EXECUTION COPY
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, 1997
TABLE OF CONTENTS
Page
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ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions................................................ 1
ARTICLE TWO
PURCHASE, SALE AND CONVEYANCE OF THE MORTGAGE LOANS
Section 2.01. Agreement to Purchase...................................... 4
Section 2.02. Purchase Price............................................. 5
Section 2.03. Delivery of Mortgage Loan Files............................ 5
Section 2.04. Transfer of Mortgage Loans;
Assignment of Agreement.................................. 5
Section 2.05. Examination of Mortgage Loan File.......................... 5
Section 2.06. Books and Records.......................................... 6
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties as
to the Unaffiliated Seller............................. 6
Section 3.02. Representations and Warranties
Relating to the Mortgage Loans......................... 8
Section 3.03. Covenants of the Unaffiliated
Seller................................................. 16
Section 3.04. Representations and Warranties of
the Depositor.......................................... 16
Section 3.05. Repurchase Obligation for Breach of
a Representation or Warranty........................... 17
Section 3.06. Reassignment of Purchased Mortgage
Loans.................................................. 18
Section 3.07. Waivers................................................... 19
Section 3.08. Representations and Warranties of
Emergent Group......................................... 19
ARTICLE FOUR
THE UNAFFILIATED SELLER
Section 4.01. Liability of the Unaffiliated
Seller.................................................. 20
Section 4.02. Merger or Consolidation.................................... 20
Section 4.03. Costs...................................................... 21
Section 4.04. Servicing.................................................. 22
Section 4.05. Mandatory Delivery......................................... 22
Section 4.06. Indemnification............................................ 22
ARTICLE FIVE
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Page
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CONDITIONS OF CLOSING
Section 5.01. Conditions of Depositor's
Obligations............................................. 26
Section 5.02. Conditions of Unaffiliated Seller's
Obligations............................................. 28
Section 5.03. Termination of Depositor's
Obligations............................................. 29
ARTICLE SIX
MISCELLANEOUS
Section 6.01. Notices.................................................... 29
Section 6.02. Severability of Provisions................................. 29
Section 6.03. Agreement of Unaffiliated Seller........................... 30
Section 6.04. Survival................................................... 30
Section 6.05. Effect of Headings and Table of
Contents................................................. 30
Section 6.06. Successors and Assigns..................................... 30
Section 6.07. Governing Law.............................................. 30
Section 6.08. Confirmation of Intent..................................... 31
Section 6.09. Execution in Counterparts.................................. 31
Section 6.10. Amendments................................................. 32
Section 6.11. Miscellaneous.............................................. 33
EXHIBITS
Exhibit A - Schedule of Mortgage Loans
Exhibit B - Officer's Certificate
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This Unaffiliated Seller's Agreement, dated as of March 1, 1997, 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, 1997 (the "Pooling
and Servicing Agreement"), to be entered into by and among the Depositor, as
depositor, Emergent Mortgage Corp., as servicer, and First Union National Bank
of North Carolina, 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.
"Closing Date" shall be March 26, 1997.
"Commission" means the Securities and Exchange Commission and its
successors.
"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.
"Original Pool Balance" means the aggregate unpaid principal balance of the
Mortgage Loans as of the Cut-Off Date. The Original Pool Balance is
$77,526,089.80.
"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 December 4, 1996 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.
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"Prospectus Supplement" means the Prospectus Supplement dated March 21,
1997, 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, 1997 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. 333-16511) relating to the offering by the
Depositor from time to time of its pass-through certificates (issuable in
series) as heretofore declared effective by the Commission.
"Related Documents" means the Insurance Agreement and the Indemnification
Agreement dated as of March 1, 1997 among the Originator, the Unaffiliated
Seller, Emergent Group, the Depositor, Prudential Securities Incorporated and
Financial Security Assurance Inc.
"Schedule of Mortgage Loans" means the schedule of all Mortgages and
Mortgage notes sold and transferred pursuant to this Agreement which is 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
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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.
"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. (a) 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. 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 from the Unaffiliated Seller to
the Depositor, conveying good title thereto free and clear of any Liens, and the
Mortgage Loans and the Other Conveyed Property shall not be part of the
Unaffiliated Seller's estate in the
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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 to the Depositor, the
Depositor will deliver to the Unaffiliated Seller (i) an amount in cash equal to
$74,879,657.42 (which amount includes accrued interest of $373,649.29), 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 (as assignee of the Depositor pursuant to the Pooling and Servicing
Agreement), the documents with respect to each Mortgage Loan listed in Section
2.01(a) of the Pooling and Servicing Agreement.
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 as may be required to effect the purposes of the Pooling and Servicing
Agreement, without further notice to, or consent of, the Unaffiliated Seller,
and the Trustee shall succeed to such of the rights and obligations of the
Depositor hereunder as shall be so assigned. The Depositor 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 for the benefit of the
Certificateholders. The Unaffiliated Seller agrees that, upon such assignment to
the Trustee, such representations, warranties, agreements and covenants will run
to and be for the benefit of the Trustee and the Trustee 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
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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 or the Trustee has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall not affect the
rights of the Depositor or the Trustee 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 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, 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
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the Depositor by all necessary corporate action; and 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.
(d) Valid Sale; Binding Obligations. This Agreement, when duly
executed and delivered, 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, when duly executed and delivered,
shall constitute legal, valid and binding obligations 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 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,
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(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.
