STG Long Form Creditors' Rights Questionnaire

Stewart Title Guaranty Company has been asked to endorse the creditor’s rights exclusion in its title insurance policy(ies), where permitted, in connection with a contemplated transaction.

In order to expedite the evaluation of the request:

1. Please answer all questions.

2. Please be as detailed as possible.

3. Please attach additional sheets and documentation, if applicable.

4. This questionnaire should be completed by a person who is familiar with the transaction, and who knows the answers to the questions. To that end, multiple complementary questionnaires may be submitted. Questions may be answered by a party to the transaction, an attorney, a title insurance agent or a Stewart Underwriter.

5. Section I (Transaction) and Section II (Property) should be completed in all cases.

Section III (Transfer) should be completed if any portion of the transaction involves a conveyance, transfer and/or assignment of property of any kind (real and/or personal), including the creation or assignment of a lease. Section III may be omitted if the transaction involves solely a mortgage loan.

Section IV (Mortgage Loan) should be completed if any portion of the transaction involves a loan. Section IV may be omitted if the transaction is a transfer without any mortgage.

Section V (Signature) should be completed for all portions of the Questionnaire. If different persons complete different sections, please copy Section V and attach it to the applicable Sections. Please provide contact information in the event further clarification is necessary.

Please note that these are initial questions. Upon review of the responses, additional information and/or documentation may be requested.

I. TRANSACTION

Please describe the transaction (in the alternative, please provide any memorandum outlining the transaction):

Is a memorandum attached? __________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________

II. PROPERTY

1. Title Order/File/Commitment number: ______________________________

2. Property location: _______________________________________________

_______________________________________________
_______________________________________________

3. What is the current and/or planned use of the property? ________________

4 Is there a current appraisal of the property? _________________ If yes:

a. What is the current appraised value of the property? _________________
b. Please provide a copy. Is it attached? _________________

5. If there is no appraisal:

a. Upon what basis was the value of the property determined? _________________
b. Does the current tax assessment support the amount of consideration? _________

6. Is the property encumbered by any liens (mortgages, judgment liens, etc.)? ___________

a. If yes, please describe and state approximate payoff. _________________
b. Will these be satisfied on or before the closing? _________________
c. If not, please describe. _________________

III. TRANSFER

Please note: Section III (Transfer) should be completed if any portion of the transaction involves a conveyance, transfer and/or assignment of property of any kind (real and/or personal), including the creation or assignment of a lease. Section III (Transfer) may be omitted if the transaction is solely a mortgage loan.

A. About the parties to the transfer:

1. Name(s) of Seller(s)/(Transferor(s): ___________________________________________

2. Type and domicile of Seller(s) (e.g., a New York corporation): _____________________

3. Name(s) of Buyer(s)/Transferee(s): ___________________________________________

4. Type and domicile of Buyer(s) (e.g., a New York corporation): _____________________

5. Are the seller/transferor and the record owner (title holder) the same entity? __________

a. If not, please describe their relationship. _________________

6. Is the sale transaction a completely “arms-length” transaction? _________________

a. If no, please describe. _________________

7.Is there any relationship between any of the parties, or principals, including the lender?________________ If so, describe. _________________________

Have there been or will there be any loans, employment or compensation arrangements, business dealings or intermingled ownership interests between any of the parties?______________

a. If yes to either of the above, please describe. _________________

8. Is there any other person or entity involved in the transaction, e.g., guarantor, parent, subsidiary, other seller, buyer, etc.? _________________

a. If yes, please describe. _________________

9. Is the structure of the seller/record owner/transferor being changed by addition or deletion of shareholders, partners, members, or transfer of any ownership interests? _________________

a. If yes, please describe. _________________

10. Does the seller/transferor have any outstanding debts or liabilities (direct or indirect, secured or unsecured, contingent or otherwise, appearing on the balance sheet or otherwise)? Please include all guaranties, pledges, indemnities and financial obligations of any nature. ________________ If yes, please answer the following:

a. How much, and to whom? _________________
b. Debts to insiders? _________________
c. Existing arrears or defaults? _________________
d. Does the seller/transferor hereby undertake to satisfy all outstanding debts and liabilities prior to distributing any proceeds of the transfer to insiders (principals, partners, shareholders, members, etc.)? _________________

