Fill and Sign the 91725m Inst Instructions to Borrowers Counsel Hud Form

OPINION LETTER FORM AND VARIATIONS TABLE OF CONTENTS LEGAL OPINION OF BORROWER'S COUNSEL INSTRUCTIONS FOR COMPLETING THE LEGAL OPINION 1 Guarantor OPINION GIVER'S ALTERNATIVE PROVISIONS 1 Specific Exceptions As To Actual Knowledge 2 General Caveat As To Knowledge; Reliance On Third Parties 3 Caveats 4 Exclusions 5 Supplemental Qualifications As To Enforceability, Etc. CERTIFICATE BY BORROWER Legal Opinion of Borrower's Counsel1 {{{47/LAW FIRM OF BORROWER'S ATTORNEY}}} {{{48/ADDRESS OF BORROWER'S ATTORNEY}}} {{{28/DATE OF ORIGINAL LOAN CLOSING}}} {{{1/LENDER}}} {{{2/ADDRESS OF LENDER (FOR NOTICES)}}} {{{13/LAW FIRM OF LENDER'S ATTORNEY}}} {{{14/ADDRESS OF LENDER'S ATTORNEY}}} Re: ${{{19/AMOUNT OF LOAN}}} Loan by {{{1/LENDER}}} to {{{31/BORROWER}}} Gentlemen: We acknowledge that you are relying on our opinion, as counsel for {{{31/BORROWER}}} (the "Borrower ") and {{{61/GUARANTOR}}} (the "Guarantor ") in connection with a ${{{19/AMOUNT OF LOAN}}} loan to be made by {{{1/LENDER}}} (the "Lender ") to the Borrower (the "Loan ") secured by, inter alia, a {{{57/PRIORITY OF LENDER'S LIEN}}} mortgage against {{{53/ADDRESS OF REAL ESTATE}}} (such property, together with all improvements thereon, being called the "Real Estate "). We further acknowledge that the Lender would not make the Loan without this opinion. The Borrower and each Guarantor (if any) are each called an "Obligor ." We have examined and are familiar with the note, the mortgage (the "Mortgage "), and all other instruments executed and delivered by or on behalf of each Obligor and evidencing or securing the Loan, or otherwise relating to the Loan, including, without limitation, the documents described on Exhibit A to this 1 See Chapter 9 of the main text of this book regarding legal opinions generally. This Chapter may discuss variations of the following form which are not included in such form and which are applicable to your particular transaction. opinion (such note, mortgage, and other instruments being collectively called the "Loan Documents "). We have also examined and are familiar with all steps taken in connection with the organization of each Obligor (other than any Obligor which is an individual) under the laws of the jurisdiction where such Obligor was organized, including, without limitation, 1) in the case of each Obligor which is a corporation, its certificate of incorporation and bylaws, 2) in the case of each Obligor which is a partnership, its certificate of partnership and partnership agreement, 3) in the case of each Obligor which is a limited liability company, its operating agreement and its certificate of formation, and 4) and in each case specified above in this sentence, all amendments thereto. We have also examined and are familiar with such other actions of or by each Obligor as we have deemed necessary in the circumstances. In addition, we have examined such matters of law, documents and certificates of public officials as we have deemed relevant to the rendering of our opinion. In all such examinations, we have assumed the conformity to original documents of all copies submitted to us as certified or photostatic copies. Based upon the foregoing, we are of the opinion that: Organization, Standing, Power And Authority To Own And Operate . Each Obligor which is not an individual is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is duly qualified and in good standing to do business in such jurisdiction and in the State of {{{56/STATE IN WHICH REAL ESTATE IS LOCATED}}}, and has all requisite power and authority to own its properties and to carry on its business as now being conducted. Power And Authority To Perform Loan Documents; No Notice Or Approvals Required . Each Obligor has full power and authority: 1) to enter into and perform and observe the Loan Documents executed by such Obligor, and 2) to create the security interests and liens made or granted by such Obligor to the Lender as provided in the Loan Documents. All of the Loan Documents have been duly authorized by all necessary and proper corporate, partnership or other action. No registration, notice, consent or approval (governmental or otherwise), or the taking of any other action (including, without limitation, by any governmental entity or any shareholders, members or partners of any Obligor), is required as a condition to the execution, delivery, performance, validity or enforceability of any of the Loan Documents, except for any registration, notice, consent or approval previously delivered to the Lender. Loan Documents Authorized And Enforceable . Each of the Loan Documents has been duly authorized, executed and delivered. Each Loan Document is the valid and legally binding obligation of each Obligor executing such Loan Document, as the case may be, enforceable in accordance with its respective terms (but in any event the original principal amount of the indebtedness which is owed by the Borrower to the Lender in connection with the Loan is ${{{19/AMOUNT OF LOAN}}}, plus all interest and other charges accrued on such principal amount, as of the date of this opinion letter) except to the extent that