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INDEMNIFICATION AGREEMENT
among
FINANCIAL SECURITY ASSURANCE INC.,
EMERGENT MORTGAGE HOLDINGS CORPORATION,
EMERGENT MORTGAGE CORP.,
EMERGENT GROUP, INC.,
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
and
PRUDENTIAL SECURITIES INCORPORATED
Dated as of Xxxxx 0, 0000
Xxxxxxxx Home Equity Loan Pass-Through
Certificates, Series 1997-1
$75,000,000 Class A Certificates
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TABLE OF CONTENTS
Page
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Section 1. Definitions..................................................... 1
Section 2. Representations, Warranties and Agreements of Financial Security 3
Section 3. Representations, Warranties and Agreements of the Underwriter... 5
Section 4. Indemnification................................................. 6
Section 5. Indemnification Procedures...................................... 6
Section 6. Contribution.................................................... 7
Section 7. Miscellaneous................................................... 8
EXHIBIT
Exhibit A Opinion of General Counsel
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT dated as of March 1, 1997, among FINANCIAL
SECURITY ASSURANCE INC. ("Financial Security"), PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION (the "Depositor"), EMERGENT GROUP, INC. (the "Company"),
EMERGENT MORTGAGE HOLDINGS CORPORATION (the "Seller"), EMERGENT MORTGAGE CORP.
(the "Originator") and PRUDENTIAL SECURITIES INCORPORATED (the "Underwriter"):
Section 1. Definitions. For purposes of this Agreement, the following terms
shall have the meanings provided below:
"Agreement" means this Indemnification Agreement, as amended from time to
time.
"Company Party" means any of the Company, its parent, subsidiaries and
affiliates and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Securities Act) of any of the
foregoing.
"Depositor Party" means any of the Depositor, its parent, subsidiaries and
affiliates and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Securities Act) of any of the
foregoing.
"Financial Security Agreements" means this Agreement and the Insurance
Agreement.
"Financial Security Information" has the meaning provided in Section 2(g)
hereof.
"Financial Security Party" means any of Financial Security, its parent,
subsidiaries and affiliates, and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
"Indemnified Party" means any party entitled to any indemnification
pursuant to Section 4 hereof.
"Indemnifying Party" means any party required to provide indemnification
pursuant to Section 4 hereof.
"Insurance Agreement" means the Insurance and Indemnity Agreement, dated as
of March 1, 1997, by and among Financial Security, the Depositor, the Company,
the Originator and the Seller.
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"Losses" means (a) any actual out-of-pocket damages incurred by the party
entitled to indemnification or contribution hereunder, (b) any actual
out-of-pocket costs or actual expenses reasonably incurred by such party,
including reasonable fees or expenses of its counsel and other expenses incurred
in connection with investigating or defending any claim, action or other
proceeding which entitle such party to be indemnified hereunder (subject to the
limitations set forth in Section 5 hereof), to the extent not paid, satisfied or
reimbursed from funds provided by any other Person other than an affiliate of
such party (provided that the foregoing shall not create or imply any obligation
to pursue recourse against any such other Person), plus (c) interest on the
amount paid by the party entitled to indemnification or contribution from the
date of such payment to the date of payment by the party who is obligated to
indemnify or contribute hereunder at the statutory rate applicable to judgments
for breach of contract.
"Offering Circular" means the Prospectus dated December 4, 1996, including
the Prospectus Supplement thereto dated March 21, 1997, relating to the
Securities, including, without limitation, Derived Information, as defined in
the Underwriting Agreement (which includes but is not limited to any
Computational Materials).
"Offering Document" means the Offering Circular and any amendments or
supplements thereto and any other material or documents delivered by the
Underwriter to any Person in connection with the offer or sale of the
Securities.
"Originator Party" means any of the Originator, its parent, subsidiaries
and affiliates and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Securities Act) of any of the
foregoing.
