CALDERWOOD & HARKNESS LLP Attorneys at Law
2000 McKinney Avenue, Suite 3400 Dallas, TX 75201
Telephone: (214) 555-7800 Facsimile: (214) 555-7801
July 22, 2023
The Former Stockholders of Codelaunch Labs, Inc.
and
Naveen Subramaniam, in his capacity as Stockholder Representative
c/o Caldwell, Raines & Fitch LLP 600 Congress Avenue, Suite 2200 Austin, TX 78701
Re: Legal Opinion of Buyer's Counsel — Agreement and Plan of Merger, dated as of June 1, 2023, among Brightfield Cloud Services Inc., BCS DevTools Merger Sub, Inc., and Codelaunch Labs, Inc.
Calderwood & Harkness LLP Matter No. 1042-00004
Ladies and Gentlemen:
We have acted as counsel to Brightfield Cloud Services Inc., a corporation duly organized and existing under the laws of the State of Delaware ("BCS"), and BCS DevTools Merger Sub, Inc., a corporation duly organized and existing under the laws of the State of Delaware and a wholly owned subsidiary of BCS ("Merger Sub"), in connection with the transactions contemplated by that certain Agreement and Plan of Merger, dated as of June 1, 2023 (the "Merger Agreement"), by and among BCS, Merger Sub, and Codelaunch Labs, Inc., a corporation organized under the laws of the State of Delaware (the "Company"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement.
The Merger is being consummated pursuant to Section 251 of the Delaware General Corporation Law, as amended (the "DGCL"). Pursuant to the terms and conditions of the Merger Agreement, Merger Sub is merging with and into the Company, with Merger Sub surviving as a wholly owned subsidiary of BCS (the "Merger"). The aggregate merger consideration payable in connection with the Merger is Twenty-Two Million Dollars ($22,000,000), consisting of (i) Sixteen Million Five Hundred Thousand Dollars ($16,500,000) in closing cash consideration payable at the Closing, (ii) up to Three Million Three Hundred Thousand Dollars ($3,300,000) in earnout consideration, payable upon the achievement of certain milestones as more particularly set forth in Article II of the Merger Agreement, and (iii) Two Million Two Hundred Thousand Dollars ($2,200,000) deposited on or prior to the date hereof into escrow with Lone Star Trust Company, N.A. ("Escrow Agent"), pursuant to the terms and conditions of the Escrow Agreement (as defined below).
This opinion letter is being delivered to you pursuant to Section 7.2(e) of the Merger Agreement in connection with the closing of the Merger occurring on the date hereof (the "Closing Date").
I. DOCUMENTS EXAMINED
In connection with the opinions expressed herein, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (collectively, the "Reviewed Documents"):
1. The Agreement and Plan of Merger, dated as of June 1, 2023, by and among BCS, Merger Sub, and the Company, together with all exhibits, schedules, and disclosure schedules thereto (execution version) (the "Merger Agreement");
2. The Amended and Restated Certificate of Incorporation of Brightfield Cloud Services Inc. (Delaware Secretary of State File No. 5928174; Employer Identification Number 81-2045783), as certified by the Secretary of State of the State of Delaware on July 14, 2023;
3. The Amended and Restated Bylaws of Brightfield Cloud Services Inc., as amended and in effect as of the date hereof, certified to us by an officer of BCS;
4. The Certificate of Incorporation of BCS DevTools Merger Sub, Inc. (Delaware Secretary of State File No. 7916483; Employer Identification Number 93-1748206), as filed with the Secretary of State of the State of Delaware on June 15, 2023;
5. The Bylaws of BCS DevTools Merger Sub, Inc., as adopted and in effect as of the date hereof, certified to us by an officer of Merger Sub;
6. The Certificate of Merger of BCS DevTools Merger Sub, Inc. with and into Codelaunch Labs, Inc., as filed with the Secretary of State of the State of Delaware on July 18, 2023 (the "Certificate of Merger");
7. Resolutions of the Board of Directors of Brightfield Cloud Services Inc., adopted at a duly convened meeting held on May 28, 2023, authorizing the execution, delivery, and performance of the Merger Agreement and the consummation of the Merger and the other transactions contemplated thereby, certified to us by the Secretary of BCS as being true, correct, and complete and as being in full force and effect as of the date hereof without modification or amendment;
