Exhibit 8.1
[Letterhead of Skadden, Arps, Slate, Meagher & Flom LLP]
October 28, 2003
Newcastle Investment Corp.
1251 Avenue of Americas
New York, New York 10020
Re: Certain Federal Income Tax Matters
Ladies and Gentlemen:
You have requested our opinion concerning certain Federal income tax
consequences of an investment in stock or other securities of Newcastle
Investment Corp., a Maryland corporation ("Newcastle"), as described in a
Registration Statement on Form S-3 (No. 333-109597) filed with the Securities
and Exchange Commission (the "Commission"), as amended through the date hereof
(the "Registration Statement").
We have acted as tax counsel to Newcastle in connection with the
preparation and filing of the Registration Statement and certain other
documents. In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of the
Registration Statement and such other documentation and information provided by
you as we have deemed necessary or appropriate as a basis for the opinion set
forth herein. In addition, you have provided us with, and we are relying upon, a
certificate containing certain factual representations and covenants of officers
of Newcastle (the "Officers' Certificate") relating to, among other things, the
actual and proposed operations of Newcastle and the entities in which it holds,
or has held, a direct or indirect interest (collectively, the "Company"). For
purposes of our opinion, we have not made an independent investigation of the
facts, representations and covenants set forth in the Officers' Certificate, the
Registration Statement, or in any other document. In particular, we note that
the Company has engaged in, and may engage in, transactions in connection with
which we have not provided legal advice, and have not reviewed, and of which we
may be unaware. We have, consequently, assumed and relied on your
representations that the information presented in the Officers' Certificate,
Registration Statement and other documents, or otherwise furnished to us,
accurately and completely describes all material facts relevant to our opinion.
We have assumed that such statements, representations and covenants are true
without regard to any qualification as to knowledge or belief. Our opinion is
conditioned on the continuing
Newcastle Investment Corp.
October 29, 2003
Page 2
accuracy and completeness of such statements, representations and covenants. Any
material change or inaccuracy in the facts referred to, set forth, or assumed
herein or in the Officers' Certificate may affect our conclusions set forth
herein. We have, at your request, also relied upon: (i) the opinion of Brown &
Wood LLP, dated May 5, 1999, regarding the qualification of Impac Commercial
Holdings, Inc. as a real estate investment trust ("REIT"), (ii) the opinion of
Thacher Proffitt & Wood, dated July 22, 1999, in connection with the issuance of
certain notes by Fortress CBO Investments I, Limited and Fortress CBO
Investments I Corp., (iii) the opinion of Sidley & Austin, dated November 17,
1999, in connection with the issuance of certain certificates by Fortress
Commercial Mortgage Trust 1999-PC1, (iv) the opinion of Sidley & Austin, dated
May 27, 1999, in connection with the issuance of certain certificates by
Government Lease Trust, (v) the opinion of Sidley Austin Brown & Wood, dated
December 31, 2001, in connection with the issuance of certain notes by FIC GSA
Mezzanine Borrower LLC and FIC Houston LLC, and (vi) the opinion of Thacher
Proffitt & Wood, dated July 12, 2002, in connection with the issuance of certain
bonds by Impac CMB Trust 1998-C1, each of which opinions is included in an
exhibit to the Registration Statement.
In our review of certain documents in connection with our opinion as
expressed below, we have assumed the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified, conformed or photostatic copies, and the authenticity of the
originals of such copies. Where documents have been provided to us in draft
form, we have assumed that the final executed versions of such documents will
not differ materially from such drafts.
Our opinion is also based on the correctness of the following
assumptions: (i) Newcastle and each of the entities comprising the Company has
been and will continue to be operated in accordance with the laws of the
jurisdiction in which it was formed and in the manner described in the relevant
organizational documents, (ii) there will be no changes in the applicable laws
of the State of Maryland or of any other jurisdiction under the laws of which
any of the entities comprising the Company have been formed, and (iii) each of
the written agreements to which the Company is a party will be implemented,
construed and enforced in accordance with its terms.
In rendering our opinion, we have considered and relied upon the
Internal Revenue Code of 1986, as amended (the "Code"), the regulations
promulgated thereunder ("Regulations"), administrative rulings and other
interpretations of the Code and the Regulations by the courts and the Internal
Revenue Service ("IRS"), all as they exist at the date hereof. It should be
noted that the Code, Regulations, judicial decisions, and administrative
interpretations are subject to change at any time and, in some circumstances,
with retroactive effect. A material change that is made after the date hereof in
any of the foregoing bases for our opinion could affect our conclusions set
forth herein.
Newcastle Investment Corp.
October 29, 2003
Page 3
In this regard, an opinion of counsel with respect to an issue represents
counsel's best judgment as to the outcome on the merits with respect to such
issue, is not binding on the IRS or the courts, and is not a guarantee that the
IRS will not assert a contrary position with respect to such issue or that a
court will not sustain such a position if asserted by the IRS.
We express no opinion as to the laws of any jurisdiction other than
the Federal laws of the United States of America to the extent specifically
referred to herein.
Based on the foregoing, we are of the opinion that, commencing with
Newcastle's initial taxable year that ended on December 31, 2002, Newcastle was
organized in conformity with the requirements for qualification as a REIT under
the Code, and its actual method of operation through the date of this letter has
enabled, and its proposed method of operation will enable it to meet the
requirements for qualification and taxation as a REIT. As noted in the
Registration Statement, Newcastle's qualification and taxation as a REIT depend
upon its ability to meet, through actual annual operating results, certain
requirements including requirements relating to distribution levels and
diversity of stock ownership, and the various qualification tests imposed under
the Code, the results of which are not reviewed by us. Accordingly, no assurance
can be given that the actual results of Newcastle's operation for any one
taxable year satisfy the requirements for taxation as a REIT under the Code.
We express no opinion on any issue relating to Newcastle or any
investment therein, other than as expressly stated above.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to Skadden, Arps, Slate, Meagher &
Flom LLP under the caption "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Commission. This opinion is
expressed as of the date hereof, and we disclaim any undertaking to advise you
of any subsequent changes in the matters stated, represented, or assumed herein,
or of any subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate, Meager & Flom LLP
BROWN & WOOD LLP
815 CONNECTICUT AVENUE, N.W.
WASHINGTON, D.C. 20006-4004
TELEPHONE: 202-973-0600
FACSIMILE: 202-223-0485
May 5, 1999
Fortress Partners L.P.
1301 Avenue of the Americas
42nd Floor
New York, New York 10019
Re: Impac Commercial Holdings, Inc.
Ladies and Gentlemen:
We have acted as tax counsel for Impac Commercial Holdings, Inc., a
Maryland corporation (the "Company") in connection with the issuance and sale of
an aggregate of 479,999 shares (the "Shares") of the Company's Series B 8.5%
Cumulative Convertible Preferred Stock, $.01 par value per share (the "Series B
Preferred Stock"), pursuant to a stock purchase agreement dated May 5, 1999,
between the Company and Fortress Partners L.P. (the "Stock Purchase Agreement").
This opinion is being rendered to you pursuant to Section 5.16 of the Stock
Purchase Agreement.
The opinion set forth in this letter is based on relevant provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations
thereunder, and interpretations of the foregoing by the Internal Revenue Service
and the courts, all of which are subject to change either prospectively or
retroactively.
In our capacity as tax counsel to the Company, we have made such legal
and factual examinations and inquiries, including an examination of originals or
copies certified or otherwise identified to our satisfaction of such documents,
corporate records and other instruments as we have deemed necessary or
appropriate for purposes of this opinion. In our examination, we have assumed
the authenticity of all documents submitted to us as originals, the genuineness
of all signatures thereon, the legal capacity
of persons executing such documents and the conformity to authentic original
documents of all documents submitted to us as copies.
In addition to such examination, our opinion is also premised on
certain written representations of the Company contained in a letter to us dated
as of the date hereof (the "Officer's Certificate").
Based on such facts, assumptions and representations, it is our opinion
that:
Commencing with the Company's taxable year ended December 31,
1997, the Company has been and continues to be organized in
conformity with the requirements for qualification as a "real
estate investment trust," within the meaning of the Code and
its method of operation has enabled and will enable it to meet
the requirements for qualification and taxation as a "real
estate investment trust" under the Code.
We are opining herein only as to the effect of the federal income tax
laws of the United States and we express no opinion with respect to the
applicability thereto, or the effect thereon, of other federal laws, the laws of
any state or other jurisdiction or as to any matters of municipal law or the
laws of any other local agencies within any state.
This opinion is only being rendered to you as of the date of this
letter and Brown & Wood LLP undertakes no obligation to update this opinion if
there are changes in the facts or the law subsequent to such date.
Furthermore, this opinion is rendered only to you and is solely for
your benefit in connection with the transaction described above. This opinion
may not be relied upon by you for any other purpose, or furnished to, quoted to,
or relied upon by any other person, firm or corporation for any purpose, without
our prior written consent.
Very truly yours,
/s/ Brown & Wood LLP
2
[Sidley & Austin Letterhead]
May 27, 1999
Bear, Stearns & Co. Inc. MBIA Insurance Corporation
245 Park Avenue 113 King Street
New York, New York 10167 Armonk, New York 10504
Fortress Investment Corp. Moody's Investors Service, Inc.
c/o Fortress Investment Group 99 Church Street
1301 Avenue of the Americas New York, New York 10007
New York, New York 10019
Fortress GSA Properties Holdings L.L.C. Standard & Poor's Rating Services
c/o Fortress Investment Group 25 Broadway
1301 Avenue of the Americas New York, New York 10004
New York, New York 10019
Fortress GSA Securities L.L.C. State Street Bank and Trust Company
c/o Fortress Investment Group Two International Place, Fifth Floor
1301 Avenue of the Americas Boston, Massachusetts 02110
New York, New York 10019
Re: Government Lease Trust, Lease-Backed Pass-Through
Certificates, Series 1999-GSAl, and Commercial
Mortgage Pass-Through Certificates, Series 1999-C1
Ladies and Gentlemen:
We have acted as special counsel to Fortress GSA Securities L.L.C. (the
"Depositor"), Fortress Investment Corp. ("Fortress Investment"), Fortress GSA
Properties Holdings L.L.C. ("Fortress Holdings") and each of the Borrowers
(defined below) in connection with the following transactions (collectively, the
"Transactions"):
(i) the sale by Meridian Funding Company, LLC ("Meridian"), and the
purchase by the Depositor, of a mortgage loan made pursuant to that certain Loan
Agreement (the "Meridian Loan Agreement"), dated as of July 31, 1998, between
Meridian, Bankers Trust Company, as collateral agent (the "Collateral Agent")
and the Borrowers named therein;
Bear, Stearns & Co. Inc.