"Person" means any individual, partnership, joint venture, corporation,
trust, unincorporated organization or other organization or entity (whether
governmental or private).
"Policy" means the financial guaranty insurance policy delivered by
Financial Security with respect to the Securities.
"Securities" means the Class A-1 Certificates, Class A-2 Certificates and
the Class A-3 Certificates issued pursuant to a Pooling and Servicing Agreement,
dated as of March 1, 1997 by and among, the Depositor, the Originator and First
Union National Bank of North Carolina, as trustee.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Seller Party" means any of the Seller, its parent, subsidiaries and
affiliates, and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Securities Act) of any of the
foregoing.
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"Underwriting Agreement" means the Underwriting Agreement dated as of March
21, 1997, between the Depositor and the Underwriter in respect of the
Securities.
"Underwriter Information" has the meaning provided in Section 3(c) hereof.
"Underwriter Party" means any of the Underwriter, its parent, subsidiaries
and affiliates and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Securities Act) of any of the
foregoing.
Section 2. Representations, Warranties and Agreements of Financial
Security. Financial Security represents, warrants and agrees, as of the date
hereof and as of the Closing Date, as follows:
(a) Organization, Etc. Financial Security is a stock insurance company duly
organized, validly existing, in good standing and authorized to transact
financial guaranty insurance business under the laws of the State of New York.
(b) Authorization, Etc. The Policy and the Financial Security Agreements
have been duly authorized, executed and delivered by Financial Security.
(c) Validity, Etc. The Policy and the Financial Security Agreements
constitute legal, valid and binding obligations of Financial Security,
enforceable against Financial Security in accordance with their terms, subject,
as to the enforcement of remedies, to bankruptcy, insolvency, reorganization,
rehabilitation, moratorium and other similar laws affecting the enforceability
of creditors' rights generally applicable in the event of the bankruptcy or
insolvency of Financial Security and to the application of general principles of
equity and subject, in the case of this Agreement, to principles of public
policy limiting the right to enforce the indemnification provisions contained
herein.
(d) Exemption From Registration. The Policy is exempt from registration
under the Securities Act.
(e) No Conflicts. Neither the execution or delivery by Financial Security
of the Policy or the Financial Security Agreements, nor the performance by
Financial Security of its obligations thereunder, will conflict with any
provision of the certificate of incorporation or the bylaws of Financial
Security nor result in a breach of, or constitute a default under, any material
agreement or other instrument to which Financial Security is a party or by which
any of its property is bound nor violate any judgment, order or decree
applicable to Financial Security of any governmental or regulatory body,
administrative agency, court or arbitrator having jurisdiction over Financial
Security (except that, in the published opinion of the Securities and Exchange
Commission, the indemnification provisions of this Agreement, insofar as they
relate to indemnification for liabilities arising under the Securities Act, are
against public policy as expressed in the Securities Act and are therefore
unenforceable).
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(f) Financial Information. The consolidated balance sheets of Financial
Security as of December 31, 1995 and December 31, 1994 and the related
consolidated statements of income, changes in shareholder's equity and cash
flows for the fiscal years then ended and the interim consolidated balance sheet
of Financial Security as of September 30, 1996, and the related statements of
income, changes in shareholder's equity and cash flows for the interim period
then ended, furnished by Financial Security for use in the Offering Circular,
fairly present in all material respects the financial condition of Financial
Security as of such dates and for such periods in accordance with generally
accepted accounting principles consistently applied except as noted therein
(subject as to interim statements to normal year-end adjustments) and since the
date of the most current interim consolidated balance sheet referred to above
there has been no change in the financial condition of Financial Security which
would materially and adversely affect its ability to perform its obligations
under the Policy.