8. Resolutions of the Board of Directors of BCS DevTools Merger Sub, Inc., adopted by unanimous written consent effective as of June 16, 2023, authorizing the execution, delivery, and performance of the Merger Agreement and the consummation of the Merger and the other transactions contemplated thereby, certified to us by the Secretary of Merger Sub as being true, correct, and complete and as being in full force and effect as of the date hereof without modification or amendment;
9. The action by written consent of Brightfield Cloud Services Inc., as the sole stockholder of BCS DevTools Merger Sub, Inc., dated June 16, 2023, approving and adopting the Merger Agreement and the transactions contemplated thereby, in accordance with Section 228 of the DGCL and the certificate of incorporation and bylaws of Merger Sub;
10. The Escrow Agreement, dated as of July 22, 2023, by and among BCS, Naveen Subramaniam in his capacity as Stockholder Representative, and Lone Star Trust Company, N.A., as Escrow Agent (Escrow Account Reference No. LSTC-ESC-2023-004417) (the "Escrow Agreement");
11. A certificate of good standing for Brightfield Cloud Services Inc. issued by the Secretary of State of the State of Delaware, dated July 17, 2023, and a certificate of good standing for BCS DevTools Merger Sub, Inc. issued by the Secretary of State of the State of Delaware, dated July 17, 2023, each dated within five (5) business days of the Closing Date;
12. An officer's certificate of Brightfield Cloud Services Inc., dated as of the Closing Date, executed by the Chief Executive Officer and General Counsel of BCS, and an officer's certificate of BCS DevTools Merger Sub, Inc., dated as of the Closing Date, executed by the President of Merger Sub, each delivered in connection with the closing of the Merger; and
13. Such other documents, records, agreements, instruments, and certificates as we have deemed necessary or appropriate for purposes of rendering the opinions set forth herein.
We have also made such inquiries of officers and representatives of BCS and Merger Sub, and have reviewed such matters of law, as we have considered relevant and necessary as a basis for the opinions set forth below.
II. ASSUMPTIONS
In rendering the opinions set forth in this letter, we have, with your consent and without independent verification or investigation (except as expressly set forth herein), assumed the following:
1. Genuineness of Signatures. All signatures on all documents reviewed by us (other than signatures executed on behalf of BCS and Merger Sub) are genuine and authentic.
2. Authenticity and Conformity of Documents. All documents submitted to us as originals are authentic, complete, and accurate, and all documents submitted to us as copies conform in all material respects to the originals thereof. All public records and certificates of public officials reviewed by us are accurate and complete as of the respective dates thereof.
3. Legal Capacity of Natural Persons. Each natural person who executed any of the Reviewed Documents (other than those signing on behalf of BCS or Merger Sub) had, at the time of such execution, full legal capacity to do so.
4. Due Authorization by Other Parties. The Merger Agreement and each ancillary document delivered in connection with the Merger have been duly authorized, executed, and delivered by each party thereto other than BCS and Merger Sub, and each such party had the requisite power and authority (corporate or otherwise) to enter into and perform its obligations under such documents.
5. Enforceability Against Other Parties. The Merger Agreement and each ancillary agreement delivered in connection with the Merger constitute legal, valid, and binding obligations of each party thereto other than BCS and Merger Sub, enforceable against each such party in accordance with their respective terms, subject to applicable bankruptcy, insolvency, and similar laws and general principles of equity.
6. Accuracy of Representations and Warranties. All factual representations and warranties made by BCS and Merger Sub in the Merger Agreement and in the officer's certificates and other certificates delivered to us in connection with the closing of the Merger are true, correct, and complete in all material respects as of the date hereof. We have relied upon such representations and warranties without any independent investigation of the factual matters set forth therein.