Fortress Investment Corp.
Fortress GSA Properties Holdings L.L.C.
Fortress GSA Securities L.L.C.
Moody's Investors Service, Inc.
Standard & Poor's Rating Services
MBIA Insurance Corporation
State Street Bank and Trust Company
May 27, 1999
Page 2
(ii) the sale by Fleet National Bank, and the purchase by the
Depositor, of a mortgage loan made pursuant to that certain Loan Agreement (the
"Fleet Loan Agreement"), dated as of March 4, 1999, between Fleet National Bank,
as agent, and the San Diego Borrower;
(iii) the execution and delivery by the Depositor and the Borrowers of
that certain Amended and Restated Loan Agreement (the "New Loan Agreement"),
dated as of May 27, 1999, between the Depositor, Bankers Trust Company, as
collection agent, and the Borrowers, pursuant to which, among other things, (a)
the indebtedness evidenced by the promissory note made pursuant to the Meridian
Loan Agreement and the indebtedness evidenced by the promissory note made
pursuant to the Fleet Loan Agreement were combined and consolidated into a
single, consolidated indebtedness (collectively with the additional advances
described in clause (c) below, the "New Loan"), (b) the terms of the Meridian
Loan Agreement and the Fleet Loan Agreement were amended and restated in their
entirety and (c) provision was made for an additional advance as described
therein;
(iv) the creation of a common law trust (the "Trust"), and the
issuance to the Depositor by the Trust of an aggregate $223,245,400 Certificate
Principal Balance of Lease-Backed Pass-Through Certificates, Series 1999-GSA1
(the "Class A Certificates"), consisting of four classes designated Class A-1,
Class A-2, Class A-3 and Class A-4, and an aggregate $175,870,728 Certificate
Principal Balance of Commercial Mortgage Pass-Through Certificates, Series
1999-C1 (the "Class B Certificates" and, together with the Class A Certificates,
the "Certificates"), consisting of three classes designated Class B-1, Class B-2
and Class B-3, pursuant to the Trust and Servicing Agreement, dated as of May
27, 1999 (the "Trust Agreement"), between the Depositor as depositor, Fortress
Holdings as primary advancer, Midland Loan Services, Inc. as servicer (in such
capacity, the "Servicer") and special servicer, and State Street Bank and Trust
Company as trustee (in such capacity, the "Trustee");
(v) the transfer of the Mortgage Loan by the Depositor to the Trust,
pursuant to the Trust Agreement, in exchange for the Certificates;
(vi) the execution and delivery by MBIA Insurance Corporation
("MBIA"), the Depositor and Fortress Investment of an Insurance and
Reimbursement Agreement (the "I&R Agreement"), dated as of May 27, 1999 and of
its financial guaranty insurance policy in favor of the Trustee for the benefit
of the holders of the Class A Certificates, the holders of the Class B
Certificates, the Servicer and the Trustee, in its individual capacity;
(vii) the execution by Fortress Investment of and delivery to MBIA of
the Indemnification Agreement dated as of May 27, 1999 (the "Indemnification
Agreement");
Bear, Stearns & Co. Inc.
Fortress Investment Corp.
Fortress GSA Properties Holdings L.L.C.
Fortress GSA Securities L.L.C.
Moody's Investors Service, Inc.
Standard & Poor's Rating Services
MBIA Insurance Corporation
State Street Bank and Trust Company
May 27, 1999
Page 3
(viii) the sale by the Depositor, and the purchase by Bear, Stearns &
Co. Inc,, of the Certificates pursuant to the Certificate Purchase Agreement,
dated as of May 27, 1999, between the Depositor, Fortress Investment and the
Initial Purchaser;
(ix) the execution and delivery by Fortress Investment of that
certain Guaranty Agreement dated as of May 27, 1999 (the "Repurchase Guaranty");
and
(x) the execution and delivery by Fortress Investment of that
certain Advance Guaranty Agreement, made in favor of the Trustee on behalf of
the Certificateholders and dated as of May 27, 1999 (the "Advance Guaranty").
The New Loan Agreement, the Loan Documents (as defined in the New Loan
Agreement), the Trust Agreement, the I&R Agreement, the Certificate Purchase
Agreement and the Advance Guaranty are collectively referred to herein as the
"Agreements". Capitalized terms not defined herein have the respective meanings
set forth in the Trust Agreement and, to the extent not defined therein, in the
other Agreements.
For purposes of this opinion letter, we have reviewed the Agreements,
the GSA Leases and the Private Offering Memorandum, dated May 25, 1999, relating
to the Trust and the Certificates (including all exhibits and annexes thereto,
the "Private Offering Memorandum"). We have also examined originals or copies,
certified or otherwise identified to our satisfaction, of such other documents
and records as we have deemed relevant or necessary as the basis for this
opinion. We have obtained such certificates from and made such inquiries of
officers and representatives of the parties to the Agreements as we have deemed
relevant or necessary as the basis for such opinion. We have relied upon, and
assumed the accuracy of, such other documents and records, such certificates and
the statements made in response to such inquiries, with respect to the factual
matters upon which the opinions contained herein are based. We have also assumed
a (i) the truthfulness and accuracy of each of the representations and
warranties as to factual matters contained in the Agreements, (ii) the legal
capacity of natural persons, (iii) the genuineness of all signatures and the
authenticity of all documents submitted to us as originals, (iv) the conformity
to the originals of all documents submitted to us as certified, conformed or
photostatic copies, (v) the due authorization by all necessary action, and the
due execution and delivery, of the Agreements by the parties thereto, (vi) the
constitution of each of the Agreements as the legal, valid and binding
obligation of each party thereto (other than the Depositor, Fortress Investment,
Fortress Holdings and the respective Borrowers), enforceable against each such
party in accordance with its terms, and (vii) the absence of any other agreement
that supplements or otherwise modifies the agreements expressed in the
Agreements. We have also assumed that each of the Depositor, Fortress Holdings
and each Borrower has been duly organized and is validly existing in good
standing under the laws of its state of
Bear, Stearns & Co. Inc.
Fortress Investment Corp.
Fortress GSA Properties Holdings L.L.C.
Fortress GSA Securities L.L.C.
Moody's Investors Service, Inc.
Standard & Poor's Rating Services
MBIA Insurance Corporation
State Street Bank and Trust Company
May 27, 1999
Page 4
incorporation or formation with full power and authority to enter into and
perform its obligations under the each of the Agreements to which it is a party.
The bases for that assumption, and the due authorization, by all necessary
action, and the execution and delivery by each of the Depositor, Fortress
Holdings and each Borrower, of any Agreement to which any of them is a party, is
the subject of our separate opinion of even date herewith. With respect to each
GSA Lease, we have assumed that (i) such GSA Lease, and all amendments thereto
and all novations and supplements thereof (collectively, the "GSA Lease
Documents") were executed and delivered on behalf of the General Services
Administration by a contracting officer as to which, at the time of the
execution and delivery of the GSA Lease and any other GSA Lease Document, a
contracting officer warrant ("Warrant") had been issued, and was in effect, duly
appointing him or her as a contracting officer with authority for the United
States of America, (ii) such contracting officer had obtained all requisite
approvals and authorizations prior to the execution of the related GSA Lease and
any other GSA Lease Documents and (iii) in executing the related GSA Lease and
any other GSA Lease Documents, such contracting officer was acting within the
scope of his or her Warrant.
In rendering the opinions below, we do not express any opinion
concerning the laws of any jurisdiction other than the substantive laws of the
State of New York, the General Corporation Law of the State of Delaware and,
where expressly referred to below, the federal laws of the United States of
America.
Based upon the foregoing, we are of the opinion that:
1. Each of the Agreements to which any of the Depositor,
Fortress Investment, Fortress Holdings or any Borrower is a
party and that is governed by New York law constitutes a
valid, legal and binding agreement of such party, enforceable
against such party in accordance with its terms, except as
such enforceability may be limited by (a) bankruptcy,
insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the
enforcement of the rights of creditors generally, (b) general
principles of equity, regardless of whether enforcement is
sought in a proceeding in equity or at law, and (c) public
policy considerations underlying any law, rule or regulation
(including any federal or state securities laws) to the
extent that the same limit the enforceability of any
provisions of such Agreements that purport or are construed
to provide indemnification or contribution; and provided that
certain of the remedial provisions, including waivers, with
respect to the exercise of remedies contained in the New Loan
Agreement may be
Bear, Stearns & Co. Inc.
Fortress Investment Corp.
Fortress GSA Properties Holdings L.L.C.
Fortress GSA Securities L.L.C.
Moody's Investors Service, Inc.
Standard & Poor's Rating Services
MBIA Insurance Corporation
State Street Bank and Trust Company
May 27, 1999
Page 5
unenforceable in whole or in part, but the inclusion of such
provisions does not affect the validity of the New Loan
Agreement, taken as a whole, and together with applicable
law, the New Loan Agreement contains adequate provisions for
the practical realization of the benefits of the security
provided thereby.
2. Each GSA Lease is a valid and binding obligation of the
United States, enforceable against the United States in
accordance with its terms.