(g) Financial Security Information. The information in the Offering
Circular set forth under the caption "The Insurer" (as revised from time to time
in accordance with the provisions hereof, the "Financial Security Information")
is limited and does not purport to provide the scope of disclosure required to
be included in a prospectus with respect to a registrant in connection with the
offer and sale of securities of such registrant registered under the Securities
Act. Within such limited scope of disclosure, however, as of the date of the
Offering Circular and as of the date hereof, the Financial Security Information
does not contain any untrue statement of a material fact, or omit to state a
material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.
(h) Additional Information. Financial Security will furnish to the
Underwriter, the Company, the Originator or the Depositor, upon request of the
Underwriter, the Company, the Originator or the Depositor, as the case may be,
copies of Financial Security's most recent financial statements (annual or
interim, as the case may be) which fairly present in all material respects the
financial condition of Financial Security as of the dates and for the periods
indicated, in accordance with generally accepted accounting principles
consistently applied except as noted therein (subject, as to interim statements,
to normal year-end adjustments); provided, however, that, if the Underwriter,
the Company, the Seller, the Originator or the Depositor shall require a
manually signed report or consent of Financial Security's auditors in connection
with such financial statements, such report or consent shall be at the expense
of the Underwriter, the Company, the Originator, the Seller or the Depositor, as
the case may be. In addition, if the delivery of an Offering Circular relating
to the Securities is required at any time prior to the expiration of nine months
after the time of issue of the Offering Circular in connection with the offering
or sale of the Securities, the Depositor or the Underwriter will notify
Financial Security of such requirement to deliver an Offering Circular and
Financial Security will promptly provide the Underwriter and the Depositor with
any revisions to the Financial Security Information that are in the judgment of
Financial Security necessary to prepare an amended Offering Circular or a
supplement to the Offering Circular which will correct such statement or
omission.
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(i) Opinion of Counsel. Financial Security will furnish to the Seller, the
Originator, the Depositor, the Underwriter and the Company on the closing date
for the sale of the Securities an opinion of its Associate General Counsel, to
the effect set forth in Exhibit A attached hereto, dated such closing date and
addressed to the Seller, the Originator, the Depositor, the Underwriter and the
Company.
(j) Consents and Reports of Independent Accountants. Financial Security
will furnish to the Underwriter, the Company, the Originator and the Depositor,
upon request, as comfort from its independent accountants in respect of its
financial condition, (i) at the expense of the Person specified in the Insurance
Agreement, a copy of the Offering Circular, including either a manually signed
consent or a manually signed report of Financial Security's independent
accountants and (ii) the quarterly review letter by Financial Security's
independent accountants in respect of the most recent interim financial
statements of Financial Security.
Nothing in this Agreement shall be construed as a representation or
warranty by Financial Security concerning the rating of its claims-paying
ability by Standard & Poor's Ratings Services or Xxxxx'x Investors Service, Inc.
or any other rating agency (collectively, the "Rating Agencies"). The Rating
Agencies, in assigning such ratings, take into account facts and assumptions not
described in the Offering Circular and the facts and assumptions which are
considered by the Rating Agencies, and the ratings issued thereby, are subject
to change over time.
Section 3. Representations, Warranties and Agreements of the Underwriter.
The Underwriter represents, warrants and agrees, as of the date hereof and as of
the Closing Date, as follows:
(a) Compliance With Laws. The Underwriter will comply in all material
respects with all legal requirements in connection with offers and sales of the
Securities and make such offers and sales in the manner provided in the Offering
Circular.
(b) Offering Document. The Underwriter will not use, or distribute to other
broker-dealers for use, any Offering Document in connection with the offer and
sale of the Securities unless such Offering Document includes such information
as has been furnished by Financial Security for inclusion therein and the
information therein concerning Financial Security has been approved by Financial
Security in writing. Financial Security hereby consents to the information in
respect of Financial Security included in the Offering Circular. Each Offering
Document will include the following statement: "The Policy is not covered by the
property/casualty insurance security fund specified in Article 76 of the New
York Insurance Law".
