Borrower Opinion

(Massachusetts Sample)

Document 5037B www.leaplaw.com

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[LENDER NAME] [LENDER ADDRESS]

Re: []

Ladies and Gentlemen:

We represent: (a) [NAME OF BORROWER], a ______[ corporation/limited liability company] (the “Borrower”), (b) [NAME OF PROPERTY OWNER], a ______[corporation/limited liability company] (the “Property Owner”), of which the Borrower is the [sole member], and which itself is the owner of certain real property known as [NAME OF PROPERTY] [LOCATION] (the “Real Property”), and (c) [INSERT GUARANTORS NAMES] (individually each a “Guarantor” and referred to herein, collectively, as the “Guarantors”) in connection with a loan in the stated principal amount of $______(the “Loan”) made by ______(the “Lender”) to Borrower as of the date hereof. This opinion is rendered to you as a condition of your making the Loan.

In connection with this opinion, we have examined and relied on copies of each of the following (including the documents listed below which evidence and secure the Loan each of which are dated as of [DATE] unless otherwise indicated below):

1. Limited Liability Company Agreement/Limited Partnership Agreement of the Borrower dated ______.

2. Certified copy of [CERTIFICATE OF FORMATION] of the Borrower dated [DATE], issued by the Secretary of State of the State of [STATE] on [DATE].

3. Certificate of Good Standing of the Borrower issued by the Secretary of State of the State of [STATE] dated [DATE].

4. Certificate of registration of Borrower as a foreign [corporation/limited liability company] issued by the Secretary of State of the State of [STATE] dated [DATE].

5. [Limited Partnership Agreement/ operating agreement/bylaws] of the Property Owner dated [DATE].

6. Certified copy of [CERTIFICATE OF FORMATION] of the Property Owner dated [DATE], issued by the Secretary of State of the State of [STATE] on [DATE].

7. Certificate of Good Standing of the Property Owner issued by the Secretary of State of [STATE] dated [DATE].

8. Certificate of registration of Property Owner as a foreign [limited liability company/corporation] issued by the Secretary of State of the State of [STATE] dated [DATE]

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9. Loan Agreement (the “Loan Agreement”), between the Borrower and the Lender dated [DATE].

10. (the “Note”) in the stated principal amount of [AMOUNT] of the Borrower payable to the Lender.

11. Pledge Agreement (the “Pledge”) executed by the Borrower, as pledgor, in favor of the Lender, pledging the membership interests in the Property Owner to Lender.

12. UCC-1 Financing Statement (the “Financing Statement”) naming the Borrower as Debtor and naming the Lender as Secured Party.

13. Power of Attorney, executed by the Borrower in favor of the Lender (the “Power of Attorney”).

14. A Environmental Indemnification Agreement executed by the Borrower and the Guarantors (the “Indemnity”)

15. A Guaranty (Non-Recourse Carve-Outs) executed by the Guarantors for the benefit of the Lender (the “Guaranty”).

16. [List other documents and instruments pertaining to the transaction, if applicable]

The Loan Agreement, the Note, the Pledge, the Financing Statement, the Power of Attorney, the Indemnity, and the Guaranty [and OTHER DOCUMENTS] are hereinafter collectively referred to as the “Loan Documents.” Unless otherwise defined in this letter or unless the context otherwise requires, capitalized terms defined in the Loan Agreement shall have the same meanings in this letter.

In addition to the Loan Documents, we have examined such records, documents, instruments, certificates of public officials and of representatives of the Borrower, the Property Owner and the Guarantors, made such inquiries of officials of the Borrower, the Property Owner and the Guarantors, and considered such questions of law as we have deemed necessary for the purpose of rendering the opinions set forth herein.

