PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
Depositor
EMERGENT MORTGAGE HOLDINGS CORPORATION
Unaffiliated Seller
and
EMERGENT GROUP, INC.
---------------------------
UNAFFILIATED SELLER'S AGREEMENT
Dated as of March 1, 1998
TABLE OF CONTENTS
Page
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ARTICLE ONE DEFINITIONS........................................................1
Section 1.01. Definitions..................................................1
ARTICLE TWO PURCHASE, SALE AND CONVEYANCE OF THE MORTGAGE LOANS................4
Section 2.01. Agreement to Purchase Initial Mortgage Loans.................4
Section 2.02. Purchase Price...............................................4
Section 2.03. Delivery of Mortgage Loan Files..............................4
Section 2.04. Transfer of Mortgage Loans; Assignment of Agreement..........4
Section 2.05. Examination of Mortgage Loan File............................5
Section 2.06. Books and Records............................................5
ARTICLE THREE REPRESENTATIONS AND WARRANTIES...................................5
Section 3.01. Representations and Warranties as to the
Unaffiliated Seller.......................................5
Section 3.02. Representations and Warranties Relating
to the Mortgage Loans.....................................7
Section 3.03. Covenants of the Unaffiliated Seller........................14
Section 3.04. Representations and Warranties of the Depositor.............15
Section 3.05. Repurchase Obligation for Breach of a
Representation or Warranty................................16
Section 3.06. Reassignment of Purchased Mortgage Loans....................17
Section 3.07. Waivers.....................................................18
Section 3.08. Representations and Warranties of Emergent Group............18
ARTICLE FOUR THE UNAFFILIATED SELLER..........................................19
Section 4.01. Liability of the Unaffiliated Seller........................19
Section 4.02. Merger or Consolidation.....................................19
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Section 4.03. Costs.......................................................20
Section 4.04. Servicing...................................................20
Section 4.05. Mandatory Delivery..........................................20
Section 4.06. Indemnification.............................................20
ARTICLE FIVE CONDITIONS OF CLOSING............................................24
Section 5.01. Conditions of Depositor's Obligations.......................24
Section 5.02. Conditions of Unaffiliated Seller's Obligations.............26
Section 5.03. Termination of Depositor's Obligations......................27
ARTICLE SIX MISCELLANEOUS.....................................................27
Section 6.01. Notices.....................................................27
Section 6.02. Severability of Provisions..................................28
Section 6.03. Agreement of Unaffiliated Seller............................28
Section 6.04. Survival....................................................28
Section 6.05. Effect of Headings and Table of Contents....................28
Section 6.06. Successors and Assigns......................................28
Section 6.07. Governing Law...............................................28
Section 6.08. Confirmation of Intent......................................28
Section 6.09. Execution in Counterparts...................................29
Section 6.10. Amendments..................................................29
Section 6.11. Miscellaneous...............................................30
EXHIBITS
Exhibit A - Schedule of Mortgage Loans
Exhibit B - Officer's Certificate
ii
This Unaffiliated Seller's Agreement, dated as of March 1, 1998, among
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION, a Delaware corporation (the
"Depositor"), EMERGENT MORTGAGE HOLDINGS CORPORATION, a Delaware corporation
(the "Unaffiliated Seller"), and EMERGENT GROUP, INC., a South Carolina
corporation ("Emergent Group").
W I T N E S S E T H:
WHEREAS, the Depositor has agreed to purchase from the Unaffiliated
Seller and the Unaffiliated Seller, pursuant to this Agreement, is selling to
the Depositor the Mortgage Loans and Other Conveyed Property;
WHEREAS, it is the intention of the Unaffiliated Seller and the
Depositor that simultaneously with the Unaffiliated Seller's conveyance of the
Mortgage Loans and Other Conveyed Property to the Depositor (a) the Depositor
shall deposit the Mortgage Loans and Other Conveyed Property in a trust pursuant
to a Pooling and Servicing Agreement to be dated as of March 1, 1998 (the
"Pooling and Servicing Agreement"), to be entered into by and among the
Depositor, as Depositor, Emergent Mortgage Corp., as Servicer, First Union
National Bank, as Trust Administrator (the "Trust Administrator"), and
Wilmington Trust Company, as Trustee (the "Trustee"), and (b) the Trustee shall
issue certificates (the "Certificates") evidencing beneficial ownership
interests in the property of the trust fund formed by the Pooling and Servicing
Agreement (the "Trust Fund") to the Depositor;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01 Definitions. Whenever used herein, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article:
"Agreement" means this Unaffiliated Seller's Agreement, as amended or
supplemented in accordance with the provisions hereof.
"Certificate Insurer" means Financial Security Assurance Inc., a stock
insurance company organized and created under the laws of the State of New York,
and any successors thereto.
"Commission" means the Securities and Exchange Commission and its
successors.
"Cut-off Date" means the opening of business on March 1, 1998 for any
Mortgage Loans and the respective origination date for any Qualified of
Substitute Loan.
"Cut-off Date Principal Balance" means as to each Mortgage Loan, its
unpaid principal balance as of the Cut-off Date.
"Depositor Information" shall have the meaning given to such term in
Section 4.06(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FSA Information" means any information furnished by the Certificate
Insurer in writing expressly for the use in the Offering Document, it being
understood that in respect of the initial Offering Document, the FSA Information
is limited to the information included under the caption "The Insurer" and the
financial statements of the Certificate Insurer incorporated by reference
therein.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind other than tax liens, mechanics liens and any liens that
attach to a Mortgaged Property by operation of law.
"Mortgage Loans" means the mortgage loans listed on the Schedule of
Mortgage Loans which were identified as of March 1, 1998 and any mortgage loan
substituting or replacing a Mortgage Loan pursuant to the terms of the Pooling &
Servicing Agreement.
"Original Pool Balance" means the aggregate unpaid principal balance of
the Mortgage Loans as of the Cut-off Date.
"Originator" means Emergent Mortgage Corp., a South Carolina
corporation.
"Other Conveyed Property" means all monies at any time paid or payable
on the Mortgage Loans or in respect thereof after the Cut-off Date (including
amounts due on or before the Cut-off Date but received by the Originator, the
Unaffiliated Seller or the Depositor after the Cut-off Date), the insurance
policies relating to the Mortgage Loans and all Insurance Proceeds, rights of
the Unaffiliated Seller against the Originator under the Purchase Agreement and
Assignment, all items contained in the Mortgage Files, and any REO Property,
together with all collections thereon and proceeds thereof.
"Prospectus" means the Prospectus dated June 10, 1997 relating to the
offering by the Depositor from time to time of its pass-through certificates
(issuable in series) in the form in which it was or will be filed with the
Securities and Exchange Commission pursuant to Rule 424(b) under the Securities
Act with respect to the offer and sale of the Certificates.
"Prospectus Supplement" means the Prospectus Supplement dated March 16,
1998, relating to the offering of the Certificates in the form in which it was
or will be filed with the Commission pursuant to Rule 424(b) under the
Securities Act with respect to the offer and sale of the Certificates.
"Purchase Agreement and Assignment" means the Agreement dated as of
March 1, 1998 among the Originator, the Unaffiliated Seller and Emergent Group,
Inc.
"Registration Statement" means that certain registration statement on
Form S-3, as amended (Registration No. 333-27355) relating to the offering by
the Depositor from
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time to time of its pass-through certificates (issuable in series) as heretofore
declared effective by the Commission.
"Related Documents" means the Insurance Agreement dated as of March 1,
1998 among the Originator, the Unaffiliated Seller, Emergent Group, the
Servicer, the Depositor, Financial Security Assurance Inc. and the
Indemnification Agreement dated as of March 16, 1998 among the Originator, the
Unaffiliated Seller, Emergent Group, the Depositor, Prudential Securities
Incorporated, First Union Capital Markets and Financial Security Assurance Inc.
"Schedule of Mortgage Loans" means the schedule of Mortgage Loans and
related mortgage notes attached hereto as Schedule A.
"Securities Act" means the Securities Act of 1933, as amended.
"Termination Event" means the existence of any one or more of the
following conditions:
(a) A stop order suspending the effectiveness of the Registration
Statement shall have been issued or a proceeding for that
purpose shall have been initiated or threatened by the
Commission; or
(b) Subsequent to the execution and delivery of this Agreement, a
downgrading, or public notification of a possible change,
without indication of direction, shall have occurred in the
rating accorded any of the debt securities or claims paying
ability of any person providing any form of credit enhancement
for any of the Certificates, by any "nationally recognized
statistical rating organization," as that term is defined by
the Commission for purposes of Rule 436(g)(2) under the
Securities Act; or
(c) Subsequent to the execution and delivery of this Agreement,
there shall have occurred an adverse change in the condition,
financial or otherwise, earnings, affairs, regulatory
situation or business prospects of the Certificate Insurer or
the Unaffiliated Seller reasonably determined by the Depositor
to be material; or
(d) Subsequent to the date of this Agreement there shall have
occurred any of the following: (i) a suspension or material
limitation in trading in securities substantially similar to
the Certificates; (ii) a general moratorium on commercial
banking activities in New York declared by either Federal or
New York State authorities; or (iii) the engagement by the
United States in hostilities, or the escalation of such
hostilities, or any calamity or crisis, if the effect of any
such event specified in this clause (iii) in the reasonable
judgment of the Depositor makes it impracticable or
inadvisable to proceed with the public offering or the
delivery of the Certificates on the terms and in the manner
contemplated in the Prospectus Supplement.