3. The payment of rent and other charges, if any, by the United
States under each GSA Lease is not subject to annual
appropriations by the United States Congress, and the
obligation to make such payments is a general obligation of
the United States. If any payments that are properly due and
owing to a Borrower under any GSA Lease are not made, such
Borrower would be entitled to enforce the payment obligations
of the United States in accordance with the terms of such GSA
Lease.
4. Assuming the filing, pursuant to (i) the Federal Assignment
of Claims Act, 31 U.S.C. Sec. 3727, and the regulations
promulgated thereunder, 48 C.F.R. Chapter 1, Subpart 32.8 and
Chapter 5, Subpart 532.8 (in the case of claims arising under
such leases) and (ii) the Federal Assignment of Contracts
Act, 41 U. S. C. Section 15 (in the case of the leases as
contracts) (together, the "Assignment Acts"), of (a) with
respect to each GSA Lease in favor of a Meridian Borrower
(or, in the case of the GSA Lease in favor of San Diego
Borrower, from the San Diego Borrower), a Notice of Release
of Assignment (a copy of the form of which is attached
hereto), in accordance with 48 C.F.R. Section 32.805, each
with a true copy of the instrument releasing the assignment
of such GSA Lease to the Collateral Agent annexed thereto and
(b) with respect to each GSA Lease, the Notices of Assignment
(a copy of the form of which is attached hereto), in
accordance with 48 C.F.R. Section 32.805, each with a true
copy of the instrument assigning such GSA Lease from the
related Meridian Borrower (or, in the case of the GSA Lease
in favor of the San Diego Borrower, from the San Diego
Borrower) to the Trustee annexed thereto, with (x) the
applicable contracting officer or the Administrator of the
General Services Administration, (y) the surety under any
surety bonds applicable to such contracts or claims and (z)
the disbursing officer designated in each such contract to
make payment, and further assuming
Bear, Stearns & Co. Inc.
Fortress Investment Corp.
Fortress GSA Properties Holdings L.L.C.
Fortress GSA Securities L.L.C.
Moody's Investors Service, Inc.
Standard & Poor's Rating Services
MBIA Insurance Corporation
State Street Bank and Trust Company
May 27, 1999
Page 6
that the collateral assignment of each GSA Lease to the
Trustee would otherwise be a valid and enforceable assignment
under applicable state law (as to which no opinion is given),
the Trustee will be entitled to the protection afforded by
the Assignment Acts and the regulations promulgated
thereunder.
5. The Certificates, when duly and validly executed,
authenticated and delivered in accordance with the Trust
Agreement and paid for in accordance with the Certificate
Purchase Agreement, will be entitled to the benefits of the
Trust Agreement.
6. None of the sale of the Certificates to the Initial Purchaser
pursuant to the Certificate Purchase Agreement or the
consummation of any of the other transactions contemplated by
or the fulfillment by the Depositor of the terms of the
Agreements to which the Depositor is a party, will conflict
with or result in a breach or violation of any term or
provision of the certificate of formation or operating
agreement of the Depositor, or any federal or State of New
York statute or regulation, known to us to be applicable,
generally, to transactions of the nature contemplated by the
Agreements, except we express no opinion as to compliance
with the securities laws of the State of New York or any
other particular State in connection with the purchase and
the offer and sale of the Certificates by the Initial
Purchaser.
7. The consummation of any of the transactions contemplated by
or the fulfillment by the Depositor, Fortress Investment,
Fortress Holdings or any Borrower of the terms of the
Agreements to which the Depositor, Fortress Investment,
Fortress Holdings or any Borrower is a party, will not
conflict with or result in a breach or violation of any term
or provision of (a) except in the case of Fortress
Investment, as to which as no opinion is given, the
certificate of formation or operating agreement of any such
party, or (b) any federal or State of New York statute or
regulation known to us to be applicable, generally, to
transactions of the nature contemplated by the Agreements.
8. No consent, approval, authorization or order of any federal
or State of New York or State of Delaware court, agency or
other governmental body known to us to be applicable,
generally, to transactions of the nature contemplated by the
Agreements is required for the consummation by the
Bear, Stearns & Co. Inc.
Fortress Investment Corp.
Fortress GSA Properties Holdings L.L.C.
Fortress GSA Securities L.L.C.
Moody's Investors Service, Inc.
Standard & Poor's Rating Services
MBIA Insurance Corporation
State Street Bank and Trust Company
May 27, 1999
Page 7
Depositor, Fortress Investment or Fortress Holdings of the
transactions contemplated by the terms of the Agreements,
except such as may be required under the securities laws of
the State of New York and other particular States in
connection with the purchase and the offer and sale of the
Certificates by the Initial Purchaser, as to which we express
no opinion, except the filings described in paragraph 4 above
and except such as have been obtained.
9. The Trust Agreement is not required to be qualified under the
Trust Indenture Act of 1939, as amended. The Trust is not
required to be registered under the Investment Company Act of
1940, as amended.
10. The statements set forth in the Private Offering Memorandum
under the heading "Description of the Certificates" and
"Description of the Trust Agreement", insofar as such
statements purport to summarize certain material provisions
of the Certificates and the Trust Agreement, provide a fair
and accurate summary of such provisions.
11. The statements set forth in the Private Offering Memorandum
under the headings "Certain Federal Income Tax Consequences",
"ERISA Considerations" and "Legal Investment", to the extent
that they purport to describe certain matters of federal law
or legal conclusions with respect thereto, while not
discussing all possible consequences of an investment in the
Certificates to all investors, provide a fair and accurate
summary of such matters and conclusions set forth under such
headings.
12. The offer and sale of the Certificates by the Depositor to
the Initial Purchaser, and by the Initial Purchaser to
investors that purchase from the Initial Purchaser, in the
manner contemplated in the Private Offering Memorandum, the
Certificate Purchase Agreement and the Trust Agreement,
assuming (a) the accuracy of the Initial Purchaser's and the
Depositor's respective representations and warranties
contained in the Certificate Purchase Agreement, (b) the
accuracy in each case of the representations and warranties
required to be made under the heading "Notice to Investors"
in the Private Offering Memorandum and (c) the performance of
the Initial Purchaser's and the Depositor's respective
covenants contained in the Certificate Purchase Agreement,
are transactions that do not require registration of the
Certificates under the Securities Act of 1933, as amended.
Bear, Stearns & Co. Inc.
Fortress Investment Corp.
Fortress GSA Properties Holdings L.L.C.
Fortress GSA Securities L.L.C.
Moody's Investors Service, Inc.
Standard & Poor's Rating Services
MBIA Insurance Corporation
State Street Bank and Trust Company
May 27, 1999
Page 8
13. Assuming compliance with all the provisions of the Trust
Agreement, for City and State of New York income and
corporation franchise tax purposes, the Trust will be exempt
from all City and State of New York taxation imposed on its
income, franchise or capital stock, and its assets will not
be included in the calculation of any City or State of New
York franchise tax liability.
14. Assuming compliance with all the provisions of the Trust
Agreement, the arrangement under which the Trust Fund is
created will be classified as a grantor trust under subpart
E, part I of subchapter J of the Internal Revenue Code of
1986 (the "Code") and not as a partnership, an association or
a publicly traded partnership taxable as a corporation or a
taxable mortgage pool.
15. The Certificates will be characterized as evidencing
ownership interests in the Mortgage Loan and as constituting
interests in "stripped bonds" within the meaning of Section
1286 of the Code.
When used in this opinion, the term "knowledge" or words of similar
import mean the conscious awareness of facts or other information of the Sidley
& Austin attorneys currently practicing law with this firm who have been
actively involved in negotiating the Agreements and other aspects of the
Transactions, having no current conscious awareness of any contrary facts or
information.
The opinions expressed herein are being delivered to you as of the date
hereof, and we assume no obligation to advise you of any changes of law or fact
that may occur after the date hereof, notwithstanding that such changes may
affect the legal analysis or conclusions contained herein. This opinion letter
is solely for your benefit in connection with the Transactions and may not be
relied on in any manner for any other purpose or by any other person or
transmitted to any other person without our prior consent.
Very truly yours,
/s/ Sidley & Austin
[THATCHER PROFFITT & WOOD LETTERHEAD]
July 22, 1999
Fortress CBO Investments I, Limited The Chase Manhattan Bank, London Branch,
c/o BNP Private Bank & Trust as Trustee under the Trust Deed described herein
Cayman Limited Trinity Tower
Piccadilly Centre, P.O. Box 30688 SMB 9 Thomas More Street
Grand Cayman, Cayman Islands London, El 9YT
British West Indies
Fortress CBO Investments I Corp. Moody's Investors Service, Inc.
1301 Avenue of the Americas, 42nd Floor 99 Church Street
New York, New York 10119 New York, New York 10007
Standard & Poor's, a division of the Bear, Stearns & Co. Inc.
McGraw-Hill Companies, Inc. Bear Stearns International Limited
55 Water Street, 40th Floor 245 Park Avenue
New York, New York 10041 New York, New York 10167
Lehman Brothers Inc.
Lehman Brothers International (Europe) Bear, Stearns Financial Products Inc.
3 World Financial Center 245 Park Avenue
New York, New York 10285 New York, New York 10167
Westdeutsche Landesbank Girozentrale
1211 Avenue of the Americas, 23rd Floor
New York, NY 10035
Opinion: Placement Agent Agreement
Fortress CBO Investments I, Limited
Fortress CBO Investments I Corp.
Ladies and Gentlemen:
We have acted as counsel to Fortress Investment Corp. (the "Company",
the "Seller" or the "Collateral Manager", as appropriate), Fortress CBO
Investments I, Limited (the "Issuer") and Fortress CBO Investments I Corp. (the
"Co-Issuer"; together with the Issuer, the "Issuers"), in connection with (i)
the Underlying Assets Purchase Agreement, dated as of July 22, 1999 (the
"Underlying Assets Purchase Agreement"), between the Issuer and the Seller, (ii)
the Secured
Fortress CBO Investments I, Limited Page 2
Fortress CBO Investments I Corp.