enforcement of such Loan Document may be limited by applicable bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally. Loan Documents Will Not Violate Documents, Orders, Or Laws . The execution, delivery and performance by each Obligor of the Loan Documents do not and will not: (i) violate, or result in any breach of, or cause a default (with notice or lapse of time or both) (a) under any provision of the certificate of incorporation and bylaws of any corporate Obligor or (b) under any provision of any partnership agreement of any Obligor which is a partnership, or (c) under any provision of the articles of organization and operating agreement of any Obligor which is a limited liability company; (ii) violate any order, writ, injunction, decree or judgment (each such order, writ, injunction, decree, and judgment being called an "Order "), or any provisions of any statute, rule, regulation, or law, domestic or foreign (each such statute, rule, regulation, or law being called a "Law "), (iii) violate or conflict with, result in a breach of or constitute (with notice or lapse of time, or both) a default under any mortgage, indenture or agreement to which any Obligor is a party, or by which any Obligor or any of their respective properties are bound or affected (each such mortgage, indenture, or agreement being called the "Agreements "); or (iv) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any property or assets of any Obligor except as contemplated by the Loan Documents. No Litigation . There is no action, suit, investigation or administrative proceeding of or before any court, arbitrator or governmental department, commission, board, bureau, agency or authority, domestic or foreign (each such court, arbitrator, or governmental body being called a "Governmental Authority "), pending or threatened against any Obligor or any of their respective properties or assets which (i) either in any case or in the aggregate, if adversely determined, would materially and adversely affect the business, operation or condition (financial or otherwise), of any Obligor; or (ii) question the validity of any of the Loan Documents or any action to be taken in connection with any transaction contemplated by any of the Loan Documents.Obligors Not In Violation Of Orders Or Laws . No Obligor is in default with respect to any Order of any Governmental Authority, or in violation of any Law to which any of them is, or any of their respective properties are, subject, except for such defaults or violations which, in the aggregate, will not have a material and adverse effect on the business operations or condition, financial or otherwise, of any Obligor. No Margin Stock . The proceeds of the Loan are not being, and will not be, used, directly or indirectly, for the purpose of "purchasing" or "carrying" any "margin stock" in contravention of Regulations G, U, or X promulgated by the Board of Governors of the Federal Reserve System. Priority And Perfection . Each security interest or lien intended to be created by the Loan Documents has been created, and constitutes a valid, enforceable, {{{57/PRIORITY OF LENDER'S LIEN}}} perfected security interest in, and lien on, the Real Estate and all other collateral covered by the Loan Documents, in the Lender's favor, upon the terms therein purported to be granted pursuant to the Loan Documents, free and clear of all other liens or encumbrances, and all other rights, options, or claims of any kind, except as expressly provided in the Loan Documents. The security interest and lien in favor of the Lender is in the original principal amount of ${{{19/AMOUNT OF LOAN}}}, and secures all interest and other charges on such amount. No Usury . The amounts to be received by Lender as interest pursuant to the terms of the Loan Documents constitute lawful interest under the laws of the State of {{{87/STATE WHOSE LAW GOVERNS}}}. Headings Have No Legal Effect . The headings and captions of this opinion letter are for convenience of reference only, and have no legal effect, and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions of this opinion letter. Very truly yours, {{{47/LAW FIRM OF BORROWER'S ATTORNEY}}} 2 2 If the Borrower's attorney is a solo practitioner not operating as a law firm, then change the existing references in the opinion from "we" and "our" to "I" and "my," and also insert a signature block at this location for {{{46/BORROWER'S ATTORNEY}}} rather than a signature block for {{{47/LAW FIRM OF BORROWER'S ATTORNEY}}}. Exhibit A Loan Documents INSTRUCTIONS FOR COMPLETING THE LEGAL OPINION 1. Guarantor The above form of opinion assumes that there is a Guarantor. If there is no Guarantor, then delete the definition of Guarantor in the first paragraph. Also, delete the definition of "Obligor" in the first paragraph, and change the term "Obligor" to "Borrower." OPINION GIVER'S ALTERNATIVE PROVISIONS The opinion giver (typically the Borrower's counsel) should consider incorporating the following provisions in the opinion: 1 ฀ Specific Exceptions As To Actual Knowledge . The opinions stated in paragraphs 4 ("Loan Documents Will Not Violate Documents, Orders, Or Laws"), 5 ("No Litigation"), 6 ("Obligors Not In Violation Of Orders Or Laws"), and 7 ("No Margin Stock") should be qualified so as to be given only to the opinion giver's actual knowledge. 