7. Stockholder Approval of the Company. The written consent of the stockholders of Codelaunch Labs, Inc., dated June 9, 2023, approving and adopting the Merger Agreement and the transactions contemplated thereby, was duly adopted in accordance with Section 228 of the DGCL and the certificate of incorporation and bylaws of the Company, and such written consent was executed by stockholders holding the requisite number of shares necessary to approve the Merger Agreement.
8. Filings, Registrations, and Recordings. All filings, registrations, and recordings contemplated by the Merger Agreement or otherwise required to consummate the transactions contemplated thereby have been or will be duly made in all applicable jurisdictions in a timely manner and in accordance with all applicable legal requirements.
9. Effectiveness of Certificate of Merger. The Certificate of Merger filed with the Secretary of State of the State of Delaware on July 18, 2023 has been duly accepted for filing and is effective as of the Closing Date, and the Merger has become effective in accordance with the DGCL upon such filing.
III. OPINIONS
Based upon and subject to the foregoing, and subject to the qualifications and limitations set forth in Section IV below, we are of the opinion that:
3.1 Due Organization and Valid Existence of BCS
Brightfield Cloud Services Inc. is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware (Delaware Secretary of State File No. 5928174). Based upon our review of the good standing certificate referenced in Section I(11) above, BCS's corporate status is active and in good standing with the Delaware Secretary of State as of a date within five (5) business days of the Closing Date.
3.2 Due Organization and Valid Existence of Merger Sub
BCS DevTools Merger Sub, Inc. is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware (Delaware Secretary of State File No. 7916483). Merger Sub was formed on June 15, 2023, by the filing of its Certificate of Incorporation with the Secretary of State of the State of Delaware. Based upon our review of the good standing certificate referenced in Section I(11) above, Merger Sub's corporate status is active and in good standing with the Delaware Secretary of State as of a date within five (5) business days of the Closing Date. Merger Sub is, and at all relevant times has been, a wholly owned subsidiary of BCS.
3.3 Corporate Power and Authority
Each of BCS and Merger Sub has the requisite corporate power and authority under its certificate of incorporation, its bylaws, and the DGCL to execute and deliver the Merger Agreement and to consummate the Merger and the other transactions contemplated by the Merger Agreement. In addition, BCS has the corporate power and authority to execute and deliver each ancillary agreement to which it is a party, including, without limitation, the Escrow Agreement, and to perform its obligations thereunder.
3.4 Due Authorization
The execution, delivery, and performance of the Merger Agreement by each of BCS and Merger Sub, and the consummation of the Merger and the other transactions contemplated thereby, have been duly authorized by all necessary corporate action on the part of BCS and Merger Sub. Specifically:
(a) The Board of Directors of BCS has duly adopted resolutions approving and authorizing the execution, delivery, and performance of the Merger Agreement and the consummation of the Merger and the other transactions contemplated thereby, and such resolutions remain in full force and effect and have not been amended, modified, rescinded, or revoked;
(b) The Board of Directors of Merger Sub has duly adopted resolutions approving and authorizing the execution, delivery, and performance of the Merger Agreement and the consummation of the Merger and the other transactions contemplated thereby, and such resolutions remain in full force and effect and have not been amended, modified, rescinded, or revoked;
(c) BCS, as the sole stockholder of Merger Sub, has duly approved and adopted the Merger Agreement by written consent effective as of June 16, 2023, in accordance with Section 228 of the DGCL and the certificate of incorporation and bylaws of Merger Sub; and
(d) No other corporate proceedings on the part of BCS or Merger Sub are necessary to authorize the execution, delivery, and performance of the Merger Agreement or the consummation of the Merger or the other transactions contemplated thereby.
3.5 Execution and Delivery
The Merger Agreement has been duly executed and delivered by each of BCS and Merger Sub. Each ancillary agreement to which BCS or Merger Sub is a party, including, without limitation, the Escrow Agreement and the Certificate of Merger, has been duly executed and delivered by BCS or Merger Sub, as applicable.