July 22, 1999
Note and Certificate Trust Deed, dated July 22, 1999 (the "Trust
Deed"), among the Issuers and The Chase Manhattan Bank, London Branch as trustee
(the "Trustee"), and the securities issued pursuant thereto designated
U.S.$322,500,000 Class A Floating Rate Notes (the "Class A Notes"),
U.S.$20,000,000 Class B Floating Rate Notes (the "Class B Notes"),
U.S.$62,500,000 Class C Fixed Rate Notes (the "Class C Notes"), U.S.$32,500,000
Class D Fixed Rate Notes (the "Class D Notes"; collectively with the Class A
Notes, the Class B Notes and the Class C Notes, the "Senior Notes"),
U.S.$17,500,000 Class E Fixed Rate Notes (the "Class E Notes"), U.S.$17,500,000
Preferred Certificates (the "Preferred Certificates"), Common I Certificates
(the "Common I Certificates") and Common II Certificates (the "Common II
Certificates"; collectively with the Common I Certificates, the "Common
Certificates"; collectively with the Preferred Certificates, the "Certificates";
collectively with the Class E Notes, the "Subordinate Securities" or the
"Retained Securities"; collectively with the Senior Notes, the "Securities"),
(iii) the Collateral Management Agreement, dated as of July 22, 1999 (the
"Collateral Management Agreement"), between the Issuer and the Collateral
Manager, (iv) the Collateral Administration Agreement, dated as of July 22, 1999
(the "Collateral Administration Agreement"), among the Issuer, the Collateral
Manager and the Trustee, (v) the Custodial Account Agreement, dated as of July
22, 1999 (the "Custodial Account Agreement"), among the Issuer, the Trustee and
The Chase Manhattan Bank, New York Branch (the "Custodian"), (vi) the ISDA
Master Agreement, dated as of July 22, 1999 (the "Basic Hedge Agreement"),
between the Issuer and Bear Stearns Financial Products Inc., (vii) the ISDA
Master Agreement, dated as of July 22, 1999 (the "Timing Hedge"; collectively
with the Basic Hedge Agreement, the "Hedge Agreements"), between the Issuer and
Westdeutsche Landesbank Girozentrale, New York Branch, (viii) the Offering
Memorandum, dated July 16, 1999 (the "Offering Memorandum"), relating to the
Senior Notes, (ix) the Placement Agent Agreement, dated as of June 7, 1999 (the
"Placement Agent Agreement"), among the Fortress, the Issuer, Bear, Steams & Co.
Inc., Bear, Stearns International Limited, Lehman Brothers Inc. and Lehman
Brothers International (Europe) (collectively, the "Placement Agents") relating
to the placement of the Senior Notes, and (x) the Note Purchase Agreement, dated
as of July 16, 1999 (the "Note Purchase Agreement"), between the Issuer and
certain of the Placement Agents relating to the purchase and sale of the Senior
Notes. The Underlying Assets Purchase Agreement, the Trust Deed, the Collateral
Management Agreement, the Collateral Administration Agreement, the Custodial
Account Agreement, the Hedge Agreements, the Placement Agent Agreement and the
Note Purchase Agreement are collectively referred to herein as the "Agreements."
Capitalized terms not defined herein have the meanings assigned to them in the
Agreements.
In rendering this opinion letter, we have examined the documents
described above and such other documents as we have deemed necessary including,
where we have deemed appropriate, representations or certifications of officers
of parties thereto or public officials. In rendering this opinion letter, except
for the matters that are specifically addressed in the opinions expressed below,
we have assumed (i) the authenticity of all documents submitted to us as
originals or as copies thereof and the conformity to the originals of all
documents submitted to us as copies, (ii) the necessary entity formation and
continuing existence in the jurisdiction of formation, and the necessary
licensing and qualification in all jurisdictions, of all parties to all
documents, (iii) the necessary authorization, execution, delivery and
enforceability of all
Fortress CBO Investments I, Limited Page 3
Fortress CBO Investments I Corp.
July 22, 1999
documents, and the necessary entity power with respect thereto and (iv) that
there is not any other agreement that modifies or supplements the agreements
expressed in the documents to which this opinion letter relates and that renders
any of the opinions expressed below inconsistent with such documents as so
modified or supplemented. In rendering this opinion letter, we have made no
inquiry, have conducted no investigation and assume no responsibility with
respect to (a) the accuracy of and compliance by the parties thereto with the
representations, warranties and covenants contained in any document or (b) the
conformity of the underlying assets and related documents to the requirements of
the agreements to which this opinion letter relates.
Our opinions set forth below with respect to the enforceability of any
right or obligation under any agreement are subject to (i) general principles of
equity, including concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance and injunctive
relief, regardless of whether considered in a proceeding in equity or at law,
(ii) the effect of certain laws, regulations and judicial and other decisions
upon the availability and enforceability of certain remedies including the
remedies of specific performance and self-help and provisions purporting to
waive the obligation of good faith, materiality, fair dealing, diligence,
reasonableness or objection to venue or forum, to confer subject matter
jurisdiction on a federal court located within the State of New York to
adjudicate any controversy in any situation in which such court would not have
subject matter jurisdiction, to waive the right to jury trial, to impose a
penalty or forfeiture, to release, exculpate or exempt a party from, or to
require indemnification of a party for, liability for its own action or inaction
to the extent that the action or inaction includes negligence, recklessness or
willful or unlawful conduct, to sever any provision of any agreement, to
restrict access to legal or equitable remedies, to establish evidentiary
standards, to appoint any person or entity as the attorney-in-fact of any other
person or entity, to require that any agreement may only be amended, modified or
waived in writing, to provide that all rights or remedies of any party are
cumulative and may be enforced in addition to any other right or remedy, to
provide that the election of a particular remedy does not preclude recourse to
one or more remedies, to provide that the failure to exercise or the delay in
exercising rights or remedies will not operate as a waiver of any such rights or
remedies, to waive rights or remedies which cannot be waived as a matter of law,
to provide for set-off unless there is mutuality between the parties or to
provide that any agreement is to be governed by or construed in accordance with
the laws of any jurisdiction other than the State of New York, (iii) bankruptcy,
insolvency, receivership, reorganization, liquidation, voidable preference,
fraudulent conveyance and transfer, moratorium and other similar laws affecting
the rights of creditors or secured parties and (iv) public policy considerations
underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of any provision of any agreement which
purports or is construed to provide indemnification with respect to securities
law violations. Wherever we indicate that our opinion with respect to the
existence or absence of facts is based on our knowledge, our opinion is based
solely on the current actual knowledge of the attorneys in this firm who are
involved in the representation of parties to the transactions described herein.
In that regard we have conducted no special or independent investigation of
factual matters in connection with this opinion letter.
Fortress CBO Investments I, Limited Page 4
Fortress CBO Investments I Corp.
July 22, 1999
In rendering this opinion letter, we do not express any opinion
concerning any law other than the federal laws of the United States including
without limitation the Securities Act of 1933, as amended (the "1933 Act"), the
Internal Revenue Code of 1986 (the "Code"), the laws of the State of New York
and the General Corporation Law of the State of Delaware. We do not express any
opinion herein, unless specifically addressed in the opinions expressed below,
with respect to (i) any law the violation of which would not have any material
adverse effect on the ability of any party to perform its obligations under any
agreement or the applicability of which results from the legal or regulatory
status or involvement in any transaction to which this opinion letter relates of
a person or entity not the subject of the opinions expressed herein, (ii) any
statute, regulation or provision of law of any county, municipality or other
political subdivision or any agency or instrumentality thereof, (iii) the
securities or tax laws of any jurisdiction or (iv) any other matter
Based upon and subject to the foregoing, it is our opinion that:
1. The Co-Issuer has been legally incorporated and, based upon a
certificate of good standing issued by the State in which
incorporated, is validly existing as a corporation in good
standing under the laws of that State, and has the requisite
entity power and authority to execute and deliver the
Agreements and to perform its obligations thereunder.
2. Excluding the Trust Deed, each of the Agreements to which the
Issuer, the Co-Issuer or the Company is a party has, in the
case of the Co-Issuer, been duly authorized, executed and
delivered by the Co-Issuer and, assuming the necessary
authorization, execution and delivery thereof by the parties
thereto other than the Co-Issuer, is a valid and legally
binding agreement under the laws of the State of New York,
enforceable thereunder against the Issuer, the Co-Issuer and
the Company in accordance with its terms.
3. The performance by each of the Issuers and the Collateral
Manager of its respective obligations under the Agreements and
the consummation of the transactions contemplated thereby do
not require any consent, approval, authorization or order of,
filing with or notice to any court, agency or other
governmental body, except such as may be required under the
securities laws of any state or such as have been obtained,
effected or given.
4. The performance by each of the Issuers and the Collateral
Manager of its obligations under the Agreements and the
consummation of the transactions contemplated thereby will not
result in (i) in the case of the Co-Issuer, any breach or
violation of its certificate of incorporation or bylaws, (ii)
in the case of the Co-Issuer and the Collateral Manager, to
our knowledge, any breach, violation or acceleration of or
default under any indenture or other material agreement or
instrument to which it is a party or by which it is bound or
(iii) any breach or violation of any statute or regulation
thereunder or, to our knowledge, any order of any court,
agency or other governmental body.
Fortress CBO Investments I, Limited Page 5
Fortress CBO Investments I Corp.
