Texas Legal Opinion Letter (State Bar of Texas Business Law Section Guidelines)

[LAW FIRM LETTERHEAD]

TEXAS LEGAL OPINION LETTER

(Form Consistent With State Bar of Texas Business Law Section Report on Legal Opinions in Business Transactions)

[DATE]

To: [ADDRESSEE – typically lender, buyer, underwriter, or other relying party]
[________________________________]
[________________________________]

Re: [Transaction description – e.g., Loan Agreement dated [__/__/____] between [Lender] and [________] (the "Company")]

Ladies and Gentlemen:

We have acted as [Texas / special Texas] counsel to [COMPANY NAME], a Texas [corporation / limited liability company / limited partnership] (the "Company"), in connection with the transaction described above (the "Transaction"). This opinion letter is furnished to you pursuant to Section [____] of the [Transaction Agreement].

Unless otherwise defined herein, capitalized terms used in this opinion letter have the meanings set forth in the [Transaction Agreement].

1. DOCUMENTS EXAMINED

In connection with the opinions set forth herein, we have examined and relied upon originals, certified copies, or photocopies of the following (collectively, the "Reviewed Documents"):

(a) The [Transaction Agreement], together with all exhibits and schedules thereto;

(b) The Company's Certificate of Formation filed with the Texas Secretary of State and all amendments thereto;

(c) The Company's [Bylaws / Company Agreement / Limited Partnership Agreement];

(d) Resolutions of the Company's [board of directors / managers / members / general partner] authorizing the Transaction, certified by the [Secretary / Manager];

(e) A Certificate of Fact of Existence issued by the Texas Secretary of State dated [__/__/____] (attached as Schedule 1);

(f) A Certificate of Account Status issued by the Texas Comptroller of Public Accounts dated [__/__/____] confirming the Company is in good standing for franchise tax purposes under Tex. Tax Code Ch. 171 (attached as Schedule 2);

(g) An Officer's Certificate of the Company dated the date hereof (attached as Schedule 3); and

(h) Such other documents, certificates, and records as we have deemed necessary or appropriate.

2. ASSUMPTIONS

In rendering the opinions set forth herein, we have relied, with your permission and without independent investigation, upon the following assumptions customary under the State Bar of Texas Business Law Section Legal Opinions Committee guidelines:

(a) The genuineness of all signatures on all documents, the authenticity of all documents submitted to us as originals, and the conformity to originals of all documents submitted to us as copies;

(b) The legal capacity of all natural persons executing the Reviewed Documents;

(c) That each party to the Transaction Documents (other than the Company) has been duly organized and is validly existing, has the requisite power and authority to execute and deliver such documents, has taken all necessary action to authorize execution, and has duly executed and delivered the Transaction Documents;

(d) That the Transaction Documents constitute the legal, valid, binding, and enforceable obligations of each party thereto other than the Company;

(e) That all factual representations and warranties made by the Company in the Transaction Documents and in the Officer's Certificate are true, correct, and complete;

(f) That there has been no mutual mistake, fraud, duress, or undue influence;

(g) That the conduct of the parties has complied with any requirement of good faith, fair dealing, and conscionability; and

(h) That no consent, approval, or authorization of any governmental authority (other than those obtained) is required.

3. QUALIFICATIONS AND LIMITATIONS

Our opinions set forth below are subject to the following qualifications:

3.1 Texas Law Only. We are members of the State Bar of Texas and our opinions are limited to (i) the laws of the State of Texas, (ii) the federal laws of the United States of America to the extent specifically referenced herein, and (iii) with respect to the opinion regarding the Company's existence and good standing, reliance on the Certificates identified in Section 1(e) and 1(f). We express no opinion as to the laws of any other state or jurisdiction.

3.2 Bankruptcy Exception. The enforceability of the Transaction Documents is subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, and similar laws affecting creditors' rights generally, including Tex. Bus. & Com. Code Ch. 24 (Texas Uniform Fraudulent Transfer Act).

3.3 Equitable Principles Exception. Enforceability is subject to general principles of equity (regardless of whether considered in a proceeding at law or in equity), including principles of good faith, fair dealing, commercial reasonableness, materiality, and the availability of equitable remedies.

3.4 Usury. We express no opinion regarding compliance with Tex. Fin. Code Ch. 302–306 (Texas usury laws), except to note that the Transaction Documents contain a "savings clause" compliant with Tex. Fin. Code § 306.004 intended to prevent any interest from exceeding the maximum nonusurious rate under Texas law.

3.5 Homestead and Community Property. We express no opinion as to the effect of Article XVI, § 50 of the Texas Constitution (homestead protections) or the community property laws of Texas (Tex. Fam. Code Ch. 3) on the Transaction.

