CREDIT INCREASE CONFIRMATION AND
NOTE AMENDMENT
Dated July _, 1997
Reference is made to (x) the Interim Warehouse and Security Agreement,
dated as of March 4, 1997, as amended (the "Interim Warehouse Agreement"),
between Prudential Securities Credit Corporation (the "Lender"), Emergent
Mortgage Corp. (the "Borrower") and Emergent Group, Inc. (the "Guarantor"), (y)
the Secured Note, dated as of March 4, 1997, as amended (the "Note"), from the
Borrower to the Lender and (z) the Guarantee, dated as of March 4, 1997, as
amended (the "Guarantee"), by the Guarantor in favor of the Lender. Capitalized
terms used and not otherwise defined herein shall have their respective meanings
set forth in the Interim Warehouse Agreement.
Section 1.
(a) The maximum loan amount of "$125,000,000" referenced in the
recitals and in the first sentence of Section l(A)(1) of the Interim Warehouse
Agreement and referenced in the Note and Guarantee is hereby deleted and
replaced by "$175,000,000" .
(b) The second sentence in Section 1(A)(3) is hereby deleted in its
entirety and replaced with the following:
The interest rate shall be (except as otherwise provided in Section
1(F) or Section 11(D) hereof) LIBOR + 1.45%, and shall be reset on each business
day.
(c) The definition of "Maturity Date" in Section (1)(B)(2) and in the
Note and Guarantee is hereby deleted in its entirety and replaced with the
following:
Maturity Date means the earlier of (i) September 30, 1997, and (ii) the
date of the Securitization; provided, however, that (x) if the Securitization
occurs prior to September 30, 1997 and (y) the securitization includes a
pre-funding feature, then the Maturity Date shall be extended to the earlier to
occur of (A) November 30, 1997 and (B) the end of any pre-funding period with
respect to the Securitization. If the Securitization does contain a pre-funding
feature and the Maturity Date is so extended, the maximum loan amount following
the
Securitization will be, as of any day prior to the Maturity Date, the amount on
deposit in the pre-funding account.
(d) Section 4(C)(1) of the Interim Warehouse Agreement is hereby
deleted in its entirety and replaced with the following:
1. The Borrower's stated net worth minus intangible assets and the
amount of any receivable from any of its shareholders or Affiliates ("Tangible
Net Worth") shall not be less than $15,000,000.
(e) Section 4(C)(2) of the Interim Warehouse Agreement is hereby
deleted in its entirety and replaced with the following:
2. The Borrower's Tangible Net Worth plus subordinated debt maturing
180 days or more from the Maturity Date ("Subordinated Debt") shall not be less
than $55,000,000.
(f) The following paragraph is hereby added as a new Section 4(C)(b)
the Interim Warehouse Agreement:
6. The Borrower shall maintain Subordinated Debt with Carolina
Investors, Inc. ("Carolina") and/or the Guarantor in an amount not less than
$40,000,000.
(g) All references to Bankers Trust Company of California, N.A. in the
Interim Warehouse Agreement are hereby deleted and replaced with references to
First Union National Bank, and all references to the Custodial Agreement dated
as of March 4, 1997 among the Lender, the Borrower and Bankers Trust Company of
California, N.A. are hereby deleted and replaced with references to the
Custodial Agreement, dated as of July _, 1997 among the Lender, the Borrower and
First Union National Bank, as custodian.
(h) The following paragraph is hereby added as a new Section 4(E) to
the Interim Warehouse Agreement:
E. For the period of 180 days following the Maturity Date, Carolina
and/or the Guarantor, as the case may be, shall not call or make a demand on the
promissory note made by the Borrower in favor of Carolina and/or the Guarantor
representing the Subordinated Debt.
(i) The following paragraph is hereby added as a new Section lO(H) to
the Interim Warehouse Agreement:
H. A breach by ▇▇▇▇▇▇▇▇ of the covenant set forth in Section 4(E).
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Section 2.
As amended by Section 1, all provisions of the Interim Warehouse
Agreement, the Note and the Guarantee, as heretofore amended, are reconfirmed as
of the date hereof. Each of the Borrower and the Guarantor, in addition, hereby
reconfirms and remakes as of the date hereof each and every of its
representations, warranties and covenants set forth in the Interim Warehouse
Agreement, the Note and the Guarantee.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the day and year first above written.
EMERGENT MORTGAGE CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: VP & Treasurer
EMERGENT GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: VP & Treasurer
PRUDENTIAL SECURITIES CREDIT
CORPORATION
By:
Name:
Title:
CAROLINA INVESTORS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: VP & Treasurer
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APPROVAL AS TO LEGALITY
I, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, counsel to the Borrower and the Guarantor hereby
confirm that:
(j) I delivered, on March 4, 1997, the opinion letter, a copy of
which is attached hereto (the "Opinion Letter") relating to the
Interim Warehouse Agreement, the Note and the Guarantee.
(k) I have represented the Borrower and the Guarantor in connection
with its execution and delivery of the Credit Increase
Confirmation and Note Amendment (the "Confirmation") to which
this Approval as to Legality is attached.