2 ฀ General Caveat As To Knowledge; Reliance On Third Parties . The opinion giver should add the following paragraphs to the opinion letter. These paragraphs are typically added before the numbered opinions contained in the opinion letter. We have assumed the genuineness of all signatures on original or certified copies. As to the various questions of fact relevant to such opinions, we have relied upon, and assumed, without independent investigation or review, the accuracy of, the representations and warranties contained in the Loan Documents, and certificates and verbal or written statements and other information of or from public officials, officers or representatives of the Borrower and others. We have also assumed that all documents have been duly authorized, executed and delivered by, and constitute legal, valid and binding obligations of, all parties thereto other than the Obligors, enforceable against such parties in accordance with their respective terms, and that the Loan Documents were issued and delivered to the Lender in the form we have examined. Whenever any opinion in this letter with respect to the existence or absence of facts is indicated to be based on our knowledge or awareness, it is intended to signify that during the course of our representation of the Borrower as described in this opinion, no information has come to our attention which would give us actual knowledge of the existence or absence of such facts. However, except to the extent expressly set forth in this opinion, we have not undertaken any independent investigation to determine the existence or absence of such facts, and no inference as to our knowledge of the existence or absence of such facts should be drawn from our representation of the Borrower or any Obligor. We have not made or undertaken to make any investigation of the state of title to the Real Estate, or to any personal property, or of the filing or recordation of the Mortgage, any collateral assignment, or any financing statement. As to the opinions expressed below in this letter, we have assumed the accuracy of and also relied upon (a) the representations and warranties of the Obligors contained in the Loan Documents and in the annexed Certification and (b) the title insurance commitment, report, or policy issued with respect to the Real Estate and delivered to the Lender or its attorneys in connection with the Loan (the "Title Documents "). We have assumed, without independent investigation or review, the accuracy of all the matters disclosed in the Title Documents or any other search received (and delivered to the Lender or its attorneys) in connection with the Obligors or the collateral for the Loan, including, without limitation, those matters relating to the state of title, and the Borrower's title to the collateral, and we are informed that the Lender is relying exclusively on the Title Documents with respect to all matters of title and that this opinion also excepts, as exceptions, all exceptions, violations and defects disclosed in the Title Documents. We have also assumed that all filing and recording fees, required to have been paid in connection with the filing and recording of the security instruments, have been duly paid, and that the Mortgage will be duly recorded in {{{55/COUNTY IN WHICH REAL ESTATE IS LOCATED}}} County, State of {{{56/STATE IN WHICH REAL ESTATE IS LOCATED}}}, and that all Uniform Commercial Code ("UCC ") financing statements will be duly filed where required. 1. Caveats . The opinion giver should also consider adding the following caveats to the opinion letter. These caveats would typically be added at the end of the opinion, and before the signature line. Caveats . For purposes of these opinions, we have assumed each of the following: [a] Value, as defined in the UCC, has been or is being given by the Lender for all collateral described in, and pledged or assigned under, the Loan Documents (other than collateral with respect to which the Lender's lien will be perfected by filing in the real estate records). [b] Valuable consideration has been or is being given by the Lender for the Mortgage. [c] The Lender is the mortgagee, pledgee or assignee of all collateral described in the Loan Documents in good faith and without knowledge of any prior or conflicting interest and without notice of any adverse claim. [d] The Lender has, as of the date of this opinion letter, complied with its obligations under the Loan Documents. [e] If any collateral is a negotiable instrument that is not a "security" (as such term is defined in the UCC), the Lender is a "holder in due course" (as such term is defined in the UCC) of all such collateral. [f] The Lender is a "bona fide purchaser" of any collateral described in the Loan Documents that is a "security" (as such terms are defined in the UCC). [g] There has been no prior release by the Lender of any collateral (or any lien or security interest against any such collateral), or any part thereof or interest therein. [h] None of the collateral described in the Loan Documents consists or will consist of consumer goods, farm products, equipment used in farming operations, crops, timber, minerals, and the like (including oil and gas) or accounts or general intangibles resulting from the sale of any of the foregoing, or a beneficial interest in a trust or decedent's estate. [i] Except as expressly described in this letter, the Borrower has not changed its "location" (for the purpose of Article 9 of the UCC). 