11. With respect to the seller/transferor:

a. Is the seller insolvent on the date of the sale? _________________
b. Will the seller be rendered insolvent by the sale? _________________
c. Will the seller be left with unreasonably small working capital? ______________
d. Will the seller incur debt beyond its ability to repay? _________________
e. Is the sale intended to hinder, delay or defraud any creditor of the seller, or will it have the effect of hindering, delaying or defrauding any creditor of the seller? _________________
f. Are there any pending lawsuits, legal proceedings, judgments or tax liens against the seller? _________________
g. Has a bankruptcy proceeding been commenced (voluntary or involuntary) by or against the seller/transferor or any related entities? _________________
h. Is a bankruptcy proceeding contemplated? _________________

If yes to any of the above, please explain.

i. Is the seller a single purpose entity (i.e., does it own only one major asset)? _________________
j. Is the property to be transferred the sole asset or most valuable asset of the seller? _____________
k. Is the seller being dissolved, or will it otherwise cease to do business after the sale?____________

12. Will the seller/transferor retain possession or control of the property? _________________

a. If yes, please explain. _________________

13. Is there a solvency opinion, creditors’ rights opinion, fair value opinion or fairness opinion by any party’s accountant, attorney, lender or other source? ________________

a. If yes, is it attached? _________________

B. About the transfer:

1. What is the purchase price? _________________

2. What is the amount of the requested owner’s policy? _______________

3. Please describe all interests being sold/transferred by the seller, other than the subject real property (e.g., other real property, personal property, shares of stock, partnership interests, member's interests, etc.): _________________

4. Will the transaction involve the transfer of any ownership interests of the seller, other than the subject real property (e.g., shares of stock, partnership interest, member’s interest, etc.)? _________________
a. If yes, please describe. _________________

5. Please describe all consideration received by the seller (e.g., cash, purchase money loan, stock, partnership interests, member’s interest, release from prior debt, promise of future employment, etc.). _____________________________

6. Does the transaction involve any of the following?

a. a deed in lieu of foreclosure? _________________
b. a leveraged buyout? _________________
c. a sale out of a bankrupt entity? _________________
d. a sale where any portion the consideration will not be paid simultaneously (e.g., a “credit sale” or any form of seller financing)? _________________
e. a financing mechanism (e.g., a sale-leaseback, synthetic lease, etc.)? __________
f. a like-kind / tax-deferred exchange (pursuant to IRS § 1031)? _______________

If yes, is the property being transferred by a facilitator/intermediary in a non-simultaneous exchange? _________________

g. a purchase of shares or equity interests in the seller/transferor? ______________
h. property or ownership interests being transferred to (“rolled up” into) a new master partnership or other entity? _________________
i. a merger of an entity into another or acquisition of an entity by another? _______

If yes to any of the above, please describe the transaction, including the consideration to be received by the grantor.

C. About the sale proceeds from the transfer:

1. Please describe the disposition of all of the sale proceeds. Please account for the full amount of the consideration, including amounts retained by the seller/transferor. Please include specific uses. This response should include, but not be limited to, any planned distributions or payments, in any manner (directly or indirectly), to prior/existing creditors (including prior/existing mortgagees), and any insiders or related entities: principals, partners, shareholders, officers, directors, members, parent, subsidiary or sister entities, guarantors, etc. For example:

a. $___________________ to satisfy existing mortgage lien(s) encumbering the subject real property;

If so, please attach a copy of the payoff letter. Is it attached? ________________

$___________________ to ____________________________________ for ___________________________________.

$___________________ to ____________________________________ for ___________________________________.

$___________________ to ____________________________________ for ____________________________________.

$___________________ to ____________________________________ for ____________________________________.

$___________________ to ____________________________________ for ____________________________________.

$___________________ to ____________________________________ for ____________________________________.

2. Will the settlement statement reflect the ultimate disposition of all of the sale proceeds?

a. Yes?  _________________
b. No ?  _________________  If no, please provide documentation confirming use.

PLEASE COMPLETE SECTION IV (MORTGAGE LOAN) IF A MORTGAGE IS ALSO INVOLVED.

PLEASE COMPLETE SECTION V (SIGNATURE) FOR THE ABOVE SECTION(S).

IV. MORTGAGE LOAN

Please note: Section IV (Mortgage Loan) should be completed if any portion of the transaction involves a loan.  Section IV (Mortgage Loan) may be omitted if the transaction is solely a transfer without any financing.