(c) Underwriting Information. All material provided by the Underwriter for
inclusion in the Offering Documents, insofar as such information relates to the
Underwriter, and any Derived Information (as defined in the Underwriting
Agreement) (as revised from time to time, collectively the "Underwriter
Information") is true and correct in all material respects. In respect of the
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Offering Documents, the Underwriter Information is limited to the information
set forth under the caption "Plan of Distribution" in the Offering Documents.
Section 4. Indemnification. (a) Financial Security agrees, upon the terms
and subject to the conditions provided herein, to indemnify, defend and hold
harmless each Depositor Party, each Company Party, each Seller Party, each
Originator Party and each Underwriter Party against (i) any and all Losses
incurred by them with respect to the offer and sale of the Securities and
resulting from Financial Security's breach of any of its representations,
warranties or agreements set forth in Section 2 hereof and (ii) any and all
Losses to which any Depositor Party, Company Party, Seller Party, Originator
Party or Underwriter Party may become subject, under the Securities Act or
otherwise, insofar as such Losses arise out of or result from an untrue
statement of a material fact contained in any Offering Document or the omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or omission was made in the Financial
Security Information included therein in accordance with the provisions hereof.
(b) The Underwriter agrees, upon the terms and subject to the conditions
provided herein, to indemnify, defend and hold harmless each Financial Security
Party against (i) any and all Losses incurred by them with respect to the offer
and sale of the Securities and resulting from the Underwriter's breach of any of
its representations, warranties or agreements set forth in Section 3 hereof and
(ii) any and all Losses to which any Financial Security Party may become
subject, under the Securities Act or otherwise, insofar as such Losses arise out
of or result from an untrue statement of a material fact contained in any
Offering Document or the omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
omission was made in the Underwriter Information included therein.
(c) Upon the incurrence of any Losses for which a party is entitled to
indemnification hereunder, the Indemnifying Party shall reimburse the
Indemnified Party promptly upon establishment by the Indemnified Party to the
Indemnifying Party of the Losses incurred.
Section 5. Indemnification Procedures. Except as provided below in Section
6 with respect to contribution or in Section 7(e), the indemnification provided
herein by an Indemnifying Party shall be the exclusive remedy of any and all
Indemnified Parties for the breach of a representation, warranty or agreement
hereunder by an Indemnifying Party; provided, however, that each Indemnified
Party shall be entitled to pursue any other remedy at law or in equity for any
such breach so long as the damages sought to be recovered shall not exceed the
Losses incurred thereby resulting from such breach. In the event that any action
or regulatory proceeding shall be commenced or claim asserted which may entitle
an Indemnified Party to be indemnified under this Agreement, such party shall
give the Indemnifying Party written or telegraphic notice of such action or
claim reasonably promptly after receipt of written notice thereof. The
Indemnifying Party shall be entitled to participate in and, upon notice to the
Indemnified Party, assume the defense of any such action or claim in reasonable
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cooperation with, and with the reasonable cooperation of, the Indemnified Party.
The Indemnified Party will have the right to employ its own counsel in any such
action in addition to the counsel of the Indemnifying Party, but the fees and
expenses of such counsel will be at the expense of such Indemnified Party,
unless (a) the employment of counsel by the Indemnified Party at its expense has
been authorized in writing by the Indemnifying Party, (b) the Indemnifying Party
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, or (c)
the named parties to any such action or proceeding (including any impleaded
parties) include both the Indemnifying Party and one or more Indemnified
Parties, and the Indemnified Parties shall have been advised by counsel that
there may be one or more legal defenses available to them which are different
from or additional to those available to the Indemnifying Party (it being
understood, however, that the Indemnifying Party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for all
Depositor Parties, one such firm for all Underwriter Parties, one such firm for
all Company Parties, one such firm for all Seller Parties, one such firm for all
Originator Parties and one such firm for all Financial Security Parties, as the
case may be, which firm shall be designated in writing by the Depositor in
respect of the Depositor Parties, by the Underwriter in respect of the
Underwriter Parties, by the Company in respect of the Company Parties, by the
Seller in respect of the Seller Parties, by the Originator in respect of the
Originator Parties and by Financial Security in respect of the Financial
Security Parties), in each of which cases the fees and expenses of counsel will
be at the expense of the Indemnifying Party and all such fees and expenses will
be reimbursed promptly as they are incurred. The Indemnifying Party shall not be
liable for any settlement of any such claim or action unless the Indemnifying
Party shall have consented thereto or be in default in its obligations
hereunder. Any failure by an Indemnified Party to comply with the provisions of
this Section shall relieve the Indemnifying Party of liability only if such
failure is prejudicial to the position of the Indemnifying Party and then only
to the extent of such prejudice.