July 22, 1999
5. Any final and conclusive judgment against the Issuer, the
Co-Issuer or the Company obtained respecting any of the
Agreements in a court of competent jurisdiction in England
will be recognized by and be enforceable against the Issuer,
the Co-Issuer or the Company in a United States Federal court
or a court in the State of New York in an action brought
against the Issuer, the Co-Issuer or the Company in such
court, provided that (a) the Issuer, the Co-Issuer or the
Company has been served by summons and not by public notice
and has appeared in the action, (b) such judgment is not
contrary to the public policy of the United States or the
State of New York, as the case may be, and (c) reciprocity
continues to exist as to the recognition by any court of
England of competent jurisdiction of final and conclusive
judgments obtained in the courts of the United States and any
court of the State of New York where the party against which
the judgment is sought to be enforced was either served by
summons and not by public notice or has appeared in the action
brought in such courts and where the judgment is not contrary
to the public policy of England. In this regard, we do not
believe that a money judgment against the Issuer, the
Co-Issuer or the Company with respect to its obligations under
any of the Agreements would be considered contrary to the
public policy of the United States or the State of New York.
6. The statements made in the Offering Memorandum under the
heading "Description of the Senior Notes," "Security for the
Senior Notes and the Subordinate Securities," "Transfer
Restrictions" and "The Collateral Management Agreement,"
insofar as such statements purport to summarize certain
provisions of the Senior Notes, the Trust Deed, the Collateral
Management Agreement and the Hedge Agreements provide a fair
summary of such provisions. The statements made in the
Offering Memorandum, as the case may be, under the headings
"Certain Income Tax Considerations" and "Certain ERISA
Considerations," to the extent that they constitute matters of
State of New York or federal law or legal conclusions with
respect thereto, while not purporting to discuss all possible
consequences of investment in the Senior Notes, are correct in
all material respects with respect to those consequences or
matters that are discussed therein.
7. The Trust Deed is not required to be qualified under the Trust
Indenture Act of 1939, as amended. None of the Issuer, the
Co-Issuer or the pool of Collateral is an "investment company"
or "controlled by" an "investment company" within the meaning
of the investment Company Act of 1940, as amended.
8. The offer and sale of the Securities pursuant to and in
accordance with the Agreements and, in the case of the Senior
Notes, the Offering Memorandum are transactions that do not
require registration under the 1933 Act.
9. Assuming compliance with the provisions of the Trust Deed, for
United States federal income tax purposes, the Senior Notes
will be treated as debt for United States federal income tax
purposes.
Fortress CBO Investments I, Limited Page 6
Fortress CBO Investments I Corp.
July 22, 1999
10. Assuming compliance with the provisions of the Trust Deed, for
United States federal income tax purposes, the Issuer will not
be treated as engaged in the conduct of a United States trade
or business and, consequently, the Issuer's profits will not
be subject to United States federal income tax.
11. Assuming compliance with the provisions of the Trust Deed, for
United States federal income tax purposes, neither the Issuer
nor any portion of the Issuer will be subject to United States
federal income tax as a "taxable mortgage pool" within the
meaning of Code section 7701(i).
12. Assuming compliance with the provisions of the Trust Deed, for
United States federal income tax purposes, the Issuer will be
eligible for the exemption from U.S. federal withholding tax
on payments of "portfolio interest."
This opinion letter is rendered for the sole benefit of each addressee
hereof, and no other person or entity is entitled to rely hereon. Copies of this
opinion letter may not be made available, and this opinion letter may not be
quoted or referred to in any other document made available, to any other person
or entity except to (i) any applicable rating agency, institution providing
credit enhancement or liquidity support or governmental authority, (ii) any
accountant or attorney for any person or entity entitled hereunder to rely
hereon or to whom or which this opinion letter may be made available as provided
herein and (iii) as otherwise required by law.
Very truly yours,
Thacher Proffitt & Wood
[SIDLEY & AUSTIN LETTERHEAD]
November 17, 1999
Greenwich NatWest Limited Greenwich Capital Markets, Inc.
600 Steamboat Road 600 Steamboat Road
Greenwich, Connecticut 06831 Greenwich, Connecticut 06831
Fortress Investment Corp. Moody's Investors Service, Inc.
c/o Fortress Investment Group 99 Church Street
1301 Avenue of the Americas New York, New York 10007
New York, New York 10019
LaSalle Bank National Association
Fortress Depositor L.L.C. 135 S. LaSalle Street, Suite 1625
c/o Fortress Investment Group Chicago, Illinois 60603
1301 Avenue of the Americas
New York, New York 10019 ABN AMRO Bank N.V.
135 S. LaSalle Street
Fortress IOFP, L.L.C. Chicago, Illinois 60603
c/o Fortress Investment Group
1301 Avenue of the Americas Midland Loan Services, Inc.
New York, New York 10019 210 West 10th Street, 6th Floor
Kansas City, Missouri 64105
Re: Fortress Commercial Mortgage Trust 1999-PC1 Commercial
Mortgage Pass-Through Certificates, Series 1999-PC1, Class A,
Class B Class C, Class D and Class E
Ladies and Gentlemen:
We have acted as special counsel to Fortress Depositor L.L.C.
(the "Depositor"), Fortress Investment Corp. ("Fortress Investment") and
Fortress IOFP, L.L.C. ("Fortress IOFP") in connection with the following
transactions (collectively, the "Transactions"):
(i) the contribution by Fortress IOFP to the Depositor,
pursuant to the Contribution Agreement, dated as of November 17, 1999
(the "Contribution Agreement"), between Fortress IOFP and the
Depositor, of a mortgage loan (the "Mortgage Loan") made pursuant to
that certain Amended and Restated Loan Agreement, dated as of December
2, 1997, between UBS Mortgage Finance, Inc. and Payless Cashways, Inc.,
as borrower, as amended by the First Amendment thereto dated as of
February 26, 1998;
Greenwich NatWest Limited
Fortress Investment Corp.
Fortress Depositor L.L.C.
Fortress IOFP, L.L.C.
Greenwich Capital Markets, Inc.
Moody's Investors Service, Inc.
LaSalle Bank National Association
ABN AMRO Bank N.V.
Midland Loan Services, Inc.
November 17, 1999
Page 2
(ii) the creation of a common law trust (the "Trust") and the
issuance to the Depositor by the Trust of an aggregate $83,685,619
Certificate Principal Balance of Commercial Mortgage Pass-Through
Certificates, Series 1999-PC1 (the "Certificates"), consisting of nine
classes (each, a "Class") designated Class A, Class B, Class C, Class
D, Class E, Class F, Class G, Class H and Class X, pursuant to the
Trust and Servicing Agreement, dated as of November 2, 1999 (the "Trust
Agreement"), between the Depositor, as depositor, Midland Loan
Services, Inc., as servicer (the "Servicer"), LaSalle Bank National
Association, as trustee ("Trustee"), and ABN AMRO Bank N.V., as fiscal
agent;
(iii) the transfer of the Mortgage Loan by the Depositor to
the Trust, pursuant to the Trust Agreement, in exchange for the
Certificates;
(iv) the offer of the Class A, Class B, Class C, Class D and
Class E Certificates (collectively, the "Offered Certificates") to a
limited number of institutional investors pursuant to the Placement
Agency Agreement, dated as of November 12, 1999 (the "Placement Agency
Agreement"), between the Depositor and Greenwich NatWest Limited, as
agent for National Westminster Bank Plc (together, the "Placement
Agent");
(v) the sale of the Offered Certificates by the Depositor to
Old Kent Bank, First Bank of Oak Park and Greenwich Capital Markets,
Inc. ("GCM"), pursuant to three Purchase Agreements, each dated
November 17, 1999 (collectively, the "Purchase Agreements"), between
the Depositor, as seller, and such entity, respectively, as purchaser;
and
(vi) the issuance to the Trustee by GCM (in such capacity, the
"Advance LOC Issuer") of an Advance Letter of Credit pursuant to the
Letter of Credit and Reimbursement Agreement, dated as of November 17,
1999 (the "Reimbursement Agreement"), between the Depositor, Fortress
Investment, the Trustee, the Servicer and the Advance LOC Issuer.
The Contribution Agreement, the Trust Agreement, the Placement
Agency Agreement, the Purchase Agreements and the Reimbursement Agreement are
collectively referred to herein as the "Agreements". Capitalized terms not
defined herein have the respective meanings set forth in the Trust Agreement
and, to the extent not defined therein, in the other Agreements.
Greenwich NatWest Limited
Fortress Investment Corp.
Fortress Depositor L.L.C.
Fortress IOFP, L.L.C.
Greenwich Capital Markets, Inc.
Moody's Investors Service, Inc.
LaSalle Bank National Association
ABN AMRO Bank N.V.
Midland Loan Services, Inc.
November 17, 1999
Page 3
For purposes of this opinion letter, we have reviewed the Agreements,
the Private Offering Memorandum, dated November 12, 1999, relating to the Trust
and the Certificates (including all exhibits and annexes thereto, the "Private
Offering Memorandum"). We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such other documents and records as
we have deemed relevant or necessary as the basis for this opinion. We have
obtained such certificates from and made such inquiries of officers and
representatives of the parties to the Agreements as we have deemed relevant or
necessary as the basis for such opinion. We have relied upon, and assumed the
accuracy of, such other documents and records, such certificates and the
statements made in response to such inquiries, with respect to the factual
matters upon which the opinions contained herein are based. We have also assumed
(i) the truthfulness and accuracy of each of the representations and warranties
as to factual matters contained in the Agreements, (ii) the legal capacity of
natural persons, (iii) the genuineness of all signatures and the authenticity of
all documents submitted to us as originals, (iv) the conformity to the originals
of all documents submitted to us as certified, conformed or photostatic copies,
(v) the due authorization by all necessary action, and the due execution and
delivery, of the Agreements by the parties thereto (other than the Depositor and
Fortress IOFP), (vi) the constitution of each of the Agreements as the legal,
valid and binding obligation of each party thereto (other than the Depositor,
Fortress IOFP and Fortress Investment), enforceable against each such party in
accordance with its terms, and (vii) the absence of any agreement that
supplements or otherwise modifies the agreements expressed in the Agreements.
In rendering the opinions below, we do not express any opinion
concerning the laws of any jurisdiction other than the substantive laws of the
State of New York, the General Corporation Law of the State of Delaware and,
where expressly referred to below, the federal laws of the United States of
America.