A. About the parties to the mortgage loan:

1. Name(s) of Borrower(s): ___________________________________________________

2. Type and domicile of Borrower(s) (e.g., a New York corporation): __________________

3. Is the Borrower a new entity (recently created)?  _________________

4. Name(s) of Mortgagor(s) (record owner), if different: ____________________________

5. Type and domicile of Mortgagor(s) (e.g., a New York corporation): _________________

6. Is the Mortgagor a new entity (recently created)?  _________________

7. Name of Lender: _________________________________________________________

8. Are the borrower (maker of the note) and the record owner (mortgagor) the same entity?  ______________

a. If not, please describe their relationship.  _________________

9. Is the loan transaction a completely “arms-length” transaction?  _________________

a. If no, please describe.  _________________

10. Is there any relationship between any of the parties, or principals, including the lender? ________________

Have there been or will there be any loans, employment or compensation arrangements, business dealings or intermingled ownership interests between any of the parties?

a. If yes to either of above, please describe.  _________________

11. Is there any other person or entity involved in the transaction, e.g., guarantor, parent, subsidiary, other borrower, mortgagor, etc.?  _________________

a. If yes, please describe.  _________________

12. Is the structure of the mortgagor being changed by addition or deletion of shareholders, partners, members, or transfer of any ownership interests?  _________________

a. If yes, please describe.  _________________

13. Does the mortgagor have any outstanding debts or liabilities (direct or indirect, secured or unsecured, contingent or otherwise, appearing on the balance sheet or otherwise)?    Please include all guaranties, pledges, indemnities and financial obligations of any nature.  ________________  

If yes, please answer the following:

a. How much, and to whom?  _________________
b.Debts to insiders?  _________________ 
c. Existing arrears or defaults?  _________________ 
d. Does the mortgagor hereby undertake to satisfy all outstanding debts and liabilities prior to distributing any loan proceeds to insiders (principals, partners, shareholders, members, etc.)?  _________________

14. With respect to the mortgagor:

a. Is the mortgagor insolvent on the date of the loan?  _________________
b. Will the mortgagor be rendered insolvent by the mortgage?  _________________
c. Will the mortgagor be left with unreasonably small working capital?  __________
d. Will the mortgagor incur debt beyond its ability to repay?  _________________
e. Is the mortgage loan intended to hinder, delay or defraud any creditor of the mortgagor, or will it have the effect of hindering, delaying or defrauding any creditor of the mortgagor?____________
f. Are there any pending lawsuits, legal proceedings, judgments or tax liens against the mortgagor?  _________________
g. Has a bankruptcy proceeding been commenced (voluntary or involuntary) by or against the mortgagor or any related entities?  _________________
h. Is a bankruptcy proceeding contemplated?  _________________

If yes to any of the above, please explain.

i. Is the mortgagor a single purpose entity (i.e., does it own only one major asset)?  ______________
j. Is the property to be mortgaged the sole asset or the most valuable asset of the mortgagor? ______

15. Is there a solvency opinion, creditor’s rights opinion, fair value opinion or fairness opinion by any party’s accountant, attorney, lender or other source?  ________________

a. If yes, is it attached?  _________________

16. Will Title be transferred in connection with the mortgage loan transaction? __________

If so, please complete Section III.

B. About the mortgage loan transaction:

1. What is the amount of the loan?  _________________

2. What is the amount of the mortgage?  _________________

3. What is the amount of the requested loan policy?  _________________

4. Please describe all interests being mortgaged and/or encumbered by the mortgagor, other than the subject real property (e.g., other real property, personal property, shares of stock, partnership interests, member’s interest etc.).  _________________

a. If yes, what is the value of this other collateral, and upon what is the value based?  _________

5. Will the transaction involve the transfer or encumbering of any ownership interests of the mortgagor, other than the subject real property (e.g., shares of stock, partnership interest, member’s interest, etc.)? ________

a. If yes, please describe.  _________________

6. Is any guaranty being executed?  _________________.

If yes:

a. Please describe.  _________________
b. Is the mortgage securing a guarantee?  _________________
c. Is the guarantor receiving any of the loan proceeds?  _________________

If yes, what amount?  _________________

7.  Does the transaction involve a refinance of a prior loan or a modification of a prior loan?  _________________ If yes, please describe. __________________________________
_______________________________________________________________________