3.6 Enforceability. The Merger Agreement constitutes a legal, valid, and binding obligation of each of BCS and Merger Sub, enforceable against each of BCS and Merger Sub in accordance with its terms, subject, in each case, to the Enforceability Exceptions (as defined in Section 4.1 below).
3.7 No Conflicts
The execution, delivery, and performance of the Merger Agreement by BCS and Merger Sub, and the consummation of the Merger and the other transactions contemplated by the Merger Agreement, do not and will not:
(a) conflict with, violate, or result in a breach of any provision of the certificate of incorporation or bylaws of BCS or the certificate of incorporation or bylaws of Merger Sub, each as in effect on the date hereof;
(b) to our knowledge, conflict with, result in a breach of, constitute (with or without notice or lapse of time, or both) a default under, give rise to any right of termination, acceleration, or cancellation under, or require any consent, approval, or waiver under, any material agreement, contract, indenture, mortgage, deed of trust, lease, license, note, or other instrument to which BCS or Merger Sub is a party or by which BCS or Merger Sub or any of their respective assets or properties is bound; or
(c) to our knowledge, violate or conflict with any order, judgment, writ, injunction, decree, statute, rule, or regulation applicable to BCS or Merger Sub or any of their respective assets or properties.
3.8 Certificate of Merger
The Certificate of Merger has been duly executed by BCS and Merger Sub and was duly filed with the Secretary of State of the State of Delaware on July 18, 2023, in accordance with Section 251 of the DGCL. Subject to Assumption II(9) above, upon the effectiveness of the Certificate of Merger, the Merger has been duly consummated in accordance with the DGCL, and Merger Sub is the surviving corporation of the Merger and continues its corporate existence as a wholly owned subsidiary of BCS.
IV. QUALIFICATIONS AND LIMITATIONS
The opinions expressed herein are subject to the following qualifications and limitations:
4.1 Enforceability Exceptions
All opinions expressed herein as to enforceability are subject to and limited by:
(a) applicable bankruptcy, insolvency, reorganization, moratorium, receivership, conservatorship, fraudulent conveyance, fraudulent transfer, preferential transfer, and other similar laws of general applicability now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally; and
(b) general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith, fair dealing, and the possible unavailability of specific performance, injunctive relief, or other equitable remedies, regardless of whether enforceability is considered in a proceeding in equity or at law.
The limitations described in clauses (a) and (b) above are collectively referred to herein as the "Enforceability Exceptions."
4.2 Scope Limitations
The opinions expressed herein are limited solely to the laws of the State of Delaware (including the statutory provisions of the DGCL, applicable provisions of the Delaware Constitution, and reported judicial decisions interpreting the foregoing) and the federal laws of the United States of America, each as in effect on the date hereof. We express no opinion as to the laws of any other jurisdiction, including, without limitation, the laws of the State of Texas or any other state or foreign jurisdiction, and we express no opinion as to any municipal or local laws or rules or as to any regulatory requirements of any governmental body or agency.
Without limiting the generality of the foregoing, we express no opinion with respect to:
(a) any provision of the Merger Agreement or any ancillary agreement relating to indemnification, contribution, or exculpation, to the extent that such provisions may be limited by applicable law or public policy, including, without limitation, limitations imposed by courts applying public policy considerations;
(b) the enforceability of any non-competition, non-solicitation, employee non-hire, or similar restrictive covenant contained in the Merger Agreement or any ancillary agreement, which enforceability may be limited by applicable law in certain jurisdictions;
(c) the tax consequences of the Merger or any related transaction to any party, including, without limitation, any characterization of the Merger for federal, state, or local income tax purposes;
(d) compliance with federal or state securities laws, including, without limitation, the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, and any applicable state "blue sky" laws or regulations;
(e) antitrust or competition laws, including, without limitation, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the Sherman Antitrust Act, the Clayton Act, and the Federal Trade Commission Act;
(f) the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA") or any similar law applicable to financial institutions;
(g) the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Internal Revenue Code of 1986, as amended, to the extent relating to employee benefit matters, or any other federal, state, or local laws, rules, or regulations relating to employee benefits, pension plans, or welfare benefit plans;
(h) any federal, state, or local environmental laws, rules, or regulations, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), the Resource Conservation and Recovery Act ("RCRA"), and any analogous state or local statutes; and
(i) any federal, state, or local intellectual property laws, rules, or regulations, including, without limitation, the Patent Act, the Copyright Act, the Lanham Act, and the Defend Trade Secrets Act, or any laws relating to data privacy or data protection.
