents that purport to waive rights broadly, establish evidentiary standards, fix the measure of damages, or limit or exclude remedies otherwise available to a party may be limited by applicable statutes, regulations, or judicial decisions.
(v) We express no opinion as to the enforceability of the choice of New York law as the governing law of the Transaction Documents to the extent that such choice of law contravenes a fundamental public policy of any other jurisdiction that has a materially greater interest in the determination of a particular issue or in the matter in dispute, or to the extent that such choice of law is challenged in a jurisdiction other than the State of New York.
(vi) We express no opinion as to the enforceability of any provision in the Transaction Documents purporting to establish liquidated damages to the extent that a court of competent jurisdiction determines that such provision constitutes a penalty or is otherwise unreasonable or disproportionate to the actual harm suffered, including, without limitation, any service level credit provisions or early termination fee provisions set forth in the MSA or its exhibits and schedules.
3.5 No Violation of Charter Documents
The execution, delivery, and performance by Cedarpoint of each of the Transaction Documents do not and will not:
(a) Violate, conflict with, or result in a breach of any provision of the Certificate of Incorporation or the Bylaws of Cedarpoint, each as currently in effect;
(b) Result in a breach of, or constitute a default (or an event that, with the giving of notice or the lapse of time or both, would constitute a default) under, any material agreement, indenture, mortgage, deed of trust, loan agreement, credit facility, note, bond, lease, license, or other instrument or obligation to which Cedarpoint is a party or by which Cedarpoint or any of its properties or assets may be bound, including, without limitation, any agreements, investors' rights agreements, stockholders' agreements, registration rights agreements, voting agreements, or other arrangements with Ridgeline Capital Partners, LP, a Delaware limited partnership (as the holder of approximately sixty-two percent (62%) of the outstanding voting equity of Cedarpoint), to the extent that such agreements and instruments have been made available to us for review in connection with the preparation of this Opinion Letter; or
(c) Result in the creation or imposition of any lien, pledge, security interest, charge, claim, or other encumbrance of any kind whatsoever upon any property, asset, or right of Cedarpoint, whether now owned or hereafter acquired.
3.6 No Violation of Applicable Law
The execution, delivery, and performance by Cedarpoint of each of the Transaction Documents do not and will not violate any applicable statute, rule, regulation, order, writ, judgment, injunction, or decree of any court, arbitrator, or governmental or regulatory authority or body of the State of Delaware or the federal laws of the United States of America, in each case to the extent applicable to Cedarpoint and its business as presently conducted.
We note, however, that the foregoing opinion is limited solely to the laws of the State of Delaware and the federal laws of the United States of America. We express no opinion whatsoever as to the laws of any other jurisdiction, including, without limitation: (i) the laws of the State of New York, which govern the Transaction Documents; (ii) the federal laws of Canada or the laws of any province or territory of Canada, including the Province of Manitoba (where Cedarpoint operates a network operations center in Winnipeg); (iii) the laws of England and Wales or the United Kingdom; or (iv) the laws of any other state, territory, foreign country, or other jurisdiction. We recommend that the addressees hereof obtain the advice of counsel duly qualified in each such other jurisdiction with respect to the applicability and effect of any laws thereof to the Transaction Documents and the transactions contemplated thereby.
3.7 No Consents Required
No consent, approval, authorization, order, filing, registration, or qualification of or with any court, governmental or regulatory agency or body, or other authority of the State of Delaware or the United States of America is required for the valid execution, delivery, and performance by Cedarpoint of each of the Transaction Documents, or for the consummation by Cedarpoint of the transactions contemplated thereby, except for such consents, approvals, authorizations, orders, filings, registrations, or qualifications as have already been obtained or made on or prior to the date hereof, are in full force and effect, and are not subject to any pending appeal, revocation, suspension, or modification.