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"Unaffiliated Seller" means Emergent Mortgage Holdings Corporation, in
its capacity as Unaffiliated Seller of the Mortgage Loans under this Agreement
and any successor to Emergent Mortgage Holdings Corporation, whether through
merger, consolidation, purchase and assumption of Emergent Mortgage Holdings
Corporation or all or substantially all of its assets or otherwise.
"Unaffiliated Seller Repurchase Event" means the occurrence of a breach
of any of the Unaffiliated Seller's representations and warranties under Section
3.02 herein.
Capitalized terms used herein that are not otherwise defined shall have
the respective meanings ascribed thereto in the Pooling and Servicing Agreement.
ARTICLE TWO
PURCHASE, SALE AND CONVEYANCE OF THE MORTGAGE LOANS
Section 2.01. Agreement to Purchase Mortgage Loans. Subject to the
terms and conditions of this Agreement, the Unaffiliated Seller hereby sells,
transfers, assigns, and otherwise conveys to the Depositor without recourse (but
without limitation of its obligations and representations in this Agreement),
and the Depositor hereby purchases, all right, title and interest of the
Unaffiliated Seller in and to the Mortgage Loans and the Other Conveyed Property
relating thereto. It is the intention of the Unaffiliated Seller and the
Depositor that the transfer and assignment contemplated by this Agreement shall
constitute a sale of the Mortgage Loans and the Other Conveyed Property relating
thereto from the Unaffiliated Seller to the Depositor, conveying good title
thereto free and clear of any Liens, and such Mortgage Loans and Other Conveyed
Property shall not be part of the Unaffiliated Seller's estate in the event of
the filing of a bankruptcy petition by or against the Unaffiliated Seller under
any bankruptcy or similar law.
Section 2.02. Purchase Price. On the Closing Date, as full
consideration for the Unaffiliated Seller's sale of the Mortgage Loans and the
Other Conveyed Property relating thereto to the Depositor, the Depositor will
deliver to the Unaffiliated Seller (i) an amount in cash equal to
$62,945,048.26, less certain expenses and (ii) the Residual Certificate to be
issued pursuant to the Pooling and Servicing Agreement.
Section 2.03. Delivery of Mortgage Loan Files. On or prior to the
Closing Date, the Unaffiliated Seller shall deliver or shall cause to be
delivered to the Trustee, or Trust Administrator on behalf of the Trustee, (as
assignee of the Depositor pursuant to the Pooling and Servicing Agreement) the
documents listed in Section 2.02(a) of the Pooling and Servicing Agreement with
respect to each Mortgage Loan being sold to the Depositor on such date.
Section 2.04. Transfer of Mortgage Loans; Assignment of Agreement. The
Depositor has the right to assign its interest under this Agreement to the
Trustee, or Trust Administrator on behalf of the Trustee, as may be required to
effect the purposes of the Pooling and Servicing Agreement, without further
notice to, or consent of, the Unaffiliated Seller, the Trustee and the Trust
Administrator shall succeed to such of the rights and obligations of the
Depositor hereunder as shall be so assigned. The Depositor
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shall, pursuant to the Pooling and Servicing Agreement, assign all of its right,
title and interest in and to the Mortgage Loans and its right to exercise the
remedies created by this Section 2.04 and Section 3.05 hereof to the Trustee, or
Trust Administrator on behalf of the Trustee, for the benefit of the
Certificateholders. The Unaffiliated Seller agrees that, upon such assignment to
the Trustee, or Trust Administrator on behalf of the Trustee, such
representations, warranties, agreements and covenants will run to and be for the
benefit of the Trustee and the Trust Administor and the Trustee and the Trust
Administor may enforce diligently, without joinder of the Depositor, the
repurchase obligations of the Unaffiliated Seller set forth herein with respect
to breaches of such representations, warranties, agreements and covenants.
Section 2.05. Examination of Mortgage Loan File. Prior to the Closing
Date, the Unaffiliated Seller shall make the Mortgage Files available to the
Depositor or its designee for examination at the Unaffiliated Seller's offices
or at such other place as the Unaffiliated Seller shall reasonably specify. Such
examination may be made by the Depositor or its designee at any time on or
before the Closing Date. If the Depositor or its designee makes such examination
prior to the Closing Date, and identifies any Mortgage Loans that do not conform
to the requirements of the Depositor as described in this Agreement, such
Mortgage Loans shall be deleted from the Schedule of Mortgage Loans. The
Depositor may, at its option and without notice to the Unaffiliated Seller,
purchase all or part of the Mortgage Loans without conducting any partial or
complete examination. The fact that the Depositor, the Trustee or the Trust
Administrator has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not affect the rights of the Depositor,
the Trustee or the Trust Administrator to demand repurchase or other relief as
provided in this Agreement.
Section 2.06. Books and Records. The sale of each Mortgage Loan shall
be reflected on the Unaffiliated Seller's balance sheet and other financial
statements as a sale of assets by the Unaffiliated Seller. The Unaffiliated
Seller shall be responsible for maintaining, and shall maintain, a complete set
of books and records for each Mortgage Loan which shall be clearly marked to
reflect the ownership of each Mortgage Loan by the Trustee or Trust
Administrator on behalf of the Trustee, for the benefit of the
Certificateholders and the Certificate Insurer.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties as to the Unaffiliated
Seller. The Unaffiliated Seller hereby represents and warrants to the Depositor,
as of the Closing Date, that:
(a) Organization and Good Standing. The Unaffiliated Seller has
been duly organized and is validly existing as a corporation
in good standing under the laws of the State of Delaware, with
power and authority to own its properties and to conduct its
business as such properties are currently owned and such
business is currently conducted, and had at all relevant
times, and now has, power,
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authority and legal right to acquire, own and sell the
Mortgage Loans and the Other Conveyed Property transferred to
the Depositor;
(b) Due Qualification. The Unaffiliated Seller is duly qualified
to do business as a foreign corporation in good standing, and
has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of its property
or the conduct of its business requires such qualification;
(c) Power and Authority. The Unaffiliated Seller has the power and
authority to execute and deliver this Agreement and to carry
out its terms; the Unaffiliated Seller has full power and
authority to sell and assign the Mortgage Loans and the Other
Conveyed Property to be sold and assigned to and deposited
with the Depositor by it and has duly authorized such sale and
assignment to the Depositor by all necessary corporate action;
the execution, delivery and performance of this Agreement and
the Related Documents to which it is a party have been duly
authorized by the Unaffiliated Seller by all necessary
corporate action; and this Agreement has been duly and validly
executed and delivered by the Unaffiliated Seller;
(d) Valid Sale; Binding Obligations. This Agreement shall effect a
valid sale, transfer and assignment of the Mortgage Loans and
the Other Conveyed Property, enforceable against the
Unaffiliated Seller and creditors of and purchasers from the
Unaffiliated Seller; and this Agreement constitutes a legal,
valid and binding obligation of the Unaffiliated Seller
enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement
of creditors' rights generally and by equitable limitations on
the availability of specific remedies, regardless of whether
such enforceability is considered in a proceeding in equity or
at law;
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the
terms of this Agreement shall not conflict with, result in any
breach of any of the terms and provisions of or constitute
(with or without notice, lapse of time or both) a default
under, the certificate of incorporation or by-laws of the
Unaffiliated Seller, or any material indenture, agreement,
mortgage, deed of trust or other instrument to which the
Unaffiliated Seller is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other
than this Agreement, or violate any law, order, rule or
regulation applicable
6
to the Unaffiliated Seller of any court or of any federal or
state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the
Unaffiliated Seller or any of its properties;
(f) No Proceedings. There are no material proceedings or
investigations pending or, to the Unaffiliated Seller's
knowledge, threatened against the Unaffiliated Seller, before
any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction
over the Unaffiliated Seller or its properties (i) asserting
the invalidity of this Agreement, (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement, (iii) seeking any
determination or ruling that might materially and adversely
affect the performance by the Unaffiliated Seller of its
obligations under, or the validity or enforceability of, this
Agreement, (iv) involving the Unaffiliated Seller and which
might adversely affect the federal income tax or other
federal, state or local tax attributes of the Certificates, or
(v) that could have a material adverse effect on the Mortgage
Loans;
(g) Approvals. All approvals, authorizations, consents, orders or
other actions of any person, corporation or other
organization, or of any court, governmental agency or body or
official, required in connection with the execution and
delivery by the Unaffiliated Seller of this Agreement and the
consummation of the transactions contemplated hereby have been
or will be taken or obtained on or prior to the Closing Date;
and
(h) Chief Executive Office. The chief executive office of the
Unaffiliated Seller is at 00 Xxxx Xxxxxxxxxx Xxx, Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx.