3 [j] Except as expressly described in this letter, the Borrower has not changed its name (whether by 3 Some lenders may want the Borrower's counsel to add the following language: Notwithstanding subparagraphs [i] and [j] above, we have had a search performed against the Borrower for the purpose of determining the name of the Borrower, and the "location" of the Borrower under Section 9-307 of the UCC, and, as of _____________, 200__ (the date of such search), in our opinion, the location of the Borrower is in the {{{87/STATE WHOSE LAW GOVERNS}}} and the name of the Borrower is {{{31/BORROWER}}}. amendment of its charter, by reorganization or otherwise) or reorganized in a State other than {{{87/STATE WHOSE LAW GOVERNS}}}, or merged or consolidated with another entity.[k] Our opinions above as to the good standing of any Obligor under the laws of {{{87/STATE WHOSE LAW GOVERNS}}} is based solely on the following Certificates of Good Standing: ________________________________________. We have made no additional investigation after the respective dates of those Certificates in rendering such opinions. [l] All certificated securities, instruments, deposit accounts, or securities accounts which are collateral for the Loan are located in the {{{87/STATE WHOSE LAW GOVERNS}}}. 2. Exclusions . The opinion giver should also consider adding the following exclusions to the opinion letter. These exclusions would typically be added at the end of the opinion, and before the signature line. Exclusions . We express no opinion as to: [a] The validity, binding effect or enforceability of any provision in the Loan Documents that purports to impose on the Lender standards for the care of collateral in the Lender's possession other than as provided in Sections 9-207 to 9-210 of the UCC, or to limit the ability of the Borrower or any other person to transfer voluntarily or involuntarily (by way of sale, creation of a security interest, attachment, levy, garnishment, or other judicial process) its right, title, or interest in or to any collateral subject thereto as contemplated by Section 9-401 of the UCC; [b] The validity, binding effect or enforceability (in connection with any violation of any securities laws or in connection with any willful misconduct or gross negligence of the indemnified party) of any provision of the Loan Documents relating to indemnification; [c] The validity, binding effect or enforceability of (1) any waiver under any of the Loan Documents, or any consent under the Loan Documents, relating to the rights of Borrower or any other person (including, without limitation, marshalling of assets, reinstatement and rights of redemption, if any), or duties owing to it, existing as a matter of law (including, without limitation, any waiver of any provision of the UCC), except to the extent such Borrower or other person may so waive or consent or has effectively waived and consented in accordance with Sections 9-602 and 9-624 of the UCC and other applicable laws, rules or regulations or (2) any provision of the Loan Documents which requires payment of interest, at a rate after maturity or acceleration of the respective liabilities evidenced or secured thereby, in excess of the rate which a court would determine under applicable law to be commercially reasonable and not a penalty;[d] the right, title or interest of any Obligor or any other person or entity, to, or any description of, any collateral subject to the Loan Documents, or any property purporting to be collateral subject to the Loan Documents; [e] the validity, perfection or priority of any security interest or pledge or lien granted under the Loan Documents; [f] the validity, binding effect or enforceability of any provision in any of the Loan Documents which purports (1) to permit the Lender or any other person to sell or otherwise dispose of any collateral described in the Loan Documents or other security or enforce any remedy under the Loan Documents (including, without limitation, any self-help or taking possession remedy), except in compliance with the UCC, and applicable federal, state and local laws, (2) to provide for a security interest in the proceeds of collateral described in the Loan Documents other than pursuant to Sections 9-203)(f) and 9-315 of the UCC, (3) to affect any property or asset of any Obligor or any right or interest with respect thereto other than collateral described in the Loan Documents and located in the State of {{{87/STATE WHOSE LAW GOVERNS}}}, or (4) to restrain the alienability of interests in the collateral or in the Borrower or any other entity other than provisions which permit the Lender to accelerate the final payment date of the Loan if the collateral (or any portion thereof or interest therein) is