Section 6. Contribution. (a) To provide for just and equitable contribution
if the indemnification provided by any Indemnifying Party is determined to be
unavailable for any Indemnified Party (other than due to application of this
Section), each Indemnifying Party shall contribute to the Losses arising from
any breach of any of its representations, warranties or agreements contained in
this Agreement in such proportion as is appropriate to reflect (i) the benefits
received by such Indemnifying Party relative to the benefits received by the
Indemnified Party or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Indemnifying Party on the one hand and the Indemnified Party on the
other in connection with such Loss; provided, however, that an Indemnifying
Party shall in no event be required to contribute to all Indemnified Parties an
aggregate amount in excess of the Losses incurred by such Indemnified Parties
resulting from the breach of representations, warranties or agreements contained
in this Agreement.
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(b) The relative fault of each Indemnifying Party, on the one hand, and of
each Indemnified Party, on the other, shall be determined by reference to, among
other things, whether the breach of, or alleged breach of, any representations,
warranties or agreements contained in this Agreement relates to information
supplied by, or action within the control of, the Indemnifying Party or the
Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such breach.
(c) The parties agree that Financial Security shall be solely responsible
for the Financial Security Information, the Underwriter shall be solely
responsible for the Underwriter Information and that, as and to the extent
provided in the Insurance Agreement, the balance of the Offering Document shall
be the responsibility of the Company, the Originator, the Seller and the
Depositor.
(d) Notwithstanding anything in this Section 6 to the contrary, the
Underwriter shall not be required to contribute an amount greater than the
excess, if any, of (x) the purchase prices paid by investors to the Underwriter
for the Certificates over (y) the purchase price paid by the Underwriter for the
Certificates.
(e) 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.
(f) Upon the incurrence of any Losses entitled to contribution hereunder,
the contributor shall reimburse the party entitled to contribution promptly upon
establishment by the party entitled to contribution to the contributor of the
Losses incurred.
(g) The provisions relating to contribution set forth in this Section 6 do
not limit the rights of any party to indemnification under Section 4.
Section 7. Miscellaneous.
(a) Notices. All notices and other communications provided for under this
Agreement shall be delivered to the address set forth below or to such other
address as shall be designated by the recipient in a written notice to the other
party or parties hereto.
If to Financial Security:
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Surveillance Department
Re: Emergent Home Equity Loan
Pass-Through Certificates, Series 1997-1
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If to the Depositor: Prudential Securities Secured Financing Corporation
Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx
Attention: Managing Director, Asset-Backed Finance
Group
If to the Company: Emergent Group, Inc.
00 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
If to the Underwriter: Prudential Securities Incorporated
One Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Manager-Asset Finance Group
If to the Seller: Emergent Mortgage Holdings Corporation
00 Xxxx Xxxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Xx.
If to the Originator: Emergent Mortgage Corp.
00 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(c) Assignments. This Agreement may not be assigned by any party without
the express written consent of each other party. Any assignment made in
violation of this Agreement shall be null and void.
(d) Amendments. Amendments of this Agreement shall be in writing signed by
each party hereto.