Section 3.02. Representations and Warranties Relating to the Mortgage
Loans. The Unaffiliated Seller represents and warrants to the Depositor, as of
the Closing Date, as to each Mortgage Loan, that immediately prior to the sale
and transfer of the relevant Mortgage Loans on such date by the Unaffiliated
Seller to the Depositor:
(a) The information with respect to each Mortgage Loan set forth
in the Schedule of Mortgage Loans is true and correct as of
the related Cut-off Date;
(b) All of the original or certified documentation required to be
delivered to the Trustee, or the Trust Administrator on behalf
of the Trustee, pursuant to the Pooling and Servicing
Agreement (including all material documents related thereto)
with respect to each Mortgage Loan has been or will be
delivered to the Trustee,
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or the Trust Administrator on behalf of the Trustee, in
accordance with the terms of such Pooling and Servicing
Agreement. Each of the documents and instruments specified to
be included therein has been duly executed and in due and
proper form, and each such document or instrument is in a form
generally acceptable to prudent mortgage lenders that
regularly originate or purchase mortgage loans comparable to
the Mortgage Loans for sale to prudent investors in the
secondary market that invest in mortgage loans such as the
Mortgage Loans;
(c) Each Mortgaged Property is improved by a single (one-to-four)
family residential dwelling, which may include condominiums,
townhouses and units in planned unit developments, or
manufactured housing, but shall not include cooperatives;
(d) No Mortgage Loan had a Loan-to-Value Ratio in excess of
90.000%;
(e) Each Mortgage is a valid and subsisting first lien of record
on the Mortgaged Property subject in all cases to the
exceptions to title set forth in the title insurance policy,
with respect to the related Mortgage Loan, which exceptions
are generally acceptable to banking institutions in connection
with their regular mortgage lending activities, and such other
exceptions to which similar properties are commonly subject
and which do not individually, or in the aggregate, materially
and adversely affect the benefits of the security intended to
be provided by such Mortgage;
(f) Immediately prior to the transfer and assignment herein
contemplated, the Unaffiliated Seller held good and
indefeasible title to, and was the sole owner of, each
Mortgage Loan conveyed by it subject to no Liens, except Liens
which will be released simultaneously with such transfer and
assignment and subordinate Liens on the related Mortgaged
Property;
(g) As of the related Cut-off Date, no Mortgage Loan is 30 or more
days delinquent;
(h) There is no delinquent tax or assessment lien on any Mortgaged
Property, and each Mortgaged Property is free of substantial
damage and is in good repair;
(i) There is no valid and enforceable right of rescission, offset,
defense or counterclaim to any Mortgage Note or Mortgage,
including the obligation of the related Mortgagor to pay the
unpaid principal of or interest on such Mortgage Note or the
defense of usury, nor will the operation of any of the terms
of the Mortgage Note or the Mortgage, or the exercise of any
right thereunder,
8
render either the Mortgage Note or the Mortgage unenforceable
in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim
or defense has been asserted with respect thereto;
(j) There is no mechanics' lien or claim for work, labor or
material affecting any Mortgaged Property which is or may be a
lien prior to, or equal with, the lien of the related Mortgage
except those which are insured against by any title insurance
policy referred to in paragraph (l) below;
(k) Each Mortgage Loan at the time it was made complied in all
material respects with all applicable state and federal laws
and regulations, including, without limitation, the federal
Truth-in-Lending Act and other consumer protection laws, real
estate settlement procedure, usury, equal credit opportunity,
disclosure and recording laws;
(l) With respect to each Mortgage Loan, a lender's title insurance
policy, issued in standard American Land Title Association
form, or other form acceptable in a particular jurisdiction by
a title insurance company authorized to transact business in
the state in which the related Mortgaged Property is situated,
in an amount at least equal to the initial Stated Principal
Balance of such Mortgage Loan insuring the mortgagee's
interest under the related Mortgage Loan as the holder of a
valid first mortgage lien of record on the real property
described in the related Mortgage, as the case may be, subject
only to exceptions of the character referred to in paragraph
(e) above, was effective on the date of the origination of
such Mortgage Loan, and, as of the Cut-off Date such policy
will be valid and thereafter such policy shall continue in
full force and effect;
(m) The improvements upon each Mortgaged Property are covered by a
valid and existing hazard insurance policy (which may be a
blanket policy of the type described in the related Pooling
and Servicing Agreement) with a generally acceptable carrier
that provides for fire and extended coverage representing
coverage not less than the least of (A) the outstanding
principal balance of the related Mortgage Loan and (B) the
minimum amount required to compensate for damage or loss on a
replacement cost basis;
(n) If any Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy (which
may be a blanket policy of the type described in the Pooling
and Servicing Agreement) in a form meeting the requirements of
the current
9
guidelines of the Federal Insurance Administration is in
effect with respect to such Mortgaged Property with a
generally acceptable carrier in an amount representing
coverage not less than the least of (A) the outstanding
principal balance of the related Mortgage Loan and (B) the
maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973;
(o) Each Mortgage and Mortgage Note is the legal, valid and
binding obligation of the maker thereof and is enforceable in
accordance with its terms, except only as such enforcement may
be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of
equity (whether considered in a proceeding or action in equity
or at law), and all parties to each Mortgage Loan had full
legal capacity to execute all documents relating to such
Mortgage Loan and convey the estate therein purported to be
conveyed;
(p) The Unaffiliated Seller has caused and will cause to be
performed any and all acts required to be performed to
preserve the rights and remedies of the servicer in any
insurance policies applicable to any Mortgage Loans delivered
by such Unaffiliated Seller including, to the extent such
Mortgage Loan is not covered by a blanket policy described in
the Pooling and Servicing Agreement, any necessary
notifications of insurers, assignments of policies or
interests therein, and establishments of co-insured, joint
loss payee and mortgagee rights in favor of the servicer;
(q) Each original Mortgage was recorded or is in the process of
being recorded, and all subsequent assignments of the original
Mortgage have been recorded or are in the process of being
recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof for the
benefit of the Trustee, or the Trust Administrator on behalf
of the Trustee, subject to the provisions of Section 2.02 of
the Pooling and Servicing Agreement;
(r) The terms of each Mortgage Note and each Mortgage have not
been impaired, altered or modified in any respect, except by a
written instrument which has been recorded, if necessary, to
protect the interest of the owners and which has been
delivered to the Trustee, or the Trust Administrator on behalf
of the Trustee;
(s) The proceeds of each Mortgage Loan have been fully disbursed,
and there is no obligation on the part of the mortgagee to
make future advances thereunder. Any and all requirements as
to completion of any on-site or off-site improvements and as
to disbursements of any escrow funds therefor have been
complied with. All costs, fees and expenses incurred in making
or closing or
10
recording such Mortgage Loans have been paid;
(t) Except as otherwise required by law or pursuant to the statute
under which the related Mortgage Loan was made, the related
Mortgage Note is not and has not been secured by any
collateral, pledged account or other security except the lien
of the corresponding Mortgage;
(u) No Mortgage Loan was originated under a buydown plan;
(v) No Mortgage Loan provides for negative amortization, has a
shared appreciation feature, or other contingent interest
feature;
(w) Each Mortgaged Property is located in the state identified in
the Schedule of Mortgage Loans, and consists of one or more
parcels of real property with a residential dwelling thereon;
(x) Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related
Mortgage Loan in the event the related Mortgaged Property is
sold without the prior consent of the mortgagee thereunder;
(y) Any advances made after the date of origination of a Mortgage
Loan but prior to the Cut-off Date, have been consolidated
with the outstanding principal amount secured by the related
Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term
reflected on the Schedule of Mortgage Loans. The consolidated
principal amount does not exceed the original principal amount
of the related Mortgage Loan. No Mortgage Note permits or
obligates the Originator to make future advances to the
related Mortgagor at the option of the Mortgagor;
(z) There is no proceeding pending or threatened for the total or
partial condemnation of any Mortgaged Property, nor is such a
proceeding currently occurring, and each Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, flood,
tornado or other casualty, so as to affect adversely the value
of the Mortgaged Property as security for the Mortgage Loan or
the use for which the premises were intended;
(aa) All of the improvements of any Mortgaged Property lie wholly
within the boundaries and building restriction lines of such
Mortgaged Property, and no improvements on adjoining
properties encroach upon such Mortgaged Property, and, if a
title insurance policy exists with respect to such Mortgaged
Property, are stated in such title insurance policy and
affirmatively insured;
(bb) No improvement located on or being part of any Mortgaged
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Property is in violation of any applicable zoning law or