Based upon the foregoing, we are of the opinion that:
1. The Depositor has been duly organized and is validly
existing as a limited liability company in good
standing under the laws of the State of Delaware and
has the requisite power and authority to enter into
and perform its obligations under each of the
Agreements to which it is a party.
2. Each of the Agreements to which the Depositor is a
party has been duly authorized, executed and
delivered by the Depositor.
Greenwich NatWest Limited
Fortress Investment Corp.
Fortress Depositor L.L.C.
Fortress IOFP, L.L.C.
Greenwich Capital Markets, Inc.
Moody's Investors Service, Inc.
LaSalle Bank National Association
ABN AMRO Bank N.V.
Midland Loan Services, Inc.
November 17, 1999
Page 4
3. Fortress IOFP has been duly organized and is validly
existing as a limited liability company in good
standing under the laws of the State of Delaware and
has the requisite power and authority to enter into
and perform its obligations under each of the
Agreements to which it is a party.
4. Each of the Agreements to which Fortress IOFP is a
party has been duly authorized, executed and
delivered by Fortress IOFP.
5. Each of the Agreements to which any of the Depositor,
Fortress Investment or Fortress IOFP is a party
constitutes a valid, legal and binding agreement of
such party, enforceable against such party in
accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy,
insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the
enforcement of the rights of creditors generally, (b)
general principles of equity, regardless of whether
enforcement is sought in a proceeding in equity or at
law, and (c) public policy considerations underlying
any law, rule or regulation (including any federal or
state securities laws) to the extent that the same
limit the enforceability of any provisions of such
Agreements that purport or are construed to provide
indemnification.
6. The Certificates, when duly and validly executed,
authenticated and delivered in accordance with the
Trust Agreement and paid for in accordance with the
Purchase Agreements, will be entitled to the benefits
of the Trust Agreement.
7. None of the offer of the Offered Certificates, the
purchase of the Offered Certificates by the initial
purchasers thereof, the sale of the Class C
Certificates by GCM and the consummation of any of
the other transactions contemplated by, or the
fulfillment by the Depositor of the terms of, the
Agreements to which the Depositor is a party will
conflict with or result in a breach or violation of
any term or provision of the certificate of formation
or limited liability company agreement of the
Depositor, or any federal or State of New York
statute or regulation known to us to be applicable,
generally, to transactions of the nature contemplated
by the Agreements, except that we express no opinion
as to compliance with the securities laws of the
State of New York or any other
Greenwich NatWest Limited
Fortress Investment Corp.
Fortress Depositor L.L.C.
Fortress IOFP, L.L.C.
Greenwich Capital Markets, Inc.
Moody's Investors Service, Inc.
LaSalle Bank National Association
ABN AMRO Bank N.V.
Midland Loan Services, Inc.
November 17, 1999
Page 5
particular State in connection with the offer of the
Offered Certificates, the purchase of the Offered
Certificates by the initial purchasers thereof and
the sale of the Class C Certificates by GCM.
8. Neither the consummation of any of the transactions
contemplated by nor the fulfillment by Fortress
Investment or Fortress IOFP of the terms of the
Agreements to which Fortress Investment or Fortress
IOFP is a party, will conflict with or result in a
breach or violation of any term or provision of (a)
the certificate of formation or limited liability
company agreement of Fortress IOFP, or (b) any
federal or State of New York statute or regulation
known to us to be applicable, generally, to
transactions of the nature contemplated by the
Agreements.
9. No consent, approval, authorization or order of any
federal or State of New York or State of Delaware
court, agency or other governmental body known to us
to be applicable, generally, to transactions of the
nature contemplated by the Agreements is required for
the consummation by the Depositor, Fortress
Investment or Fortress IOFP of the transactions
contemplated by the Agreements, except such as may be
required under the securities laws of the State of
New York and other particular States in connection
with the offer of the Offered Certificates, the
purchase of the Offered Certificates by the initial
purchasers thereof and the sale of the Class C
Certificates by GCM.
10. The Trust Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended.
The Trust is not required to be registered under the
Investment Company Act of 1940, as amended.
11. The statements set forth in the Private Offering
Memorandum under the headings "Description of the
Offered Certificates" and "Servicing of the Mortgage
Loans", insofar as such statements purport to
summarize certain material provisions of the
Certificates and the Trust Agreement, provide a fair
and accurate summary of such provisions.
12. The statements set forth in the Private Offering
Memorandum under the headings "Certain Federal Income
Tax Consequences", "ERISA Considerations" and "Legal
Investment", to the extent that they purport to
Greenwich NatWest Limited
Fortress Investment Corp.
Fortress Depositor L.L.C.
Fortress IOFP, L.L.C.
Greenwich Capital Markets, Inc.
Moody's Investors Service, Inc.
LaSalle Bank National Association
ABN AMRO Bank N.V.
Midland Loan Services, Inc.
November 17, 1999
Page 6
describe certain matters of federal law or legal
conclusions with respect thereto, while not
discussing all possible consequences of an investment
in the Certificates to all investors, provide a fair
and accurate summary of such matters and conclusions
set forth under such headings.
13. Assuming (a) the accuracy of the Placement Agent's
and the Depositor's respective representations and
warranties, and the performance of the Placement
Agent's and the Depositor's respective covenants,
contained in the Placement Agency Agreement, (b) the
accuracy of the respective representations and
warranties, of each initial purchaser of the Offered
Certificates and the Depositor, and the performance
of such respective purchaser's and the Depositor's
respective covenants, contained in the Purchase
Agreements,. (c) the accuracy in each case of the
representations and warranties required to be made
under the heading "Notice to Investors" in the
Private Offering Memorandum, and (d) compliance by
all relevant persons with the Trust Agreement, the
offer of the Offered Certificates, the purchase of
the Offered Certificates by the initial purchasers
thereof and the sale of the Class C Certificates by
GCM in the manner contemplated in the Private
Offering Memorandum, the Placement Agency Agreement
and the Purchase Agreements are transactions that do
not require registration of the Certificates under
the Securities Act of 1933, as amended.
14. Assuming compliance with all provisions of the Trust
Agreement, for City and State of New York income and
corporation franchise tax purposes, the Trust will be
exempt from all City and State of New York taxation
imposed on its income, franchise or capital stock,
and its assets will not be included in the
calculation of any City or State of New York
franchise tax liability.
15. Assuming compliance with all provisions of the Trust
Agreement, the arrangement under which the Trust Fund
is created will be classified as a grantor trust
under subpart E, part I of subchapter J of the
Internal Revenue Code of 1986 (the "Code") and not as
a partnership, an association or a publicly traded
partnership taxable as a corporation or a taxable
mortgage pool.
Greenwich NatWest Limited
Fortress Investment Corp.
Fortress Depositor L.L.C.
Fortress IOFP, L.L.C.
Greenwich Capital Markets, Inc.
Moody's Investors Service, Inc.
LaSalle Bank National Association
ABN AMRO Bank N.V.
Midland Loan Services, Inc.
November 17, 1999
Page 7
16. The Offered Certificates will be characterized as
evidencing ownership interests in the Mortgage Loan
and as constituting interests in "stripped bonds"
within the meaning of Section 1286 of the Code.
When used in this opinion, the term "knowledge" or words of
similar import mean the conscious awareness of facts or other information of the
Sidley & Austin attorneys currently practicing law with this firm who have been
actively involved in negotiating the Agreements and other aspects of the
Transactions, having no current conscious awareness of any contrary facts or
information.
The opinions expressed herein are being delivered to you as of
the date hereof, and we assume no obligation to advise you of any changes of law
or fact that may occur after the date hereof, notwithstanding that such changes
may affect the legal analysis or conclusions contained herein. This opinion
letter is solely for your benefit in connection with the Transactions and may
not be relied on in any manner for any other purpose or by any other person or
transmitted to any other person without our prior consent.
Very truly yours,
/s/ Sidley & Austin
[LETTERHEAD SIDLEY AUSTIN BROWN & WOOD]
December 31, 2001
Fortress Investment Corporation
1301 Avenue of the Americas
42nd Floor, New York, NY 10019
Re: REIT Qualification and $85,000,000 Zero Coupon Note Executed
by FIC GSA Mezzanine Borrower LLC and FIC Houston LLC in Favor
of GMZ Funding LLC
Ladies and Gentlemen:
We have acted as United States special tax counsel to Fortress
Investment Corp., a Maryland corporation (alternatively "FIC" or "Indemnitor"),
FIC GSA Mezzanine Borrower LLC, a Delaware limited liability company ("GSA
Mezzanine"), and FIC Houston LLC, a Delaware limited liability company
("Houston") (GSA Mezzanine and Houston individually and collectively are
sometimes referred to herein as the "Borrower") in connection with the execution
and delivery by the Lender and the Borrower of that certain Mezzanine Loan
Agreement, dated as of December 31, 2001, between GMZ Funding LLC, a Delaware
limited liability company ("Lender") and the Borrower (the "Loan Agreement").
Under the Loan Agreement the Lender has made a loan to the Borrower (the "Loan")
and the Borrower has executed a zero coupon promissory note dated as of December
31, 2001 in the amount of $85,000,000 in favor of the Lender (the "Note").
The Loan proceeds consisted of $25,000,000 cash and two non-interest
bearing demand notes payable by FIC in the amounts of $2,779,500 ("$2M Note")
and $57,220,500 ("$57M Note"). The Lender transferred $25,000,000 and endorsed
the $57M Note to GSA Mezzanine and Lender endorsed the $2M Note to Houston. GSA
Mezzanine distributed the cash and the $57M Note to its sole member, Fortress
Partners, L.P., which, in turn, distributed the cash and the $57M Note to its
sole general partner, FIC. FIC owns all but a very small percentage (less than
..1%) of the ownership interests in Fortress Partners, L.P. Houston will
distribute the $2M Note to its sole member, FIC.