transferred in violation of the restrictions contained in the Loan Documents; [g] the rights of the lender with respect to any item of collateral of the type listed in Section 9-109(c- d) of the UCC; [h] the compliance of any collateral with the laws, statutes or regulations regarding asbestos or other hazardous substances of any federal, state or local governmental authority having jurisdiction; and any environmental, securities, antitrust, tax, land use, safety, intellectual property, or banking or insurance company laws, rules or regulations applicable to the Lender; [i] the effect of any security interest perfected prior to July 1, 2001 under the UCC or outside of the UCC; and [j] the applicable choice of law rules that may affect (i) the interpretation or enforcement of any of the Loan Documents, or (ii) the attachment or enforcement of any security interest created, or purported to be created, by the Mortgage or any other Loan Document. 3. Supplemental Qualifications As To Enforceability, Etc. The opinion giver should also consider adding the following qualifications, after the numbered opinions set forth in the opinion letter. Our opinions above as to enforceability are subject to the effect of (1) any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally, and (2) general equitable principles (whether considered in a proceeding at law or in equity) and (3) standards of good faith, fair dealing and reasonableness which may be applied by a court to the exercise of certain rights and remedies. Certain provisions of the Loan Documents may be unenforceable if it cannot be demonstrated that the enforcement of such provisions is reasonably necessary for the protection of the Lender. Also, requirements in the Loan Documents specifying that provisions of the documents may only be waived in writing may not be enforced, in certain cases, to the extent that an oral agreement has been agreed to modifying provisions of the Loan Documents. Certain other provisions of the Loan Documents are or may be unenforceable in whole or in part under the laws (including judicial decisions) of the State of {{{87/STATE WHOSE LAW GOVERNS}}} or the federal laws (including judicial decisions) of the United States of America, but (subject to the limitations set forth in the immediately preceding paragraph) the inclusion of such provisions does not affect the validity of the Loan Documents as a whole, and the Loan Documents contain adequate provisions for the practical realization of the principal rights and benefits afforded by the Loan Documents.Article 9 of the UCC generally requires the filing of continuation statements (within the six months immediately preceding the fifth anniversary of the original filing of the UCC financing statements) to maintain effectiveness of such financing statements and perfection of the security interests. Further, additional financing statements may be required to be filed to maintain the perfection of security interests if the Borrower changes its name, identity or structure or changes its location. In the case of property which becomes collateral under any of the Loan Documents after the date of this opinion letter, Section 552 of the Federal Bankruptcy Code limits the extent to which property acquired by a debtor after the commencement of a case under the Federal Bankruptcy Code may be subject to a security interest arising from a security agreement entered into by the debtor before the commencement of such case. The attorneys responsible for the preparation of this opinion letter are members of the Bar of the State of {{{87/STATE WHOSE LAW GOVERNS}}}, and we express no opinion as to the laws of any jurisdiction other than those of the United States of America and the State of {{{87/STATE WHOSE LAW GOVERNS}}}. The opinions expressed in this opinion letter are solely for your benefit and may not be relied upon in any manner or for any purpose by any other person. 6 Multistate Transactions According to Laurence Preble, when a lawyer must give an opinion to a lender in a multistate transaction, the lawyer has at least the following options for the remedies portion of the opinion: - The lawyer may opine that the courts of the opining lawyer's jurisdiction will honor and enforce the choice of law clause and apply the law of the state the parties have selected. - The lawyer may give a remedies opinion under the laws of the selected state based on an assumption that the laws of the selected state are identical to the laws of the opining lawyer's jurisdiction. - The lawyer may give a remedies opinion under the laws of the opining lawyer's own jurisdiction, disregarding the choice of law clause and assuming that the loan transaction will be governed by the laws of the opining lawyer's jurisdiction. Many lawyers resist giving the first opinion because of the perceived time, expense and difficulty of issuing it. The second opinion is based on an obviously inaccurate and possibly misleading assumption. . . . [The third opinion] may be the most useful and cost effective result for the parties. Preble, "Choice of Law Opinions: Making the Right Choice," 11 Prob. & Prop., July/Aug. 1997, at 13, 16. CERTIFICATE BY BORROWER