regulation. All inspections, licenses and certificates
required to be made or issued with respect to all occupied
portions of each Mortgaged Property and, with respect to the
use and occupancy of the same, including, but not limited to,
certificates of occupancy and fire underwriting certificates,
have been made or obtained from the appropriate authorities
and such Mortgaged Property is lawfully occupied under the
applicable law;
(cc) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is
named in such Mortgage, and no fees or expenses are or will
become payable by the Originator or the Trust Fund to the
trustee under the deed of trust, except in connection with a
trustee's sale after default by the related Mortgagor;
(dd) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged
Property of the benefits of the security, including (A) in the
case of a Mortgage designated as a deed of trust, by trustee's
sale and (B) otherwise by judicial foreclosure. There is no
homestead or other exemption available which materially
interferes with the right to sell the related Mortgaged
Property at a trustee's sale or the right to foreclose the
related Mortgage;
(ee) There is no default, breach, violation or event of
acceleration existing under any Mortgage or the related
Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of
acceleration; and neither the Originator or the Unaffiliated
Seller has waived any default, breach, violation or event of
acceleration;
(ff) No instrument of release or waiver has been executed in
connection with any Mortgage Loan, and no Mortgagor has been
released, in whole or in part;
(gg) The credit underwriting guidelines applicable to each Mortgage
Loan conform in all material respects to the Originator's
underwriting guidelines;
(hh) All parties to the Mortgage Note and the Mortgage had legal
capacity to execute the Mortgage Note and the Mortgage and
each Mortgage Note and Mortgage have been duly and properly
executed by such parties;
12
(ii) The Unaffiliated Seller has no actual knowledge that there
exist on any Mortgaged Property any hazardous substances,
hazardous wastes or solid wastes, as such terms are defined in
the Comprehensive Environmental Response Compensation and
Liability Act, the Resource Conservation and Recovery Act of
1976, or other federal, state or local environmental
legislation;
(jj) None of the Mortgage Loans shall be due from the United States
of America or any State or from any agency, department,
subdivision or instrumentality thereof;
(kk) At the Cut-off Date, no Mortgagor had been identified on the
records of the Originator as being the subject of a current
bankruptcy proceeding;
(ll) By the Closing Date, the Unaffiliated Seller will have caused
the portions of the Unaffiliated Seller's records relating to
the Mortgage Loans to be clearly and unambiguously marked to
show that such Loans constitute part of the Trust Fund and are
owned by the Trust Fund in accordance with the terms of the
Pooling and Servicing Agreement.
(mm) No Mortgage Loan was originated in, or is subject to the laws
of, any jurisdiction the laws of which would make unlawful,
void or voidable the sale, transfer and assignment of such
Mortgage Loan under this Agreement or pursuant to transfers of
the Certificates. The Unaffiliated Seller has not entered into
any agreement with any account debtor that prohibits,
restricts or conditions the assignment of any portion of the
Mortgage Loans;
(nn) All filings (including, without limitation, UCC filings)
required to be made by any Person and actions required to be
taken or performed by any Person in any jurisdiction to give
the Trustee, or the Trust Administrator on behalf of the
Trustee, a first priority perfected lien on, or ownership
interest in, the Mortgage Loans and the proceeds thereof and
the other property of the Trust Fund have been made, taken or
performed;
(oo) The Unaffiliated Seller has not done anything to convey any
right to any Person that would result in such Person having a
right to payments due under the Mortgage Loan or otherwise to
impair the rights of the Trust Fund and the Certificateholders
in any Mortgage Loan or the proceeds thereof;
(pp) No Mortgage Loan is assumable (without the consent of the
Originator which consent has not been given) by another Person
in a manner which would release the Mortgagor thereof from
such Mortgagor's obligations to the Unaffiliated Seller with
respect to
13
such Mortgage Loan;
(qq) With respect to the Mortgage Loans as of the Cut-off Date: the
aggregated Stated Principal Balance was $63,027,521.83; each
of the Stated Principal Balances was at least $9,850.00 but no
more than $468,000.00; the average Stated Principal Balance
was $65,173.62; the Mortgage Rates were at least 8.440% but no
more than 15.954%; the weighted average Mortgage Rate was
11.005%; the original Loan-to-Value Ratios were at least
12.000% but no more than 90.000%; the weighted average
original Loan-to-Value Ratio was 77.108%; the remaining terms
to stated maturity were at least 48 months but no more than
360 months; the weighted average remaining term to stated
maturity was 208 months; the original terms to stated maturity
were at least 48 months but no more than 361 months; the
weighted average original term to stated maturity was 209
months; and no more than 0.743% of the Stated Principal
Balance of the Mortgage Loans are secured by Mortgaged
Properties located in any one postal zip code area;
(rr) No selection procedures adverse to the Certificateholders or
to the Certificate Insurer have been utilized in selecting
such Mortgage Loan from all other similar Mortgage Loans
originated by the Originator;
(ss) The related Mortgaged Property has not been subject to any
foreclosure proceeding or litigation;
(tt) There was no fraud involved in the origination of the Mortgage
Loan by the mortgagee or the Mortgagor, any appraiser or any
other party involved in the origination of the Mortgage Loan;
(uu) Each Mortgage File contains an appraisal of the Mortgaged
Property indicating an appraised value equal to the appraised
value of such Mortgaged Property on the Mortgage Loan
Schedule. Each appraisal has been performed in accordance with
the requirements of FNMA or FHLMC; and
(vv) Each Mortgage Loan is a "qualified mortgage" as defined in
Section 860G(a)(3) of the Code.
Section 3.03. Covenants of the Unaffiliated Seller. The Unaffiliated
Seller covenants to the Depositor as follows:
(a) The Unaffiliated Seller shall cooperate with the Depositor and
the firm of independent certified public accountants retained
with respect to the issuance of the Certificates in making
available all information and taking all steps reasonably
necessary to permit the accountants' letters required
hereunder to be delivered within the times set for delivery
herein;
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(b) The Unaffiliated Seller agrees to satisfy or cause to be
satisfied on or prior to the Closing Date all of the
conditions to the Depositor's obligations set forth in Section
5.01 hereof that are within the Unaffiliated Seller's (or its
agents') control;
(c) The Unaffiliated Seller hereby agrees to do all acts,
transactions, and things and to execute and deliver all
agreements, documents, instruments, and papers by and on
behalf of the Unaffiliated Seller as the Depositor or its
counsel may reasonably request in order to consummate the
transfer of the Mortgage Loans to the Depositor and the
subsequent transfer thereof to the Trustee, and the rating,
issuance and sale of the Certificates; and
(d) The Unaffiliated Seller hereby agrees to arrange separately to
pay to the Trustee and the Trust Administrator all of the
Trustee's and Trust Administrator's fees and expenses in
connection with the transactions contemplated by the Pooling
and Servicing Agreement, including, without limitation, all of
the Trustee's and Trust Administrator's fees and expenses in
connection with any actions taken by the Trustee or the Trust
Administrator pursuant to Section 8.10 thereof. For the
avoidance of doubt, the parties hereto acknowledge that it is
the intention of the parties that the Depositor shall not pay
any of the Trustee's or Trust Administrator's fees and
expenses in connection with the transactions contemplated by
the Pooling and Servicing Agreement.
Section 3.04. Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Unaffiliated Seller,
as of the date of execution of this Agreement, and as of the Closing Date, that:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware;
(b) The Depositor has the corporate power and authority to
purchase each Mortgage Loan and to execute, deliver and
perform, and to enter into and consummate all the transactions
contemplated by this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, and, assuming the due
authorization, execution and delivery hereof by the
Unaffiliated Seller, constitutes the legal, valid and binding
agreement of the Depositor, enforceable against the Depositor
in accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity
principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
15
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental
authority or court is required for the execution, delivery and
performance of or compliance by the Depositor with this
Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except such as have been
made on or prior to the Closing Date;
(e) The Depositor has filed or will file the Prospectus and
Prospectus Supplement with the Commission in accordance with
Rule 424(b) under the Securities Act; and
(f) None of the execution and delivery of this Agreement, the
purchase of the Mortgage Loans from the Unaffiliated Seller,
the consummation of the other transactions contemplated
hereby, or the fulfillment of or compliance with the terms and
conditions of this Agreement, (i) conflicts or will conflict
with the charter or bylaws of the Depositor or conflicts or
will conflict with or results or will result in a breach of,
or constitutes or will constitute a default or results or will
result in an acceleration under, any term, condition or
provision of any indenture, deed of trust, contract or other
agreement or other instrument to which the Depositor is a
party or by which it is bound and which is material to the
Depositor, or (ii) results or will result in a violation of
any law, rule, regulation, order, judgment or decree of any
court or governmental authority having jurisdiction over the
Depositor.