(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, that as to each Mortgage Loan, immediately prior to the sale
and transfer of the Mortgage Loans 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 Cut-off Date;
(b) All of the original or certified documentation required to be
delivered to 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 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
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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 95%;
(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, 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
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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 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;
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(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, subject to the provisions of
Section 2.01 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;
(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 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
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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;
(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;
(ab) No improvement located on or being part of any Mortgaged Property
is in violation of any applicable zoning law or regulation. All
inspections, licenses and certificates required to be made or issued with
respect
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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;
(ac) 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;
(ad) 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;
(ae) 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;
(af) 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;
(ag) The credit underwriting guidelines applicable to each Mortgage
Loan conform in all material respects to the Originator's underwriting
guidelines;
(ah) 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;
(ai) The Unaffiliated Seller has no actual knowledge that there exist
on any Mortgaged Property any hazardous
13
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;
(aj) 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;
(ak) 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;
(al) 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 the Mortgage
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;
(am) 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;
(an) 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 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;
(ao) 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;
(ap) 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
14
to the Unaffiliated Seller with respect to such Mortgage Loan;
(aq) With respect to the Initial Mortgage Loans as of the Cut-off
Date: the aggregated Stated Principal Balance was $64,553,830.89; each of
the Stated Principal Balances was at least $4,405.31 but no more than
$376,250.00: the average Stated Principal Balance was $63,288.07; the
Mortgage Rates were at least 7.640% but no more than 15.990%; the weighted
average Mortgage Rate was 11.006%; the original Loan-to-Value Ratios were
at least 30% but no more than 95%; the weighted average original
Loan-to-Value Ratio was 80.618%; the remaining terms to stated maturity
were at least 58 months but no more than 360 months; the weighted average
remaining term to stated maturity was 208 months; the original terms to
stated maturity was at least 60 months but no more than 361 months; the
weighted average original term to stated maturity was 209 months; and no
more than 1.36% of the Mortgage Loans are secured by Mortgaged Properties
located in any one postal zip code area;
(ar) 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;
(as) The related Mortgaged Property has not been subject to any
foreclosure proceeding or litigation;
(at) 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; and
(au) 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.
(av) 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
15
all steps reasonably necessary to permit the accountants' letters required
hereunder to be delivered within the times set for delivery herein.
(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.
(d) The Unaffiliated Seller hereby agrees to arrange separately to pay to
the Trustee all of the Trustee's fees and expenses in connection with the
transactions contemplated by the Pooling and Servicing Agreement, including,
without limitation, all of the Trustee's fees and expenses in connection with
any actions taken by the Trustee 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 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 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
16
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 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;
(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 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 directly from the Trustee,
repurchase the related Mortgage Loan from the Trustee within 60 days following
discovery by or notice to the Unaffiliated Seller of such breach pursuant to
Section 2.03 of the Pooling and Servicing
17
Agreement, and, the Unaffiliated Seller shall pay the Purchase Price to 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 Loans and pay the Purchase Price to the
Trustee on such date. The provisions of this Section 3.05 are intended to grant
the Trustee a direct right against the Unaffiliated Seller 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 2.03
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
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
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 or the Trustee. 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
18
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 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 or the Trustee's name or the names of the Certificateholders.
Section 3.07. Waivers. No failure or delay on the part of the Depositor or
the Trustee 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;
(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
19
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 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
20
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 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 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 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 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 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, the fees and disbursements of the Trustee's counsel, if any and the
fees of the Trustee 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
21
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 2.01
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 2.03).
Section 4.06. Indemnification. (a)(i) Emergent Group agrees to indemnify
and hold harmless the 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
22
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 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 Certificate Insurer and any Certificateholder may
sustain in any way related to (i) the failure of the Unaffiliated Seller or
Emergent Group to perform its duties in compliance with the terms of this
Agreement or (ii) 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
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.
23
(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 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
24
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 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
25
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
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 21, 1997 between the Depositor and Prudential
Securities Incorporated 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
26
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 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 shall be entitled to rely on such opinions);
(vii) a letter from Xxxxx'x Investors Service, Inc. that it has
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 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);
(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); and
(e) The Policy shall have been duly executed, delivered and issued with
respect to the Certificates.
27
(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
(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
28
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.
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
29
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,
30
further, 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 super- sedes 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
31
as a Certificate Insurer Default shall not have occurred and be continuing) but
without the consent of the Trustee 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, adversely affect in any material
respect the interests of any Certificateholder.
(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 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 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 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
32
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 and the Trustee is an intended third-party beneficiary of
this Agreement to the extent necessary to enforce the rights and to obtain the
benefit of the remedies of the Depositor under this Agreement which are assigned
to 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]
33
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:/s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Vice President
EMERGENT MORTGAGE HOLDINGS
CORPORATION
By:/s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
EMERGENT GROUP, INC.
By:/s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President, CFO
and Treasurer
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On March 26, 1997 before me, the undersigned, a Notary Public in and for
said County and State, personally appeared Xxxx Xxxxx, personally known to me
(or proved to me on the basis of satisfactory evidence) to be Xxxx Xxxxx 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:
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
On March 26, 1997 before me, the undersigned, a Notary Public in and for
said County and State, personally appeared Xxxxx X. Xxxx, personally known to me
(or proved to me on the basis of satisfactory evidence) to be Xxxxx X. Xxxx 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:
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
On March 26, 1997 before me, the undersigned, a Notary Public in and for
said County and State, personally appeared Xxxxx X. Xxxx, personally known to me
(or proved to me on the basis of satisfactory evidence) to be Xxxxx X. Xxxx 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:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[See Schedule 1 to Exhibit 4.1]
EXHIBIT B
OFFICER'S CERTIFICATE
I, Xxxxx X. Xxxx, 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, 1997, among Prudential Securities Secured Financing Corporation, as
Depositor, Emergent Mortgage Corp., as Servicer, and First Union National Bank
of North Carolina, as Trustee.
IN WITNESS WHEREOF, I have set my hand this 26th day of March 1997.
EMERGENT MORTGAGE HOLDINGS
CORPORATION
By: /s/ Xxxxx X. Xxxx
---------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
B-1