Please also answer the following:
a. Is the prior loan secured by a mortgage?  _________________
b. Is the prior loan held by the same lender named above or an entity related to that lender? _________________
c. Is the borrower in default under the prior loan?  _________________
d. What was the original amount of the prior loan?  ___________________
e. What is the outstanding balance of the prior loan?  _________________
f. What was the purpose of the prior loan?  _________________
g. Who received the proceeds of the prior loan?  _________________
h. When was the prior loan made?  _________________
i. Is the identical property being mortgaged?  _________________

If not, please describe (additions or deletions).  _________________

j. Is the prior loan undersecured?  _____________

8. What is the total amount of all mortgages (including the proposed mortgage) that will encumber the property when the contemplated transaction is consummated?  _________________

a. Please itemize each mortgage, including current balance.  _________________

9. Is any mortgage cross-collateralized or cross-defaulted?  _________________

a. If yes, please describe, including descriptions of the properties and loans.  _________________

10. Is any mortgage non-recourse (no personal liability of the borrower)?  ________

a. If yes, please describe.  _________________

11. Does the loan involve securitization (asset-backed securities)?  _________________

a. If yes, please describe.  _________________

C. About the loan proceeds from the mortgage loan:

1. What is the purpose of the loan?  (What will the funds be used for?)  ________________

2. Describe the source of all funding in the proposed transaction and provide a breakdown of each source and amount. _______________________________________________________________________________ 

3. Please describe the use and disposition of all of the loan proceeds and other funds in the proposed transaction.  Please account for the full amount of the loan, including amounts retained by the mortgagor.  Please include specific uses of the funds for the proposed transaction.  This response should include, but not be limited to, any planned distributions or payments, in any manner (directly or indirectly), to prior/existing creditors (including prior/existing mortgagees), and any insiders or related entities: principals, partners, shareholders, officers, directors, members, parent, subsidiary or sister entities, guarantors, etc.  For example:

a. $___________________ to satisfy existing mortgage lien(s) encumbering the subject real property;

If so, please attach a copy of the payoff letter.  Is it attached?  ________________

$___________________ to _____________________________ for _____________________________________.

$___________________ to _____________________________ for _____________________________________.

$__________________ to ______________________________ for _____________________________________.

$___________________ to _____________________________ for _____________________________________.

$___________________ to _____________________________ for _____________________________________.

$___________________ to _____________________________ for _____________________________________.

3. Will the settlement statement reflect the ultimate disposition of all of the sale proceeds?

a. Yes?  _________________
b. No ?  _________________  If no, please provide documentation confirming use.

4. If any proceeds are being distributed to anyone other than the mortgagor (the record owner), do any of the loan documents (e.g., loan agreement, personal guaranty, etc.) require the proceeds to be returned to the mortgagor (the record owner) in the event of a subsequent bankruptcy of the mortgagor (the record owner)?

a. If yes, please describe.  _________________

PLEASE COMPLETE SECTION III (TRANSFER) IF A TRANSFER IS ALSO INVOLVED.

PLEASE COMPLETE SECTION V (SIGNATURE) FOR THE ABOVE SECTION(S).

V.           SIGNATURE If signed by a party to the transaction, their representative, or an attorney, the undersigned represents that:(A)         the signer is authorized by the seller/transferor and/or buyer/mortgagor, as applicable, to sign this questionnaire on their behalf, respectively, and(B)         the foregoing statements are true and complete and acknowledges that Stewart Title Guaranty Company will rely upon the statements made herein to amend the coverage of the title insurance policy(ies) to be issued in connection with the above transaction(s). Signature:             _________________________________Print Name:         _________________________________Print Title:           _________________________________ Entity Name:        _________________________________Address:                              _________________________________                              _________________________________Phone:                  _________________________________   State of  _________________                      )                                                                           )              §§County of             _________________       )  Sworn to and subscribed before me by _____________________________________, _______________________________ of __________________________________________ on this _______ day of __________________, 200__.   __________________________________Notary Public  My Commission Expires:_____________ __________________________  Note:  This Acknowledgment should be copied and completed for each signer.

 

If signed by a title insurance agent or underwriter, the undersigned represents that:(A)         the foregoing statements are true and complete, to the best actual knowledge of the undersigned, based upon consultations with the parties involved in the transaction; and (B)         acknowledges that Stewart Title Guaranty Company will rely upon the statements made herein to amend the coverage of the title insurance policy(ies) to be issued in connection with the above transaction(s).  Signature:             _________________________________Print Name:         _________________________________Print Title:           _________________________________ Entity Name:        _________________________________Address:                              _________________________________                              _________________________________Phone:                  _________________________________