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 June 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......................... 15
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
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Section 4.05. Mandatory Delivery........................................... 22
Section 4.06. Indemnification.............................................. 22
ARTICLE FIVE
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....................... 28
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....................................... 30
Section 6.09. Execution in Counterparts.................................... 31
Section 6.10. Amendments................................................... 31
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 June 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 June 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, 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 June 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 $109,634,678.61.
"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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June 17, 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 June 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 June 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 $121,357,969.55 (which amount includes accrued interest of
$573,201.05), 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
$109,634,678.61; each of the Stated Principal Balances was at least
$10,000 but no more than $492,000; the average Stated Principal Balance
was $63,190.02; the Mortgage Rates were at least 7.750% but no more
than 15.990%; the weighted average Mortgage Rate was 10.800%; the
original Loan-to-Value Ratios were at least 13.9% but no more than
90.4%; the weighted average original Loan-to-Value Ratio was 75.941%;
the remaining terms to stated maturity were at least 47 months but no
more than 360 months; the weighted average remaining term to stated
maturity was 199 months; the original terms to stated maturity were at
least 49 months but no more than 361 months; the weighted average
original term to stated maturity was 200 months; and no more than 0.67%
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 and the Emergent
Group to demand performance hereunder, and in connection therewith, the
Unaffiliated Seller and Emergent Group waive any requirement of prior demand
against the Depositor with respect to such repurchase obligation. Any such
purchase resulting from the Unaffiliated Seller Repurchase Event shall take
place in the manner specified in Section 2.03 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 June 1, 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
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
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:_______________________________
Name: Xxxx Xxxxx
Title: Vice President
EMERGENT MORTGAGE HOLDINGS
CORPORATION
By:________________________________
Name: Xxxxx X. Xxxx
Title:Vice President
EMERGENT GROUP, INC.
By:_________________________________
Name: Xxxxx X. Xxxx
Title: Vice President, CFO
and Treasurer
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On June 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 June 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 June 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
SCHEDULE OF MORTGAGE LOANS
A-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 June 1, 1997, among Prudential Securities Secured Financing
Corporation, as Depositor, Emergent Mortgage Corp., as Servicer, and First Union
National Bank, as Trustee.
IN WITNESS WHEREOF, I have set my hand this 26th day of June,
1997.
EMERGENT MORTGAGE HOLDINGS
CORPORATION
By:_____________________________
Name: Xxxxx X. Xxxx
Title: Vice President
B-1