SIDLEY AUSTIN BROWN & WOOD NEW YORK
Fortress Investment Corporation
December 31, 2001
Page 2
The Lender pledged the Note as part of the security for certain notes
it issued pursuant to an Indenture Agreement (Series 2001-GSA Notes), by and
between GMZ Funding LLC, as Issuer, and Lasalle Bank National Association, as
Trustee, dated as of December 31, 2001 (the "Indenture"). Fortress CBO
Investments I, Limited ("CBO Issuer"), an entity wholly owned by FIC, organized
under the laws of the Cayman Islands, purchased Class A Series 2001-GSA Notes
("A Notes") with a stated redemption price at maturity of $25,000,000 issued by
Lender under an Asset Purchase Agreement by and between Lender, as Seller, and
CBO Issuer, as Purchaser, dated as of December 31, 2001 (the "Asset Purchase
Agreement"). CBO Issuer will pledge the A Notes as part of the security for
certain notes issued by the CBO Issuer pursuant to a Secured Note and
Certificate Trust Deed by and among Fortress CBO Investments I, Limited, as
Issuer, Fortress CBO Investments I Corp., as Co-Issuer, and The Chase Manhattan
Bank, as Trustee, dated July 22, 1999 (the "CBO Indenture").
As United States special tax counsel, we have examined such documents
and records as we have deemed appropriate for purposes of rendering this
opinion, including the following (collectively, the "Transaction Documents").
Capitalized terms used herein but not defined herein shall have the respective
meanings ascribed to them in the Transaction Documents.
1. Loan Agreement;
2. Note;
3. Indemnity Agreement executed by Indemnitor in favor of Lender, dated
as of December 31, 2001;
4. Equity Pledge Agreement by and between Lender and Borrower, dated as
of December 31, 2001;
5. Intercreditor Agreement by and between State Street Bank and Trust
Company, as Trustee for $223,245,400 Lease-Backed Pass-Through Certificates,
Series 1999-GSA1, Class A, and for $175,870,728 Commercial Mortgage Pass-Through
Certificates, Series 1999-C1, Class B, as Senior Lender and GMZ Funding LLC, as
Mezzanine Lender dated as of December 31, 2001;
6. Limited Liability Company Agreement of GSA Mezzanine dated as of
December 31, 2001;
7. Limited Liability Company Agreement of Houston dated as of December
31, 2001;
8. Indenture;
SIDLEY AUSTIN BROWN & WOOD NEW YORK
Fortress Investment Corporation
December 31, 2001
Page 3
9. CBO Indenture;
10. Asset Purchase Agreement;
11. Agreement of Limited Partnership of Fortress Partners, L.P. dated
as of June 10, 1998; and
12. Copies of certain formation and organization documents of Fortress
GSA Properties Holdings LLC, Fortress GSA Properties LLC, Fortress GSA San Diego
Properties Holdings LLC, Fortress GSA Huntsville LLC, Fortress GSA San Diego
LLC, Fortress Houston GP Corp., Fortress GSA Houston LP, and Fortress GSA
Houston Properties, LP.
This opinion concerns the effect on FIC's qualification as a real
estate investment trust ("REIT") as defined in Section 856(a) of the Internal
Revenue Code of 1986 ("Code") of FIC's holding an interest in the Note
indirectly through the Lender, in particular, the extent to which the Note, and
the income on the Note, will be taken into account for purposes of the asset and
income tests of Code Section 856(c)(2),(3) and (4) with which FIC is required to
comply in order to continue to qualify as a REIT.
We have made such investigations of such matters of law as we deemed
appropriate as a basis for the opinions expressed below. Further, we have
assumed the genuineness of all signatures and the authenticity of all documents
submitted to us as originals. Our opinion is also based on the assumption that
there are no agreements or understandings with respect to the transactions
contemplated in the Transaction Documents other than those contained therein.
Furthermore, our opinion is based on the assumption that all parties to the
Transaction Documents will comply with the terms thereof. As to any facts
material to the following opinion which we did not independently establish or
verify, we have relied upon statements and representations of the officers and
directors of FIC. As to the treatment of the Note under generally accepted
accounting principles ("GAAP"), we have relied upon statements made by Gregory
Hughes, the chief financial officer of FIC. Mr. Hughes has advised us that under
GAAP, the Note will not appear as an asset on FIC's balance sheet or give rise
to additional income to FIC because it will be eliminated in the consolidation
of the separate balance sheets of all the various entities referred to in this
letter.
By virtue of its capital interest in Fortress Partners, L.P., FIC owns
virtually the entire ultimate economic ownership of the underlying properties
that indirectly secure the Note. Under Treas. Reg. Section 1.856-3(g), a REIT
That is a partner in a partnership is deemed to own its proportionate share of
the assets of that partnership and to be entitled to the income of the
SIDLEY AUSTIN BROWN & WOOD NEW YORK
Fortress Investment Corporation
December 31, 2001
Page 4
partnership attributable to such share.1 Thus, FIC is treated, for REIT
qualification purposes, as if it owns the underlying properties and as if it
received the income derived from those properties to the extent of its ownership
of Fortress Parners, L.P., i.e., in a percentage in excess of 99.9%. Since the
economic value of the Note is totally dependent on the economic value of the
underlying properties, we observe that to count the Note as a separate gross
asset and as producing additional gross income to FIC involves an element of
double counting. That is, the underlying properties that support the Note are
already included in FIC's gross assets for purposes of the asset and income
tests of Code Section 856(c) and to count tHe Note as another gross asset would
suggest that there is an additional value to FIC's holdings that does not in
fact exist.
Moreover, Treas. Reg. Section 1.856-2(d)(3) provides that the total
gross assets of a REIT are generally determined in accordance with GAAP. While
it is fairly clear that this is not an unreserved application of GAAP to
entities such as other REITs or taxable REIT subsidiaries that might technically
be consolidated under GAAP with a REIT that owned their shares, we believe that
in the case of a partnership that is already treated in effect as an aggregate
for purpose of the REIT income and asset tests of Code Section 856(c), the GAAP
treatment that treats the Note as non-existent would prevail. There is support
for this view in several private letter rulings issued relatively recently by
the Internal Revenue Service.2
- --------
1 Thus, for example, if a REIT owns a 30% capital interest in a partnership
owning rental property, that REIT will be treated as owning 30% of the property
owned by the partnership and as being entitled to 30% of the rent derived from
the property by the partnership.
2 Private letter rulings may not be used or cited as precedent by taxpayers
other than those to whom they are issued, but are nevertheless indicative of the
Internal Revenue Service's position on an issue as of the date that they are
issued. See P.L.R. 9514006 (December 30, 1994) (A REIT held a general
partnership interest in an operating partnership ("OP") which held several
shopping centers. The REIT loaned money to the OP evidenced by a note with
stated interest. The Service held that since the REIT had to account for its
share of OP's assets and income under regulation Section 1.856-3(G) and because
that share already reflected the actual assets held by and the income received
by OP, the loan and the interest payments by OP to the REIT should be
disregarded for the asset and income tests under Section 856(c). See also P.L.R.
199930043 (April 30, 1999), P.L.R. 9808011 (October 14, 1997); P.L.R. 9701028
(October 1, 1996); P.L.R. 9552038 (September 29, 1995); P.L.R. 9535014 (May 25,
1995); P.L.R. 9521010 (February 23, 1995); P.L.R. 9515005 (December 7, 1994);
P.L.R. 9452032 (September 30, 1994); P.L.R. 9502037 (October 19, 1994); P.L.R.
9431005 (April 22, 1994); P.L.R. 9428018 (April 18, 1994); P.L.R. 9343027 (July
30, 1993) (Generally, a REIT's allocable share of management fees from its
partnership interests is disregarded for purposes of applying the gross income
tests of Section 856(c) to the extent that such allocable share does not exceed
the REIT's direct and indirect interests, through the partnership, in the
properties being managed.). See also P.L.R. 9832012 (May 7, 1998) (A REIT held
various real estate projects through qualified REIT subsidiaries and
partnerships. It formed a finance entity ("FE") as a financing vehicle. FE
issued Preferred Securities and voting Common Securities. FE sold the Preferred
Securities and FE used the proceeds to purchase the REIT's debentures. FE
transferred the Common Securities to the REIT in exchange for additional REIT
debentures. The Service held that while the REIT
SIDLEY AUSTIN BROWN & WOOD NEW YORK
Fortress Investment Corporation
December 31, 2001
Page 5
Finally, we note that Code Section 856(c)(7) now directs that a
security issued as "straight debt", within the meaning of Code Section
1361(c)(5), by an issuer that is a partnership of which a REIT is at least a 20%
partner is to be disregarded for purposes of the requirement of Code Section
856(c)(4)(B)(iii)(III) that a REIT not own more than 10% of total value of the
securities of any single issuer. It would be incongruous to disregard such a
security for purposes of Code Section 856(c)(4)(B)(iii)(III), but not for Code
Section 856(c)(2), and (3).3
Based on the foregoing, we are of the opinion that, for U.S. federal
income tax purposes,
1. FIC's interest (held indirectly through its interest in the Lender)
in the Note issued by the Borrower will not violate Code
Section 856(c)(4)(B)(iii)(III)'s requirement that it hold no more than ten
percent (10%) of the total value of the outstanding securities of any one
issuer.
2. FIC will not recognize income with respect to the Note that does not
qualify for purposes of Section 856(c)(3) (the 75% income test), and the Note
will not constitute a non-qualifying asset in FIC's hands for purposes of
Section 856(c)(4)(A) (the 75% asset test), 856(c)(4)(B)(i) (the 25% asset test)
or 856(c)(4)(B)(iii)(I) (the 5% asset test) except, in each case, to the extent
allocable to the minority equity interests in Fortress Partners L.P.