3.6 Specific Exclusions. We express no opinion concerning: (a) Texas or federal tax laws; (b) Texas or federal securities laws, including the Texas Securities Act (Tex. Gov't Code Ch. 4001 et seq.); (c) antitrust laws; (d) environmental laws, including the Texas Solid Waste Disposal Act; (e) labor and employment laws, including the Texas Labor Code; (f) ERISA and employee benefit matters; (g) the Texas Uniform Commercial Code except as expressly set forth below; (h) criminal laws; (i) pension or healthcare regulatory matters; or (j) matters governed by federal preemption.

3.7 Choice of Law. We express no opinion as to whether a Texas court would give effect to a choice-of-law provision selecting the law of a jurisdiction other than Texas, except that a Texas court may apply the law chosen by the parties under Tex. Bus. & Com. Code § 1.301.

3.8 Remedies Qualifications. Certain remedial provisions, including self-help, waivers of notice, jury waivers, and forum selection clauses, may be limited or unenforceable under Texas law. For example:

(i) Tex. Bus. & Com. Code § 9.602 limits waivers of debtor protections under UCC Article 9;
(ii) In re Poly-America, L.P., 262 S.W.3d 337 (Tex. 2008), addresses unconscionability of arbitration provisions;
(iii) Contractual jury waivers must be knowing and voluntary (In re Prudential Ins. Co., 148 S.W.3d 124 (Tex. 2004)).

4. OPINIONS

Based upon and subject to the foregoing, and subject to the assumptions, qualifications, and limitations set forth herein, we are of the opinion that:

4.1 Existence and Good Standing. The Company is a [corporation / limited liability company / limited partnership] duly formed and validly existing under the Texas Business Organizations Code, and is in good standing with (a) the Texas Secretary of State and (b) the Texas Comptroller of Public Accounts for purposes of the Texas franchise tax (Tex. Tax Code Ch. 171), in each case as of the date of the Certificates referenced in Section 1.

4.2 Power and Authority. The Company has the requisite [corporate / limited liability company / partnership] power and authority under the Texas Business Organizations Code (Chapters [21 / 101 / 153] as applicable) to execute and deliver the Transaction Documents to which it is a party and to perform its obligations thereunder.

4.3 Due Authorization. The execution, delivery, and performance of the Transaction Documents by the Company have been duly authorized by all necessary [corporate / limited liability company / partnership] action of the Company.

4.4 Due Execution and Delivery. The Transaction Documents have been duly executed and delivered by the Company.

4.5 Enforceability. The Transaction Documents constitute the legal, valid, and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to the qualifications set forth in Section 3.

4.6 No Conflict. The execution and delivery of the Transaction Documents by the Company and the performance by the Company of its obligations thereunder do not (a) violate the Company's Certificate of Formation or [Bylaws / Company Agreement / Limited Partnership Agreement], (b) violate any provision of the Texas Business Organizations Code or, to our knowledge (based solely on the Officer's Certificate), any Texas statute, rule, or regulation applicable to the Company.

[4.7 OPTIONAL – UCC Article 9 Perfection Opinion]. The UCC-1 financing statement filed with the Texas Secretary of State on [__/__/____], File No. [____________], is sufficient, under Tex. Bus. & Com. Code § 9.502, to perfect the security interest of the [Lender] in that portion of the Collateral in which a security interest can be perfected by filing a financing statement under Chapter 9 of the Texas Business and Commerce Code, assuming the Company has rights in such Collateral and that value has been given.

5. RELIANCE

This opinion letter is furnished solely for the benefit of the addressee(s) identified above in connection with the Transaction and may not be relied upon by any other person, used for any other purpose, quoted in whole or in part, or delivered to any other person (other than the addressee's regulators, auditors, and counsel who may rely upon this opinion as if it were addressed to them), without our prior written consent.

This opinion speaks only as of the date hereof, and we undertake no obligation to update, supplement, or revise this opinion after the date hereof, whether as a result of changes in law, changes in fact, or otherwise.

Very truly yours,

[LAW FIRM NAME]

By: _______________________________________
[ATTORNEY NAME]
Texas State Bar No. [____________]
[TITLE – Partner / Shareholder / Member]

SCHEDULE 1 – CERTIFICATE OF FACT (Texas Secretary of State)

SCHEDULE 2 – CERTIFICATE OF ACCOUNT STATUS (Texas Comptroller)

SCHEDULE 3 – OFFICER'S CERTIFICATE OF [COMPANY]

Sources and References

• State Bar of Texas Business Law Section, Report of the Legal Opinions Committee – https://www.texasbarbusinesslaw.org/
• Tex. Bus. Orgs. Code Chs. 21, 101, 153 – https://statutes.capitol.texas.gov/Docs/BO/htm/BO.1.htm
• Tex. Bus. & Com. Code Ch. 9 (UCC Article 9)
• Tex. Tax Code Ch. 171 (Franchise Tax)
• Tex. Fin. Code Chs. 302–306 (Usury)
• TriBar Opinion Committee, Third-Party "Closing" Opinions, 53 Bus. Law. 591 (1998)