Section 3.05. Repurchase Obligation for Breach of a Representation or
Warranty. Each of the representations and warranties contained in Sections 3.01
and 3.02 shall survive the purchase by the Depositor of the Mortgage Loans and
the subsequent transfer thereof by the Depositor to the Trustee, or the Trust
Administrator on behalf of the Trustee, and shall continue in full force and
effect, notwithstanding any restrictive or qualified endorsement on the Mortgage
Loans and notwithstanding subsequent termination of this Agreement or the
Pooling and Servicing Agreement.
(a) Upon the occurrence of a breach of any of the Unaffiliated
Seller's representations and warranties under Section 3.02
hereof that materially and adversely affects the related
Mortgage Loan, the Unaffiliated Seller shall, unless such
breach shall have been cured in all material respects or
unless the Originator shall have repurchased such Mortgage
Loan, repurchase the related Mortgage Loan within 60 days
following discovery by or notice to the Unaffiliated Seller of
such breach pursuant to Section 2.04 of the Pooling and
Servicing Agreement, and, the Unaffiliated Seller shall pay
the Purchase Price to the Trust Administrator on behalf of the
Trustee pursuant to the Pooling and Servicing Agreement. To
the extent such Unaffiliated Seller fails to effect its
repurchase obligation, Emergent Group shall repurchase the
related Mortgage
16
Loans and pay the Purchase Price to the Trust Administrator on
behalf of the Trustee on such date. The provisions of this
Section 3.05 are intended to grant the Trustee and the Trust
Administrator a direct right against the Unaffiliated Seller
and the Emergent Group to demand performance hereunder, and in
connection therewith, the Unaffiliated Seller and Emergent
Group waive any requirement of prior demand against the
Depositor with respect to such repurchase obligation. Any such
purchase resulting from the Unaffiliated Seller Repurchase
Event shall take place in the manner specified in Section 2.04
of the Pooling and Servicing Agreement. Notwithstanding any
other provision of this Agreement or the Pooling and Servicing
Agreement to the contrary, the obligation of the Unaffiliated
Seller and Emergent Group under this Section shall be
performed in accordance with the terms hereof notwithstanding
the failure of the Depositor or the Servicer to perform any of
their respective obligations with respect to such Mortgage
Loan under this Agreement or under the Pooling and Servicing
Agreement.
(b) In addition to the foregoing and notwithstanding whether the
related Mortgage Loan shall have been purchased by the
Unaffiliated Seller or Emergent Group, the Unaffiliated Seller
shall indemnify the Depositor, the Trustee, the Trust
Administrator, the Certificate Insurer, Emergent Group and the
Certificateholders against all costs, expenses, losses,
damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred
by any of them as a result of third party claims arising out
of the events or facts giving rise to Unaffiliated Seller
Repurchase Events.
Section 3.06. Reassignment of Purchased Mortgage Loans. Upon deposit in
the Collection Account of the Purchase Price of any Mortgage Loan repurchased by
the Unaffiliated Seller under Section 3.05 hereof, the Depositor and the
Trustee, or the Trust Administrator on behalf of the Trustee, shall take such
steps as may be reasonably requested by the Unaffiliated Seller in order to
assign to the Unaffiliated Seller all of the Depositor's and the Trust Fund's
right, title and interest in and to such Mortgage Loan and all security and
documents and all Other Conveyed Property conveyed to the Depositor and the
Trust Fund directly relating thereto, without recourse, representation or
warranty, except as to the absence of Liens created by or arising as a result of
actions of the Depositor, the Trustee or the Trust Administrator. Such
assignment shall be a sale and assignment outright, and not for security. If,
following the reassignment of a Purchased Mortgage Loan, in any enforcement suit
or legal proceeding, it is held that the Unaffiliated Seller may not enforce any
such Mortgage Loan on the ground that it shall not be a real party in interest
or a holder entitled to enforce the Mortgage Loan, the Depositor and the
Trustee, or the Trust Administrator on behalf of the Trustee, shall, at the
expense of the Unaffiliated Seller, take such steps as the Unaffiliated Seller
deems reasonably necessary to enforce the Mortgage Loan, including bringing suit
in the Depositor's, the Trustee's or the Trust Administrator's name or the names
of the
17
Certificateholders.
Section 3.07. Waivers. No failure or delay on the part of the Depositor
or the Trustee or the Trust Administrator as assignee of the Depositor, in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other or future exercise thereof or the exercise of
any other power, right or remedy.
Section 3.08. Representations and Warranties of Emergent Group.
Emergent Group hereby represents and warrants to the Depositor as of the date of
execution of this Agreement, and as of the Closing Date, that:
(a) Emergent Group is a corporation duly organized, validly
existing and in good standing under the laws of the State of
South Carolina;
(b) Emergent Group has the corporate power and authority to
execute, deliver and perform, and to enter into and consummate
all the transactions contemplated by this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by Emergent Group, and constitutes the legal,
valid and binding agreement of Emergent Group, enforceable
against Emergent Group in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental
authority or court is required for the execution, delivery and
performance of or compliance by Emergent Group with this
Agreement or the consummation by Emergent Group of any of the
transactions contemplated hereby or thereby, except such as
have been made on or prior to the Closing Date; and
(e) None of the execution and delivery of this Agreement, the
consummation of the other transactions contemplated hereby, or
the fulfillment of or compliance with the terms and conditions
of this Agreement, (i) conflicts or will conflict with the
charter or bylaws of Emergent Group or conflicts or will
conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will
result in an acceleration under, any term, condition or
provision of any material indenture, deed of trust, contract
or other agreement or other instrument to which Emergent Group
is a party or by which it is bound and which is material to
Emergent Group, or (ii) results or will result in a violation
of any
18
law, rule, regulation, order, judgment or decree of any court
or governmental authority having jurisdiction over Emergent
Group.
ARTICLE FOUR
THE UNAFFILIATED SELLER
Section 4.01. Liability of the Unaffiliated Seller. The Unaffiliated
Seller shall be liable in accordance herewith only to the extent of the
obligations in this Agreement specifically undertaken by such Unaffiliated
Seller and its representations and warranties.
Section 4.02. Merger or Consolidation. The Unaffiliated Seller will
keep in full effect its existence, rights and franchises as a corporation and
will obtain and preserve its qualification to do business as a foreign
corporation, in each jurisdiction necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any corporation or other entity (i) into which the Unaffiliated Seller
or Emergent Group may be merged or consolidated, (ii) resulting from any merger
or consolidation to which the Unaffiliated Seller or Emergent Group is a party
or (iii) succeeding to the business of the Unaffiliated Seller or Emergent
Group, which corporation has a certificate of incorporation containing
provisions relating to limitations on business and other matters substantively
identical to those contained in the Unaffiliated Seller's certificate of
incorporation, shall execute an agreement of assumption to perform every
obligation of the Unaffiliated Seller or Emergent Group, as the case may be,
under this Agreement and, whether or not such assumption agreement is executed,
shall be the successor to the Unaffiliated Seller or Emergent Group, as the case
may be, hereunder (without relieving the Unaffiliated Seller or Emergent Group,
as the case may be, of its responsibilities hereunder, if it survives such
merger or consolidation) without the execution or filing of any document or any
further act by any of the parties to this Agreement. Notwithstanding the
foregoing, so long as a Certificate Insurer Default shall not have occurred and
be continuing, the Unaffiliated Seller shall not merge or consolidate with any
other Person or permit any other Person to become the successor to the
Unaffiliated Seller's business without the prior written consent of the
Certificate Insurer. The Unaffiliated Seller or Emergent Group, as the case may
be, shall promptly inform the other party, the Trustee, the Trust Administrator
and, so long as a Certificate Insurer Default shall not have occurred and be
continuing, the Certificate Insurer of such merger, consolidation or purchase
and assumption. Notwithstanding the foregoing, as a condition to the
consummation of the transactions referred to in clauses (i), (ii) and (iii)
above, (x) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Sections 3.01, 3.02 and 3.08 or
covenant made pursuant to Section 3.03, shall have been breached (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction) and no event that, after notice or lapse of
time, or both, would become an event of default under the Insurance Agreement,
shall have occurred and be continuing, (y) the Unaffiliated Seller or Emergent
Group, as the case may be, shall have delivered to the Trustee and the Trust
Administrator an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation, merger or succession and such agreement of assumption
comply with this Section 4.02
19
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and (z) the Unaffiliated
Seller shall have delivered to the Trustee and the Trust Administrator an
Opinion of Counsel, stating, in the opinion of such counsel, either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary to preserve and protect the interest
of the Trustee and the Trust Administrator in the Trust Fund and reciting the
details of the filings or (B) no such action shall be necessary to preserve and
protect such interest.