The opinion set forth herein is based upon the existing provisions of
the Internal Revenue Code of 1986, as amended (the "Code") and United States
Treasury regulations issued or proposed thereunder, published Revenue Rulings
and releases of the United States Internal Revenue Service and existing case
law, any of which could be changed at any time. Any such changes may be
retroactive in application and could modify the legal conclusions upon which
such opinion is based. The opinions expressed herein are limited as described
above, and we do not express an opinion on any other tax aspect of the
transactions contemplated by the Transaction Documents.
In rendering the foregoing opinions, we express no opinion as to the
laws of any jurisdiction other than the federal income tax laws of the United
States. This opinion is rendered as of the date hereof and we undertake no
obligation to update this opinion or advise you of any changes in the event
there is any change in legal authorities, facts, assumptions or documents on
which this opinion is based (including the taking of any action by any party to
the Transaction
- --------
held all of FE's voting Common Securities, such interest did not violate the 10%
cap on voting securities of a single issuer within the meaning of
Section 856(c)(4)(B).
3 The note is, in our opinion, "straight debt." See, generally, S. REP. NO.
97-640, at 718 (1982) and H.R. REP. NO. 97-826, at 730 (1982).
SIDLEY AUSTIN BROWN & WOOD NEW YORK
Fortress Investment Corporation
December 31, 2001
Page 6
Documents pursuant to any opinion of counsel or a waiver), or any inaccuracy in
any of the representations, warranties or assumptions upon which we have relied
in rendering this opinion unless we are specifically engaged to do so. This
opinion is rendered only to those to whom it is addressed and may not be relied
on in connection with any transaction other than the transaction contemplated
herein. This opinion may not be relied upon for any other purpose, or relied
upon by any other person, firm or corporation for any purpose, without our prior
written consent.
Very truly yours,
/s/ Sidley Austin Brown & Wood
-----------------------------------------
[THACHER PROFFITT LETTERHEAD]
July 12,2002
Newcastle Investment Corp.
1251 Avenue of the Americas
New York, New York 10020
Ladies and Gentlemen:
We have acted as counsel to Impac Commercial Holdings, Inc. ("Impac
Commercial Holdings"), Impac Commercial Assets Corp. ("Impac Commercial Assets")
and IMH Assets Corp. (the "Company") in connection with the transactions
described herein. Impac CMB Trust 1998-Cl (the "Owner Trust") issued its
Collateralized Mortgage Bonds (the "Bonds") pursuant to the Indenture, dated as
of August 1, 1998 (the "Indenture"), between the Owner Trust as issuer and
Laalle National Bank as indenture trustee (the "Indenture Trustee"). Pursuant
to the Indenture, the Bonds are collateralized by certain assets of the Owner
Trust (the "Owner Trust Estate" or the "Collateral") consisting primarily of
fixed and adjustable rate, first lien, multifamily and commercial loans (the
"Mortgage Loans"). Impac Commercial Holdings sold the Mortgage Loans to Impac
Commercial Assets pursuant to the Loan Sale Agreement, dated as of August 1,
1998 (the "Loan Sale Agreement"), between Impac Commercial Holdings and Impac
Commercial Assets. Impac Commercial Assets then sold the Mortgage Loans to the
Company pursuant to the Loan Sale Agreement, dated as of August 1, 1998 (the
"IMH Loan Sale Agreement"), between the Seller and the Company. The Company
transferred the Mortgage Loans to the Owner Trust in exchange for the Bonds and
the certificates of beneficial ownership issued by the Owner Trust (the "Owner
Trust
IMH Assets Corp., Series 1998-C1 Page 2.
July 12,2002
Certificates") pursuant to the Owner Trust Agreement, dated as of August 1,1998
(the "Owner Trust Agreement"), between the Company and Wilmington Trust Company.
The Company sold the Class A-1A, Class A-lB, Class A-2, Class B, Class
C, Class D and Class E Bonds (collectively, the "Offered Bonds") to Morgan
Stanley & Co. Incorporated (the "Underwriter") pursuant to the Underwriting
Agreement, dated as of August 20, 1998 (the "Underwriting Agreement"), between
the Company and the Underwriter. The Class F Bond was guaranteed by Impac
Commercial Holdings (in such capacity, the "Guarantor") in favor of the
Indenture Trustee pursuant to the Guaranty, dated as of August 26,1998 (the
"Guaranty"). The Class F and Class G Bonds and the Owner Trust Certificates were
transferred to Impac Commercial Assets as partial consideration for the Mortgage
Loans. The Class XS Owner consideration for the Mortgage Loans. The Bonds were
offered and sold pursuant to a registration statement (the "Registration
Statement") declared effective on May 1, 1998 by the Securities and Exchange
Commission (the "Commission") and a prospectus, dated August 6, 1998 (the "Base
Prospectus"), supplemented by a prospectus supplement, dated August 20, 1998
(the "Prospectus Supplement"; together with the Base Prospectus, the
"Prospectus").
The Owner Trust Agreement, the Impac Loan Sale Agreement, the IMH Loan
Sale Agreement, the Servicing Agreement, the Guaranty, the Indenture and the
Underwriting Agreement are collectively referred to herein as the Agreements .
Capitalized terms not defined herein have the meanings assigned to them in the
Agreements.
In connection with rendering this opinion letter, we have examined (i)
an executed copy of the Indenture, (ii) an executed copy of Guaranty, (iii) a
copy of the report (the "Determination Date Report") prepared by Midland Loan
Services, Inc. (the "Master Servicer") for the Collection Period one month prior
to the Transfer Date and (iv) such other documents as we have deemed necessary
and relevant as a basis for the opinions set forth below. In rendering this
opinion letter, except for the matters that are specifically addressed in the
opinion expressed below, we have assumed (i) the authenticity of all documents
submitted to us as originals or as copies thereof, and the conformity to the
originals of all documents submitted to us as copies, (ii) the necessary entity
formation and continuing existence in the jurisdiction of formation, and the
necessary licensing and qualification in all jurisdictions, of all parties to
all documents, (iii) the necessary authorization, execution, delivery and
enforceability of all documents, and the necessary entity power with respect
thereto, and (iv) that there is not any other agreement that modifies or
supplements the agreements expressed in any document to which this opinion
letter relates and that renders the opinion expressed below inconsistent with
such document as so modified or supplemented. In rendering this opinion letter,
except for the matters that are specifically addressed in the opinion expressed
below, we have made no inquiry, have conducted no investigation and assume no
responsibility with respect to (a) the accuracy of and compliance by the parties
thereto with the representations, warranties and covenants as to factual matters
contained in any document or (b) the conformity of the underlying assets and
related documents to the requirements of any agreement to which this opinion
letter relates.
IMH Assets Corp., Series 1998-Cl Page 3.
July 12,2002
This opinion letter is based solely upon our review of the documents
referred to herein. We have conducted no independent investigation with respect
to the facts contained in such documents and relied upon in rendering this
opinion letter. We also note that we do not represent any of the parties to the
transactions to which this opinion letter relates or any of their affiliates in
connection with matters other than certain transactions. However, the attorneys
in this firm who are directly involved in the representation of parties to the
transactions to which this opinion letter relates have no actual present
knowledge of the inaccuracy of any fact relied upon in rendering this opinion
letter. In addition, if we indicate herein that any opinion is based on our
knowledge, our opinion is based solely on such actual present knowledge of such
attorneys.
In rendering this opinion letter, we do not express any opinion
concerning any law other than the federal income tax laws of the United States
including without limitation the Internal Revenue Code of 1986 (the "Code") and
applicable regulations thereunder and current judicial and administrative
authority with respect thereto. We do not express any opinion herein with
respect to any matter not specifically addressed in the opinions expressed
below, including without limitation (i) any statute, regulation or provision of
law of any county, municipality or other political subdivision or any agency or
instrumentality thereof or (ii) the securities or tax laws of any jurisdiction.
The federal income tax opinions set forth below are based upon the
existing provisions of the Code and Treasury regulations issued or proposed
thereunder, published Revenue Rulings and releases of the Internal Revenue
Service and existing case law, any of which or the effect of any of which could
be changed at any time. Any such changes may be retroactive in application and
could modify the legal conclusions upon which such opinions are based. The
opinions expressed herein are limited as described below, and we do not express
any opinion on any other legal or income tax aspect of the transactions
contemplated by the documents relating to the transaction.
Based upon and subject to the foregoing, it is our opinion for federal
income tax purposes, the Class F Bonds will be characterized as debt
instruments.
This opinion letter is rendered for the sole benefit of each addressee
hereof with respect to the matters specifically addressed herein, and no other
person or entity is entitled to rely hereon. Copies of this opinion letter may
not be made available, and this opinion letter may not be quoted or referred to
in any other document made available, to any other person or entity except to
(i) any applicable rating agency, institution providing credit enhancement,
reinsurer or liquidity support or governmental authority, (ii) any accountant or
attorney for any person or entity entitled hereunder to rely hereon or to whom
or which this opinion letter may be made available as provided herein and (iii)
as otherwise required by law. We assume no obligation to revise, supplement or
withdraw this opinion letter, or otherwise inform any addressee hereof, or other
person or entity entitled to rely hereon, with respect to any change occurring
subsequent to the delivery hereof in any applicable fact or law or any judicial
or administrative interpretation thereof, even though such change may affect a
legal analysis or conclusion contained herein. In addition, no attorney-client
relationship exists or has existed by reason of this opinion letter between our
firm and any addressee hereof or other person or entity entitled to rely hereon
except for any addressee that is identified in the first paragraph hereof as a
person or entity for which we have acted as counsel in rendering this opinion
IMH Assets Corp., Series 1998-Cl Page 4.
July 12,2002
letter. In permitting reliance hereon by any person or entity other than an
addressee for which we have acted as counsel, we are not acting as counsel for
such other person or entity and have assumed and are assuming no responsibility
to advise such other person or entity with respect to the adequacy of this
opinion letter for its purposes.
Very truly yours,
/s/ Thacher, Proffitt & Wood