We have assumed the genuineness of all signatures except for those signatures on the Loan Documents of the persons signing the Loan Documents on behalf of the Borrower and the signature of Guarantors on the Guaranty. We also have assumed the authenticity and completeness of all items submitted to us as originals, the conformity with originals of all items submitted to us as copies and the accuracy and completeness of all records made available to us by the Borrower or the Guarantors. We have assumed, without investigation, that any certificate or other document on which we have relied that was given or dated earlier than the date of this letter continued to remain accurate insofar as relevant to our opinions from such earlier date through and including the date of this letter. In making our examination of the Loan Documents, we have assumed that the Lender was in legal existence and had the power to enter into the

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Mezzanine Loan transaction and perform its obligations under the Loan Documents; the due authorization by all requisite action and the due execution and delivery of the Loan Documents by the Lender; the validity and binding effect thereof on the Lender; and that any person acting on behalf of the Lender was duly authorized to act in that capacity. We have assumed the legal capacity of natural persons. We have assumed that there are no agreements or understandings among the parties, written or oral, and there is no usage of trade or course of prior dealing among the parties that would, in either case, define, supplement, or qualify the terms of the Loan Documents.

We also have assumed that the Lender is relying on the Guaranty and would not enter into the Mezzanine Loan in the absence of the Guaranty; that the Loan Documents and the Guaranty have been delivered concurrently on the closing date; and that the Lender has delivered to the Borrower upon closing funds to be paid pursuant to the Loan Documents.

Based upon and subject to the foregoing and any further qualifications set forth below, we are of the opinion that:

(a) The Property Owner is a [limited liability company/limited partnership] validly existing and in good standing under the laws of the State of [STATE] and has full power and authority under its [Operating/Limited Partnership] Agreement and Certificate of [Formation/Limited Partnership] to enter into and perform its obligations under certain loan documents which it is entering into effective as of the date hereof. Based solely on the Certificate of registration of foreign [limited liability company/partnership] referred to in Item ____ above, the Property Owner has duly registered as a foreign limited liability company doing business in the State of ______.

(b) The Borrower is a [limited liability company/limited partnership] validly existing and in good standing under the laws of the State of [STATE] and has full power and authority under its [Operating/Limited Partnership] Agreement and Certificate of [Formation/Limited Partnership] to enter into and perform its obligations under the Loan Documents. Based solely on the Certificate of registration of foreign [limited liability company/partnership] referred to in Item ____ above, the Borrower has duly registered as a foreign [corporation/limited liability company/limited partnership] doing business in the State of [STATE].

(c) The execution, delivery and performance of each of the Loan Documents by Borrower have been duly authorized by all requisite action by the members of the limited liability company, and each of the Loan Documents has been duly executed and delivered by Borrower.

(d) [Massachusetts counsel] The Loan Documents constitute valid and binding obligations of the Borrower and the Guarantors, as applicable, and are enforceable against the Borrower and the Guarantors, as applicable, in accordance with their respective terms. The opinion expressed in this paragraph (c) is subject to each of the following further qualifications:

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(i) Our opinion is subject to the effect of bankruptcy, insolvency, fraudulent transfer, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights of creditors generally.

(ii) The enforceability of the Loan Documents is subject to limitations imposed by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(iii) Certain remedies, waivers, and other provisions of the Loan Documents may not be enforceable, but such unenforceability does not render the Loan Documents invalid as a whole or preclude the practical realization of the principal benefits intended to be provided by the Loan Documents.

(e) The Borrower’s execution and delivery of the Loan Documents and the Borrower’s performance and observance of and compliance with the provisions of the Loan Documents will not (i) violate or result in any breach of any of the terms, conditions or provisions of or constitute a under any indenture, mortgage, deed of trust or other agreement to which the Borrower or Property Owner is a party or by which the Borrower or Property Owner is otherwise bound, or (ii) result in the creation of any lien, charge or encumbrance on any property or assets of the Borrower.