Section 4.03. Costs. In connection with the transactions contemplated
under this Agreement and the Pooling and Servicing Agreement, the Unaffiliated
Seller shall promptly pay (or shall promptly reimburse the Depositor to the
extent that the Depositor shall have paid or otherwise incurred): (i) the fees
and disbursements of the Unaffiliated Seller's counsel; (ii) the fees of the
Depositor's counsel, not to exceed $175,000; (iii) the fees and disbursements of
Ernst & Young, the Unaffiliated Seller's independent certified public
accountants, in rendering a comfort letter in connection with the Prospectus
Supplement and in comforting the Derived Information; (iv) the fees of Standard
& Poor's Ratings Group and Xxxxx'x Investors Service, Inc.; (v) the fees of the
Trustee and the Trust Administrator, the fees and disbursements of the Trustee's
and the Trust Administrator's counsel, if any and the fees of the Trustee and
the Trust Administrator for custodial acceptance and loan deposit; (vi) expenses
incurred in connection with printing the Prospectus, the Prospectus Supplement,
any amendment or supplement thereto, any preliminary prospectus and the
Certificates; (vii) fees and expenses relating to the filing of documents with
the Securities and Exchange Commission (including without limitation periodic
reports under the Exchange Act); (viii) the shelf registration amortization fee
paid in connection with the issuance of Certificates; and (ix) to the extent not
covered above, all of the initial upfront expenses of the Depositor and the
Underwriter including, without limitation, legal fees and expenses, accountant
fees and expenses and expenses in connection with due diligence conducted on the
Mortgage Loan File. The Unaffiliated Seller also will promptly pay (or shall
promptly reimburse the Depositor to the extent that the Depositor shall have
paid or otherwise incurred) all of the initial upfront expenses of the
Certificate Insurer including, without limitation, legal fees and expenses,
accountant fees and expenses and expenses in connection with due diligence
conducted on the Mortgage Loan File. All other costs and expenses in connection
with the transactions contemplated hereunder shall be borne by the party
incurring such expenses.
Section 4.04. Servicing. The Mortgage Loans shall be serviced by the
Servicer in accordance with the Pooling and Servicing Agreement.
Section 4.05. Mandatory Delivery. Each document specified in Section
2.02 of the Pooling and Servicing Agreement for each Mortgage Loan shall be
delivered to the Depositor on or before the Closing Date (except as otherwise
provided in such Section 2.02).
Section 4.06. Indemnification.
(a) (i) Emergent Group agrees to indemnify and hold
harmless the
20
Depositor, each of its directors, each of its
officers who have signed the Registration Statement,
Prudential Securities Incorporated and each of its
directors and each person or entity who controls the
Depositor or Prudential Securities Incorporated or
any such person, within the meaning of Section 15 of
the Securities Act, against any and all losses,
claims, damages or liabilities, joint and several, to
which the Depositor, Prudential Securities
Incorporated or any such person or entity may become
subject, under the Securities Act or otherwise, and
will reimburse the Depositor, Prudential Securities
Incorporated and each such controlling person for any
legal or other expenses incurred by the Depositor,
Prudential Securities Incorporated or such
controlling person in connection with investigating
or defending any such loss, claim, damage, liability
or action, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in
the Prospectus Supplement or any amendment or
supplement to the Prospectus Supplement or the
omission or the alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements in the Prospectus
Supplement or any amendment or supplement to the
Prospectus Supplement, in light of the circumstances
under which they were made, not misleading, except
insofar as such claims arise out of or are based upon
any untrue statement or omission in the FSA
Information or the Depositor Information. This
indemnity agreement will be in addition to any
liability which Emergent Group may otherwise have.
(ii) Emergent Group agrees to indemnify and to hold
each of the Depositor, the Trustee, the Trust
Administrator, the Certificate Insurer and each
Certificateholder harmless against any and all
claims, losses, penalties, fines, forfeitures, legal
fees and related costs, judgments, and any other
costs, fees and expenses that the Depositor, the
Trustee, the Trust Administrator, the Certificate
Insurer and any Certificateholder may sustain in any
way related to (1) the failure of the Unaffiliated
Seller or Emergent Group to perform its duties in
compliance with the terms of this Agreement or (2)
the breach by either the Unaffiliated Seller or
Emergent Group of any of the representations or
warranties made by it in this Agreement.
(b) The Depositor agrees to indemnify and hold harmless
the Unaffiliated Seller, each of its directors and
each person or entity who controls the Unaffiliated
Seller or any such person, within the meaning of
Section 15 of the Securities Act, against any and all
losses, claims, damages or liabilities, joint and
several, to which the Unaffiliated Seller or any such
person or entity may become subject, under the
Securities Act or otherwise, and will reimburse
21
the Unaffiliated Seller and any such director or
controlling person for any legal or other expenses
incurred by the Unaffiliated Seller or any such
director or controlling person in connection with
investigating or defending any such loss, claim,
damage, liability or action, insofar as such losses,
claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material
fact contained in the Registration Statement, the
Prospectus, the Prospectus Supplement, any amendment
or supplement to the Prospectus or the Prospectus
Supplement or the omission or the alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein,
in light of the circumstances under which they were
made, not misleading, but with respect to the
Prospectus Supplement, only to the extent that such
untrue statement or alleged untrue statement or
omission or alleged omission relates to the
information contained in the Prospectus Supplement
under the caption "Plan of Distribution" (the
information contained under the caption "Plan of
Distribution" the "Depositor Information"). This
indemnity agreement will be in addition to any
liability which the Depositor may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 4.06 of notice of the commencement of
any action, such indemnified party will, if a claim
in respect thereof is to be made against the
indemnifying party under this Section 4.06, notify
the indemnifying party in writing of the commencement
thereof, but the omission to so notify the
indemnifying party will not relieve the indemnifying
party from any liability which the indemnifying party
may have to any indemnified party hereunder except to
the extent such indemnifying party has been
prejudiced thereby. In case any such action is
brought against any indemnified party, and it
notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may
elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice
from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such
indemnified party. After notice from the indemnifying
party to such indemnified party of its election to
assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under
this Section 4.06 for any legal or other expenses
subsequently incurred by such indemnified party in
connection with the defense thereof other than
reasonable costs of investigation; provided, however,
if the defendants in any such action include both the
indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded
that there may be legal defenses available to it that
are different from or additional to those available
to the indemnifying party, the indemnified party or
parties shall have the
22
right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense
of such action on behalf of such indemnified party or
parties. The indemnifying party shall not be liable
for the expenses of more than one separate counsel.
(d) The Depositor agrees, assuming all Emergent
Group-Provided Information (defined below) is
accurate and complete in all material respects, to
indemnify and hold harmless Emergent Group, its
respective officers and directors and each person who
controls Emergent Group within the meaning of the
Securities Act or the Exchange Act against any and
all losses, claims, damages or liabilities, joint or
several, to which they may become subject under the
Securities Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement of a
material fact contained in the Derived Information
provided by the Depositor, or arise out of or are
based upon the omission or alleged omission to state
therein a material fact required to be stated therein
or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection
with investigating or defending or preparing to
defend any such loss, claim, damage, liability or
action as such expenses are incurred. The obligations
of the Depositor under this Section 4.06(d) shall be
in addition to any liability which the Depositor may
otherwise have.
The procedures set forth in Section 4.06(c) shall be
equally applicable to this Section 4.06(d).
(e) For purposes of this Section 4.06, the term "Derived
Information" means such portion, if any, of the
information used by the Depositor for filing with the
Commission on Form 8-K as: (i) is not contained in
the Prospectus without taking into account
information incorporated therein by reference; and
(ii) does not constitute Emergent Group-Provided
Information. "Emergent Group-Provided Information"
means any computer tape furnished to the Depositor by
Emergent Group or the Originator concerning the
assets comprising the Trust Fund.
(f) In order to provide for just and equitable
contribution in circumstances in which the indemnity
agreement provided for in the preceding parts of this
Section 4.06 is for any reason held to be unavailable
to or insufficient to hold harmless an indemnified
party under subsection (a) or subsection (b) of this
Section 4.06 in respect of any losses, claims,
damages or liabilities (or actions in respect
thereof) referred to therein, the indemnifying party
shall
23
contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect
thereof); provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. In
determining the amount of contribution to which the
respective parties are entitled, there shall be
considered the relative benefits received by Emergent
Group and the Unaffiliated Seller on the one hand,
and the Depositor on the other, Emergent Group and
the Unaffiliated Seller's, Emergent Group's and the
Depositor's relative knowledge and access to
information concerning the matter with respect to
which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and
any other equitable considerations appropriate in the
circumstances. Emergent Group and the Unaffiliated
Seller and the Depositor agree that it would not be
equitable if the amount of such contribution were
determined by pro rata or per capita allocation. For
purposes of this Section 4.06, each director of the
Depositor, each officer of the Depositor who signed
the Registration Statement, and each person, if any
who controls the Depositor within the meaning of
Section 15 of the Securities Act, shall have the same
rights to contribution as the Depositor, and each
director of the Unaffiliated Seller, and each person,
if any who controls the Unaffiliated Seller within
the meaning of Section 15 of the Securities Act,
shall have the same rights to contribution as the
Unaffiliated Seller.