4. Limitations and Qualifications
The opinions expressed herein are subject to the following additional limitations and qualifications:
(a) Scope of Legal Analysis. The opinions expressed in this Opinion Letter are limited solely to the laws of the State of Delaware and the federal laws of the United States of America, in each case as currently in effect as of the date hereof. We express no opinion as to the laws of the State of New York (notwithstanding that the Transaction Documents are governed by New York law), the laws of Canada (including, without limitation, any matters relating to goods and services tax, harmonized sales tax, or the operations of Cedarpoint's network operations center in Winnipeg, Manitoba), the laws of the United Kingdom or England and Wales, or the laws of any other state, territory, or foreign jurisdiction. We have not examined, and express no opinion on, any local laws, ordinances, or municipal regulations.
(b) Tax Matters. We have not rendered, and we expressly disclaim, any opinion regarding the tax consequences or tax structuring of the Transaction Documents or the transactions contemplated thereby, including, without limitation, any matters relating to sales and use tax, value-added tax, withholding tax, transfer pricing, intercompany pricing, cross-border tax obligations, tax credits, tax deductions, or the characterization of payments under the Transaction Documents for federal, state, local, or foreign tax purposes.
(c) Matters of Fact. We have not rendered, and we expressly disclaim, any opinion regarding matters of fact. In rendering the opinions expressed herein, we have relied exclusively upon the Officer's Certificate of Rajiv Sundaram dated June 9, 2023, the Secretary's Certificate of Cedarpoint dated June 9, 2023, and the other certificates, documents, and instruments described in Section 1 above, without independent verification or investigation of the factual matters stated therein. We have assumed, without independent confirmation, that all factual statements, representations, and certifications contained in such certificates and documents are true, correct, and complete in all material respects.
(d) Telecommunications Regulatory Matters. We have not rendered, and we expressly disclaim, any opinion regarding compliance with telecommunications-specific regulatory requirements at the federal, state, or local level, including, without limitation, regulations promulgated by the Federal Communications Commission ("FCC"), state public utility commissions, or any equivalent Canadian regulatory authorities. We express no opinion on the applicability of common carrier obligations, universal service requirements, or any other telecommunications regulatory framework to the services contemplated by the Transaction Documents.
(e) Data Protection and Cybersecurity. We have not rendered, and we expressly disclaim, any opinion regarding data protection, data privacy, or cybersecurity laws or regulations, whether federal, state, or local, including, without limitation, the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), the California Consumer Privacy Act ("CCPA"), the California Privacy Rights Act ("CPRA"), the Virginia Consumer Data Protection Act, the General Data Protection Regulation ("GDPR"), the Personal Information Protection and Electronic Documents Act ("PIPEDA"), or any other data protection or privacy statute, regulation, or framework applicable to the parties or the transactions contemplated by the Transaction Documents.
(f) intellectual Property. We have not rendered, and we expressly disclaim, any opinion regarding the intellectual property rights of Cedarpoint in and to the ArcMesh platform (version 4.2) or any other proprietary software, technology, methodology, trade secret, invention, or creative work of Cedarpoint, including, without limitation, the validity, scope, registrability, ownership, non-infringement, or enforceability of any patents, patent applications, trademarks, service marks, trade names, copyrights, copyright registrations, trade secrets, or other intellectual property rights. We have not conducted any patent, trademark, copyright, or trade secret searches or investigations, and we express no opinion on whether Cedarpoint's ArcMesh platform or any other technology infringes, misappropriates, or otherwise violates the intellectual property rights of any third party.
(g) Insurance Matters. We have not rendered, and we expressly disclaim, any opinion regarding the adequacy, sufficiency, validity, or enforceability of the insurance requirements set forth in the Transaction Documents, including, without limitation, any cyber liability insurance, technology errors and omissions insurance, commercial general liability insurance, or other insurance policies maintained by Cedarpoint or required to be maintained by Cedarpoint under the Transaction Documents, including policies issued by or through Braeburn Mutual Insurance Company. We express no opinion on the terms, conditions, exclusions, or coverage limits of any such insurance policies, or on whether such policies would respond to any particular claim or loss.