(e) Survival, Etc. The indemnity and contribution agreements contained in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Indemnifying Party, (ii)
the issuance of the Securities or (iii) any termination of this Agreement or the
Policy. The indemnification provided in this Agreement will be in addition to
any liability which the parties may otherwise have and shall in no way limit any
obligations of the Company, the Depositor, the Seller, the Originator, Financial
Security or the Underwriter under the Underwriting Agreement or the Insurance
Agreement, as applicable.
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(f) Counterparts. This Agreement may be executed in counterparts by the
parties hereto, and all such counterparts shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
FINANCIAL SECURITY ASSURANCE INC.
By /s/ Xxxxxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Authorized Officer
EMERGENT MORTGAGE HOLDINGS
CORPORATION
By /s/ Xxxxx X. Xxxx
---------------------------------------
Name: Xxxxx X. Xxxx
Title: VP, CFO & Treasurer
EMERGENT GROUP, INC.
By /s/ Xxxxx X. Xxxx
---------------------------------------
Name:Xxxxx X. Xxxx
Title: VP, CFO & Treasurer
EMERGENT MORTGAGE CORP.
By /s/ Xxxxx X. Xxxx
---------------------------------------
Name: Xxxxx X. Xxxx
Title: VP & Treasurer
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: VP
PRUDENTIAL SECURITIES
INCORPORATED
By /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: VP
EXHIBIT A
OPINION OF GENERAL COUNSEL
Based upon the foregoing, I am of the opinion that:
1. Financial Security is a stock insurance company duly organized, validly
existing and authorized to transact financial guaranty insurance business under
the laws of the State of New York.
2. The Policy and the Agreements have been duly authorized, executed and
delivered by Financial Security.
3. The Policy and the Agreements constitute valid and binding obligations
of Financial Security, enforceable against Financial Security in accordance with
their terms, subject, as to the enforcement of remedies, to bankruptcy,
insolvency, reorganization, rehabilitation, moratorium and other similar laws
affecting the enforceability of creditors' rights generally applicable in the
event of the bankruptcy or insolvency of Financial Security and to the
application of general principles of equity and subject, in the case of the
Indemnification Agreement, to principles of public policy limiting the right to
enforce the indemnification provisions contained therein insofar as they relate
to indemnification for liabilities arising under applicable securities laws.
4. The Policy is exempt from registration under the Securities Act of 1933,
as amended (the "Act").
5. Neither the execution or delivery by Financial Security of the Policy or
the Agreements, nor the performance by Financial Security of its obligations
thereunder, will conflict with any provision of the certificate of incorporation
or the by-laws of Financial Security or, to the best of my knowledge, result in
a breach of, or constitute a default under, any agreement or other instrument to
which Financial Security is a party or by which it or any of its property is
bound or, to the best of my knowledge, violate any judgment, order or decree
applicable to Financial Security of any governmental or regulatory body,
administrative agency, court or arbitrator having jurisdiction over Financial
Security (except that in the published opinion of the Securities and Exchange
Commission the indemnification provisions of the Indemnification Agreement,
insofar as they relate to indemnification for liabilities arising under the Act,
are against public policy as expressed in the Act and are therefore
unenforceable).
In addition, please be advised that I have reviewed the description of
Financial Security under the caption "The Insurer" in the Prospectus Supplement
dated March __, 1997 (the "Offering Document") of the Depositor with respect to
the Securities. The information provided in the Offering Document with respect
to Financial Security is limited and does not purport to provide the scope of
disclosure required to be included in a prospectus with respect to a registrant
under the Act in connection with a public offering and sale of securities of
such registrant. Within such limited scope of disclosure, however, there has not
come to my attention any information which would cause me to believe that the
description of Financial Security referred to above, as of the date of the
Offering Document or as of the date of this opinion, contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (except that I express no opinion
with respect to any financial statements or other financial information
contained or referred to therein).