ARTICLE FIVE
CONDITIONS OF CLOSING
Section 5.01. Conditions of Depositor's Obligations. The obligations of
the Depositor to purchase the Mortgage Loans will be subject to the
satisfaction, on the Closing Date, of the following conditions. Upon payment of
the purchase price for the Mortgage Loans, such conditions shall be deemed
satisfied or waived.
(a) Each of the obligations of the Unaffiliated Seller
required to be performed by it on or prior to the
Closing Date pursuant to the terms of this Agreement
shall have been duly performed and complied with and
all of the representations and warranties of the
Unaffiliated Seller and Emergent Group under this
Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with
notice or the passage of time, would constitute a
default under this Agreement, and the Depositor shall
have received a certificate to the effect of the
foregoing signed by an authorized officer of the
Unaffiliated Seller.
(b) The Depositor shall have received a letter dated the
date of this
24
Agreement, in form and substance acceptable to the
Depositor and its counsel, prepared by Ernst & Young,
independent certified public accountants, regarding
the numerical information contained in the Prospectus
Supplement under the caption "The Mortgage Pool."
(c) [This subsection is reserved.]
(d) The Depositor shall have received the following
additional closing documents, in form and substance
satisfactory to the Depositor and its counsel:
(i) the Schedule of Mortgage Loans;
(ii) the Pooling and Servicing Agreement and the
Underwriting Agreement, dated as of March
16, 1998, between the Depositor and the
Underwriters named therein and all documents
required thereunder, duly executed and
delivered by each of the parties thereto
other than the Depositor;
(iii) an officer's certificate, dated as of the
Closing Date, in the form of Exhibit B
hereto, and attached thereto resolutions of
the board of directors of the Unaffiliated
Seller and a copy of the by-laws of the
Unaffiliated Seller;
(iv) copy of the Unaffiliated Seller's and
Emergent Group's charter and all amendments,
revisions, and supplements thereof,
certified as of a recent date by the
Secretary of State of the State of Delaware
and the State of South Carolina,
respectively;
(v) an opinion of the counsel for the
Unaffiliated Seller and Emergent Group as to
various corporate matters (it being agreed
that the opinion shall expressly provide
that the Trustee and the Trust Administrator
shall be entitled to rely on the opinion);
(vi) opinions of counsel for the Unaffiliated
Seller, in forms acceptable to the
Depositor, its counsel, Standard & Poor's
Ratings Group and Xxxxx'x Investors Service,
Inc. as to such matters as shall be required
for the assignment of a rating to the Class
A Certificates of "AAA" by Standard & Poor's
Ratings Group, and "Aaa" by Xxxxx'x
Investors Service, Inc. (it being agreed
that such opinions shall expressly provide
that the Trustee and the Trust Administrator
shall be entitled to rely on such opinions);
(vii) a letter from Xxxxx'x Investors Service,
Inc. that it has
25
assigned a rating of "Aaa" to the Class A
Certificates;
(viii) a letter from Standard & Poor's Ratings
Group that it has assigned a rating of "AAA"
to the Class A Certificates;
(ix) an opinion of counsel for the Trustee and
the Trust Administrator in form and
substance acceptable to the Depositor, its
counsel, Xxxxx'x Investors Service, Inc. and
Standard & Poor's Ratings Group (it being
agreed that the opinion shall expressly
provide that the Unaffiliated Seller shall
be entitled to rely on the opinion); and
(x) an opinion or opinions of counsel for the
Certificate Insurer, in each case in form
and substance acceptable to the Depositor,
its counsel, Xxxxx'x Investors Service, Inc.
and Standard & Poor's Ratings Group (it
being agreed that the opinion shall
expressly provide that the Unaffiliated
Seller shall be entitled to rely on the
opinion).
(e) The Policy shall have been duly executed, delivered
and issued with respect to the Certificates.
(f) All proceedings in connection with the transactions
contemplated by this Agreement and all documents
incident hereto shall be satisfactory in form and
substance to the Depositor and its counsel.
(g) The Unaffiliated Seller shall have furnished the
Depositor with such other certificates of its
officers or others and such other documents or
opinions as the Depositor or its counsel may
reasonably request.
Section 5.02. Conditions of Unaffiliated Seller's Obligations. The
obligations of the Unaffiliated Seller under this Agreement shall be subject to
the satisfaction, on the Closing Date, of the following conditions:
(a) Each of the obligations of the Depositor required to
be performed by it at or prior to the Closing Date
pursuant to the terms of this Agreement shall have
been duly performed and complied with and all of the
representations and warranties of the Depositor
contained in this Agreement shall be true and correct
as of the Closing Date, and the Unaffiliated Seller
shall have received a certificate to that effect
signed by an authorized officer of the Depositor.
(b) The Unaffiliated Seller shall have received the
following additional documents:
(i) the Pooling and Servicing Agreement, and all
documents required thereunder, in each case
executed by the Depositor as applicable; and
26
(ii) a copy of a letter from Xxxxx'x Investors
Service, Inc. to the Depositor to the effect
that it has assigned a rating of "Aaa" to
the Class A Certificates and a copy of a
letter from Standard & Poor's Ratings Group
to the Depositor to the effect that it has
assigned a rating of "AAA" to the Class A
Certificates.
(c) The Depositor shall have furnished the Unaffiliated
Seller with such other certificates of its officers
or others and such other documents to evidence
fulfillment of the conditions set forth in this
Agreement as the Unaffiliated Seller may reasonably
request.
Section 5.03. Termination of Depositor's Obligations. The Depositor may
terminate its obligations hereunder by notice to the Unaffiliated Seller at any
time before delivery of and payment of the Purchase Price for the Mortgage Loans
if: (i) any of the conditions set forth in Section 5.01 are not satisfied when
and as provided therein; (ii) there shall have been the entry of a decree or
order by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Unaffiliated Seller or Emergent Group,
or for the winding up or liquidation of the affairs of the Unaffiliated Seller;
(iii) there shall have been the consent by the Unaffiliated Seller or Emergent
Group to the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Unaffiliated Seller or Emergent Group
or of or relating to substantially all of the property of the Unaffiliated
Seller or Emergent Group; (iv) any purchase and assumption agreement with
respect to the Unaffiliated Seller or Emergent Group or the assets and
properties of the Unaffiliated Seller or Emergent Group shall have been entered
into; or (v) a Termination Event shall have occurred. The termination of the
Depositor's obligations hereunder shall not terminate the Depositor's rights
hereunder or its right to exercise any remedy available to it at law or in
equity.
ARTICLE SIX
MISCELLANEOUS
Section 6.01. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Depositor, addressed to the Depositor at Prudential Securities Secured
Financing Corporation, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, if to the
Unaffiliated Seller, addressed to the Unaffiliated Seller at Emergent Mortgage
Holdings Corporation, 00 X. Xxxxxxxxxx Xxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Xxxxxxx X. Xxxxxxxx or to such other address as the Unaffiliated
Seller may designate in writing to the Depositor and if to Emergent Group,
addressed to Emergent Group, Inc., 00 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000, Attention: Xxxxx X. Xxxx.
27
Section 6.02. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement which is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
Section 6.03. Agreement of Unaffiliated Seller. The Unaffiliated Seller
agrees to execute and deliver such instruments and take such actions as the
Depositor may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement.
Section 6.04. Survival. The parties to this Agreement agree that the
representations, warranties and agreements made by each of them herein and in
any certificate or other instrument delivered pursuant hereto shall be deemed to
be relied upon by the other party hereto, notwithstanding any investigation
heretofore or hereafter made by such other party or on such other party's
behalf, and that the representations, warranties and agreements made by the
parties hereto in this Agreement or in any such certificate or other instrument
shall survive the delivery of and payment for the Mortgage Loans.
Section 6.05. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 6.06. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as expressly permitted by the terms
hereof, this Agreement may not be assigned, pledged or hypothecated by any party
hereto to a third party without the written consent of the other party to this
Agreement and the Certificate Insurer; provided, however, that the Depositor may
assign its rights hereunder without the consent of the Unaffiliated Seller and
Emergent Group.