(h) Change of Control Provisions. We express no opinion as to the enforceability of the change of control provisions set forth in Schedule 2 to the MSA to the extent that such provisions may be subject to equitable defenses, may be deemed unenforceable restraints on alienation under applicable law, or may be affected by the anti-assignment rules of any applicable jurisdiction. The enforceability of such provisions may depend on factual circumstances not known to us and on judicial interpretations that may vary by jurisdiction.
(i) Litigation Matters. We have not conducted any independent investigation regarding, and we express no opinion on, the existence or absence of any litigation, arbitration, administrative proceeding, investigation, or governmental proceeding involving Cedarpoint or any of its officers, directors, or affiliates, except to the extent such matters have been certified and disclosed in the Officer's Certificate of Rajiv Sundaram dated June 9, 2023. We have relied exclusively on the representations and certifications contained in the Officer's Certificate with respect to all such matters.
(j) Most Favored Nation and Pricing Provisions. We express no opinion regarding the enforceability of any most favored nation pricing provision, benchmarking right, audit right, or any right of the Customer to receive retroactive credits, rebates, or prospective price adjustments under the MSA, as such provisions may be subject to equitable considerations, practical limitations on enforcement, or judicial interpretations that may render such provisions difficult or impracticable to enforce in particular factual circumstances. Such provisions may also raise issues regarding definiteness, scope, and the availability of adequate remedies, as to which we express no opinion.
5. Reliance and Other Matters
This Opinion Letter is rendered solely for the benefit of Northgate Americas, Inc. and Calderwood & Harkness LLP, in their capacities as addressees hereof, and may not be relied upon, quoted, referred to, or furnished to any other person or entity, nor may copies hereof be delivered to any other person or entity, without our prior written consent in each instance, except that this Opinion Letter may be furnished to regulatory authorities having jurisdiction over the addressees in connection with a routine examination or inquiry, provided that such regulatory authority is advised that it may not rely on this Opinion Letter.
This Opinion Letter is limited to the matters expressly stated herein, and no opinion is to be implied or inferred beyond the matters expressly set forth in this Opinion Letter. Without limiting the generality of the foregoing, we express no opinion as to any matter not specifically addressed in Section 3 above, and the absence of any opinion on a particular matter should not be construed as an implied expression of opinion on such matter.
This Opinion Letter is rendered as of the date hereof, and we speak only as of such date. We undertake no obligation, and hereby disclaim any responsibility, to update, supplement, revise, or reaffirm this Opinion Letter, or to advise you of any changes in law or fact, or of any new developments, information, or circumstances that may come to our attention after the date hereof, whether or not such changes, developments, information, or circumstances might affect the opinions expressed herein.
This Opinion Letter is delivered as a closing condition pursuant to Section 9.2 of the MSA and is intended to satisfy, in full, the requirement set forth therein for the delivery of a legal opinion of counsel to the Service Provider.
In rendering the opinions expressed herein, we have, with your permission, relied upon the certificates, documents, and other instruments described in Section 1 above without independent investigation or verification of the matters stated therein. We have assumed the accuracy and completeness of all such documents and the truthfulness and correctness of all representations, warranties, and certifications contained therein. Our opinions are subject to, and may be affected by, matters not disclosed to us by Cedarpoint or otherwise not known to us.
This Opinion Letter is governed by, and shall be interpreted in accordance with, the Legal Opinion Principles issued by the Committee on Legal Opinions of the American Bar Association, as published from time to time. To the extent not inconsistent with such principles, this Opinion Letter shall be governed by the laws of the State of Delaware.
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Very truly yours,
WHITFIELD GRAVES & MORROW LLP
By: ________
Name: Douglas Fenn
Title: Partner
WHITFIELD GRAVES & MORROW LLP 1875 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 448-7200 dfenn@wgmlaw.com
Enclosures: None.
cc:
Nadia Okafor, General Counsel Cedarpoint Systems Integration, Inc. 11400 Commerce Park Drive, Suite 600 Reston, VA 20191
Colette Whitman, Partner Calderwood & Harkness LLP 600 Lexington Avenue, 30th Floor New York, NY 10022