4.3 Knowledge Qualification
Where any opinion expressed herein is qualified by the phrase "to our knowledge" or any similar phrase, such phrase means the actual, current, conscious knowledge of Beatrice Holloway, James Prentice, Ryan Kowalski, and Megan Chu, each of whom is an attorney at Calderwood & Harkness LLP and each of whom has had substantial involvement in representing BCS and Merger Sub in connection with the negotiation, execution, and consummation of the Merger. The phrase "to our knowledge" does not include constructive or imputed knowledge and does not imply that we have undertaken any independent investigation or inquiry beyond our review of the Reviewed Documents described in Section I above and our discussions with officers and representatives of BCS and Merger Sub in connection with this engagement. We have not conducted any independent searches of court dockets, lien filings, judgment records, or other public records in connection with the rendering of the opinions set forth herein, and no inference as to our knowledge of the existence or absence of any facts should be drawn from our representation of BCS and Merger Sub or from the rendering of the opinions set forth herein.
4.4 No Duty to Update
This opinion letter is rendered solely as of the date hereof, and we express no opinion as to the effect of any fact, circumstance, event, change in law, or other matter that may arise or occur after the date hereof. We assume no obligation to advise you of, and we disclaim any responsibility to update or supplement this opinion to reflect, any facts or circumstances that may hereafter come to our attention, any changes in law that may hereafter occur, or any other matters that may hereafter arise, whether or not such facts, circumstances, changes, or matters would affect the opinions expressed herein if they existed or were known on the date hereof.
V. RELIANCE AND USE
This opinion letter is furnished solely for the benefit of the former stockholders of Codelaunch Labs, Inc. and Naveen Subramaniam, in his capacity as Stockholder Representative, in connection with the closing of the Merger contemplated by the Merger Agreement. This opinion letter is rendered in satisfaction of the condition set forth in Section 7.2(e) of the Merger Agreement and is intended solely for use in connection therewith.
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. No person or entity other than those to whom this letter is addressed (and, as set forth below, Caldwell, Raines & Fitch LLP) shall be entitled to rely on the opinions expressed herein, and we expressly disclaim any duty, obligation, or liability to any third party in connection with this opinion letter.
Notwithstanding the foregoing, Caldwell, Raines & Fitch LLP, in its capacity as counsel to the Company and its former stockholders in connection with the Merger, may rely on the opinions expressed in this letter as if this letter were addressed directly to such firm, subject to the same qualifications, assumptions, and limitations set forth herein.
This opinion letter may not be quoted in whole or in part, summarized, paraphrased, or excerpted in any document, and may not be filed with any governmental agency or regulatory authority, or otherwise made public or furnished to any other person or entity, without our prior written consent, except (i) as may be required by applicable law, regulation, or court order, or (ii) in connection with any legal proceeding arising out of or relating to the Merger Agreement, the Merger, or the transactions contemplated thereby, provided that any such disclosure shall be subject to the qualifications, assumptions, and limitations set forth herein.
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SIGNATURE PAGE TO LEGAL OPINION OF CALDERWOOD & HARKNESS LLP
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Beatrice Holloway
Title: Partner
Calderwood & Harkness LLP 2000 McKinney Avenue, Suite 3400 Dallas, TX 75201
Telephone: (214) 555-7800
Email: bholloway@calderwoodharkness.com
cc: Brightfield Cloud Services Inc. — Attention: General Counsel Caldwell, Raines & Fitch LLP — Attention: Mergers & Acquisitions Group Lone Star Trust Company, N.A. — Attention: Corporate Trust Administration