Section 6.07. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York (without
regard to conflicts of laws principles), and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
Section 6.08. Confirmation of Intent. It is the express intent of the
parties hereto that the conveyance of the Mortgage Loans by the Unaffiliated
Seller to the Depositor as contemplated by this Unaffiliated Seller's Agreement
be, and be treated for all purposes as, a sale by the Unaffiliated Seller to the
Depositor of the Mortgage Loans. It is, further,
28
not the intention of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Unaffiliated Seller to the Depositor to secure a debt or
other obligation of the Unaffiliated Seller. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held to
continue to be property of the Unaffiliated Seller then (a) this Unaffiliated
Seller's Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the Uniform Commercial Code; (b) the transfer of
the Mortgage Loans provided for herein shall be deemed to be a grant by the
Unaffiliated Seller to the Depositor of a security interest in all of the
Unaffiliated Seller's right, title and interest in and to the Mortgage Loans and
all amounts payable on the Mortgage Loans in accordance with the terms thereof
and all proceeds of the conversion, voluntary or involuntary, of the foregoing
into cash, instruments, securities or other property; (c) the possession by the
Depositor of Mortgage Loans and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 of the Uniform Commercial Code; and (d)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Depositor for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Depositor pursuant to any provision hereof
shall also be deemed to be an assignment of any security interest created
hereby. The Unaffiliated Seller and the Depositor shall, to the extent
consistent with this Unaffiliated Seller's Agreement, take such actions as may
be necessary to ensure that, if this Unaffiliated Seller's Agreement were deemed
to create a security interest in the Mortgage Loans, such security interest
would be deemed to be a perfected security interest of first priority under
applicable law and would be maintained as such throughout the term of this
Agreement.
Section 6.09. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.
Section 6.10. Amendments. This Agreement supersedes all prior
agreements and understandings relating to the subject matter hereof.
(a) This Agreement may be amended by the Unaffiliated
Seller, the Depositor and Emergent Group, with the
prior written consent of the Certificate Insurer (so
long as a Certificate Insurer Default shall not have
occurred and be continuing) but without the consent
of the Trustee, the Trust Administrator or any of the
Certificateholders (unless a Certificate Insurer
Default shall have occurred, in which event the
consent of the Certificateholders with Voting Rights
equal to or in excess of 50% shall be obtained) (i)
to cure any ambiguity or (ii) to correct any
provisions in this Agreement; provided, however, that
such action shall not, as evidenced by an Opinion of
Counsel delivered to the Trustee and the Trust
Administrator, adversely affect in any material
respect the interests of any Certificateholder.
29
(b) This Agreement may also be amended from time to time
by the Unaffiliated Seller, the Depositor and
Emergent Group with the prior written consent of the
Certificate Insurer (so long as a Certificate Insurer
Default shall not have occurred and be continuing)
and with the consent of the Trustee and the Trust
Administrator and Certificateholders having Voting
Rights equal to or in excess of 50%, for the purpose
of adding any provisions to or changing in any manner
or eliminating any of the provisions of this
Agreement, or of modifying in any manner the rights
of the Certificateholders; provided, however, that no
such amendment shall (i) increase or reduce in any
manner the amount of, or accelerate or delay the
timing of, collections of payments on Mortgage Loans
or distributions that shall be required to be made on
any Certificate or the Pass-Through Rates or (ii)
reduce the aforesaid percentage required to consent
to any such amendment or any waiver hereunder,
without the consent of the Holders of all
Certificates then outstanding.
(c) Prior to the execution of any such amendment or
consent, Emergent Group shall have furnished written
notification of the substance of such amendment or
consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or
consent, the Trustee, or the Trust Administrator on
behalf of the Trustee, shall furnish written
notification of the substance of such amendment or
consent to each Certificateholder.
(e) It shall not be necessary for the consent of
Certificateholders pursuant to this Section to
approve the particular form of any proposed amendment
or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing
the authorization of the execution thereof by
Certificateholders shall be subject to such
reasonable requirements as the Trustee, or the Trust
Administrator on behalf of the Trustee, may
prescribe, including the establishment of record
dates. The consent of any Holder of a Certificate
given pursuant to this Section or pursuant to any
other provision of this Agreement shall be conclusive
and binding on such Holder and on all future Holders
of such Certificate and of any Certificate issued
upon the transfer thereof or in exchange thereof or
in lieu thereof whether or not notation of such
consent is made upon the Certificate.
Section 6.11. Miscellaneous.
(a) The parties agree that each of the Certificate
Insurer, the Trustee and the Trust Administrator is
an intended third-party beneficiary of this Agreement
to the extent necessary to enforce the rights and
30
to obtain the benefit of the remedies of the
Depositor under this Agreement which are assigned to
the Trustee, or the Trust Administrator on behalf of
the Trustee, for the benefit of the
Certificateholders pursuant to the Pooling and
Servicing Agreement and to the extent necessary to
obtain the benefit of the enforcement of the
obligations and covenants of the Unaffiliated Seller
under Section 3.05 and 4.06 of this Agreement. The
parties further agree that Prudential Securities
Incorporated and each of its directors and each
person or entity who controls Prudential Securities
Incorporated or any such person, within the meaning
of Section 15 of the Securities Act (each, an
"Underwriter Entity") is an intended third-party
beneficiary of this Agreement to the extent necessary
to obtain the benefit of the enforcement of the
obligations and covenants of the Unaffiliated Seller
with respect to each Underwriter Entity under Section
4.06 of this Agreement.
(b) The Depositor, Emergent Group and the Unaffiliated
Seller intend the conveyance by the Unaffiliated
Seller to the Depositor of all of its right, title
and interest in and to the Mortgage Loans pursuant to
this Agreement to constitute a purchase and sale and
not a loan.
[Signatures Commence on Following Page]
31
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed by their respective officers thereunto duly authorized as of the date
first above written.
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By:________________________________
Name:
Title:
EMERGENT MORTGAGE HOLDINGS
CORPORATION
By:________________________________
Name: Xxxxx Xxxxx
Title: Vice President
EMERGENT GROUP, INC.
By:________________________________
Name: Xxxxx Xxxxx
Title: Vice President
[Signature Page to the Unaffiliated Seller's Agreement]
00
XXXXX XX XXX XXXX )
) ss.
COUNTY OF NEW YORK )
On March 24, 1998 before me, the undersigned, a Notary Public in and
for said County and State, personally appeared __________, personally known to
me (or proved to me on the basis of satisfactory evidence) to be _________ of
Prudential Securities Secured Financing Corporation, a Delaware corporation, the
corporation that executed the within Unaffiliated Seller's Agreement on behalf
of said corporation, and acknowledged to me that said corporation executed it.
___________________________
Notary Public
My Commission expires:
00
XXXXX XX XXX XXXX )
) ss.
COUNTY OF NEW YORK )
On March 24, 1998 before me, the undersigned, a Notary Public in and
for said County and State, personally appeared Xxxxx Xxxxx, personally known to
me (or proved to me on the basis of satisfactory evidence) to be Xxxxx Xxxxx of
Emergent Group, Inc., the corporation that executed the within Unaffiliated
Seller's Agreement on behalf of said corporation, and acknowledged to me that
said corporation executed it.
___________________________
Notary Public
My Commission expires:
00
XXXXX XX XXX XXXX )
) ss.
COUNTY OF NEW YORK )
On March 24, 1998 before me, the undersigned, a Notary Public in and
for said County and State, personally appeared Xxxxx Xxxxx, personally known to
me (or proved to me on the basis of satisfactory evidence) to be Xxxxx Xxxxx of
Emergent Mortgage Holdings Corporation, the corporation that executed the within
Unaffiliated Seller's Agreement on behalf of said corporation, and acknowledged
to me that said corporation executed it.
___________________________
Notary Public
My Commission expires:
35
EXHIBIT A
SCHEDULE OF MORTGAGE LOANS
A-1
EXHIBIT B
OFFICER'S CERTIFICATE
I, Xxxxx Xxxxx, Vice President of EMERGENT MORTGAGE HOLDINGS
CORPORATION (the "Company") do hereby certify as follows:
(1) No financing statements or other filings have been filed naming the
Company as debtor or seller in any State of the United States of America to
perfect a sale, transfer or assignment of or lien, encumbrance, security
interest or other interest in, or which otherwise pertains to, the Mortgage
Loans other than those filed in connection with the Unaffiliated Seller's
Agreement and the Pooling and Servicing Agreement.
(2) The Company's chief executive office is located at 00 Xxxx
Xxxxxxxxxx Xxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Pooling and Servicing Agreement dated as
of March 1, 1998, among Prudential Securities Secured Financing Corporation, as
Depositor, Emergent Mortgage Corp., as Servicer, First Union National Bank, as
Trust Administrator, and Wilmington Trust Company, as Trustee.
IN WITNESS WHEREOF, I have set my hand this 24th day of March, 1998.
EMERGENT MORTGAGE HOLDINGS
CORPORATION
By:_____________________________
Name: Xxxxx Xxxxx
Title: Vice President
B-1