(f) The Borrower’s execution and delivery of the Loan Documents and the Borrower’s performance and observance of and compliance with the provisions of the Loan Documents will not (i) violate or result in any breach of any of the terms, conditions or provisions of or constitute a default under any indenture, mortgage, deed of trust or other agreement reviewed by us during that examination, or (ii) result in the creation of any lien, charge or encumbrance on any property or assets of Borrower, contrary or pursuant to the terms of any indenture, mortgage, deed of trust or other agreement reviewed by us during that examination.

(g) The Borrower’s execution and delivery of the Loan Documents and the Lender’s performance and observance of and compliance with the provisions of the Loan Documents will not violate any existing law or regulation or any order known to us of any court or administrative agency by which the Lender is bound or to which it is subject, except that we render no opinion as to laws, regulations or orders applicable to construction or operation of any improvements to or constituting a portion of the Real Property, including, without limitation, building, rent control, zoning or environmental laws or regulations.

(h) The Pledge creates a valid security interest in the described in the Pledge in favor of Lender. The filing of the Financing Statement in the office of [SECRETARY OF STATE] is sufficient to perfect the security interest created by the Pledge in the collateral described in Pledge.

(i) To our knowledge, but without any independent investigation other than inquiry of ______, the Borrower’s ______, there is no action, suit, proceeding or

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investigation pending or threatened against Borrower or the Property Owner that, if adversely determined as of the date hereof, would either in any single case or in the aggregate, materially and adversely affect the Borrower’s financial condition or the Property Owner’s financial condition.

(j) [Counsel in the jurisdiction where the property is located] The Loan, as evidenced by the Note, does not violate in any manner the usury laws of the State of [STATE] and all charges required to be paid under the Loan Documents (including, but not limited to prepaid interest, service charges, participation payments, additional interest, commitment fees, brokerage fees, interest reserves, reserve amounts, reserves for taxes and insurance, loan management fees and all charges contemplated thereunder, if any) are neither illegal nor usurious in any manner under the laws of the State of [STATE] or Federal law.

(k) [Counsel in the jurisdiction where the property is located] A court in [STATE] applying choice of law principals under [STATE] law would recognize the choice of Massachusetts law to govern the Loan Documents except for issues regarding the perfection and enforcement of the lien upon the collateral granted by the Pledge Agreement.

(l) [Massachusetts counsel] The Loan Documents provide that they will be governed by the laws of the Commonwealth of Massachusetts. The Supreme Judicial Court of the Commonwealth of Massachusetts has stated that courts in Massachusetts should ordinarily honor the choice of law specified by the parties to a if such parties or the transaction that is the subject of the contract have or has a reasonable nexus to the jurisdiction whose law is specified and in the absence of factors which for Massachusetts public policy reasons indicate that the specified choice should not be honored. In addition, Section 1-105 of the Massachusetts Uniform Commercial Code provides that when a transaction bears a “reasonable relation” to Massachusetts and also to another state or nation, the parties may agree that the law either of Massachusetts or of such other state or nation shall govern their rights and duties. Although we cannot predict with certainty the manner in which a Massachusetts court would resolve this question, we are not aware of any factors which for Massachusetts public policy reasons indicate that the specified choice of Massachusetts law should not be honored, and we therefore believe that a Massachusetts court should, in a properly presented case, honor the parties’ choice of Massachusetts law in construing the Loan Documents.

Our examination of law relevant to the matters herein is limited to the laws of the State of ______and Federal law [and the General Corporation Law of the State of [STATE/Revised Uniform Limited Partnership Act/Limited Liability Company Act as in effect in the State of [STATE]]. We have not made an independent review of the laws of any state other than [STATE] [and the aforesaid laws of the State of [STATE]. Accordingly, we express no opinion as to the matters governed by the laws of any other state or jurisdiction.

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This opinion is furnished by us as counsel for the Borrower, the Property Owner and the Guarantors solely in connection with the Loan and may be relied upon only by you and by transferees of the Note and solely in connection with the Loan.

Very truly yours,

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