(l) I hereby extend, as of the date hereof, the opinions set forth
in the Opinion Letter to cover both the Confirmation itself as
well as the transactions described on the Confirmation and
confirm, as of the date hereof, and subject to any and all
assumptions and qualifications set forth therein, the opinions
set forth in the Opinion Letter.
Yours truly,
_______________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Dated: July __, 1997
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CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT DATED AS OF JULY _, 1997 (as amended or otherwise
modified from time to time, this "Agreement"), among PRUDENTIAL SECURITIES
CREDIT CORPORATION, a Delaware corporation having an office at ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Lender"), FIRST UNION NATIONAL BANK, a
national banking association having an address at ▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Custodian") and EMERGENT MORTGAGE CORP., a South
Carolina corporation having an address at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower").
A. The Borrower is the owner of certain Mortgage Loans; and
B. The Lender has agreed to provide interim financing for the Mortgage
Loans pursuant to the Interim Warehouse and Security Agreement; and
C. The Borrower shall grant to the Lender a first priority security
interest in the Mortgage Loans and in the documents listed in Section 2 for the
purposes of securing the due and punctual payment of all amounts due from the
Borrower to the Lender according to the terms and provisions of the Interim
Warehouse and Security Agreement and the Secured Note given pursuant thereto;
and
D. The Custodian is a financial institution regulated by the Office of
the Comptroller of the Currency; and
E. The Borrower intends to deliver to the Custodian the Mortgage Notes
for the Mortgage Loans, along with certain other documents specified in this
Agreement (collectively, the "Collateral"), and the Lender desires that the
Custodian take possession of the Collateral as the custodian for, and bailee of,
the Lender in accordance with the terms and conditions of this Agreement in
order to perfect the Lender's security interest in the Collateral; and
F. The Lender may from time to time pledge the Mortgage Loans and the
related Custodian's Mortgage Files in accordance with the terms and conditions
of this Agreement as collateral for such Pledged Mortgage Loans and desires to
have
the Custodian act as bailee of, and agent for, the pledgee of such Mortgage
Loans and the related Custodian's Mortgage Files in accordance with the terms
and conditions of this agreement.
The parties, intending to be legally bound, hereby agree as follows:
1. Definitions. In addition to the terms defined elsewhere in this
Agreement or in the Interim Warehouse and Security Agreement, the following
terms shall have the following meanings when used in this Agreement:
"Assignment of Mortgage" shall have the meaning set forth in Section
2(c) hereof.
"Authorized Representative" shall have the meaning set forth in Section
19 hereof.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in New York City or Maryland are authorized or
obligated by law or executive order to be closed.
"Certification" shall have the meaning set forth in Section 3.
"Collateral" shall have the meaning set forth in the Recitals.
"Custodian's Mortgage Files" means, with respect to a Mortgage Loan,
those documents listed in Section 2 of this Agreement that are delivered to the
Custodian and all documents subsequently delivered to the Custodian pursuant to
the last sentence of Section 2.
"Cut-Off Date" means, as of any date, the close of business on the date
set forth in the related Mortgage Loan Schedule. In no event shall the Cut-Off
Date precede by more than two weeks the date on which the related Mortgage Loan
Schedule is delivered.
"Deficiency" means a failure of a document to correspond to the
information on the Mortgage Loan Schedule or the absence of a required document
from a Custodian's Mortgage File pursuant to Section 2.
"Final Certification" shall have the meaning set forth in Section 3.
"Initial Certification" shall have the meaning set forth in Section 3.
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"Interim Warehouse and Security Agreement" means, with respect to any
Mortgage Loans, the interim warehouse and security agreement (as the same may be
amended or supplemented from time to time) between the Lender, the Guarantor and
the Borrower pursuant to which the Lender agrees to provide interim funding to
the Borrower to purchase such Mortgage Loans. The Lender agrees to furnish to
the Custodian a copy of any agreement which is intended to serve as an "Interim
Warehouse and Security Agreement" for purposes of this Agreement, including any
supplements or amendments thereto.
"Maturity Date" means the date specified as the maturity date in the
Interim Warehouse and Security Agreement. The Maturity Date may be extended by
the Lender, in the Lender's sole and unreviewable discretion, on any date by the
execution and delivery of a Credit Increase Confirmation in accordance with the
Interim Warehouse and Security Agreement.
"Mortgage" means the mortgage, deed of trust, or other instrument
creating a first (or second, if applicable) lien on the Mortgage Property.
"Mortgage Loan" means fixed-rate, closed-end, first (or second, if
applicable) mortgage loans delivered to the Custodian hereunder and pledged to
the Lender pursuant to the Interim Warehouse and Security Agreement.
"Mortgage Loan Schedule" means the schedule of Mortgage Loans to be
delivered to the Custodian on the date of delivery to the Custodian of the
Custodian's Mortgage Files, in both (a) hard copy (only if requested by the
Custodian or the Lender) and (b) floppy disk or via modem, to be annexed hereto
as Exhibit 10, such schedule setting forth the following information with
respect to each Mortgage Loan:
(i) the loan number and name of the Mortgagor;
(ii) the address and zip code of the Mortgaged Property;
(iii) the date of origination (date indicated on Mortgage Note);
(iv) the original stated maturity date;
(v) the principal balance at origination;
(vi) the first payment date;
(vii) the type of Mortgage Property;
(viii) the monthly payment in effect as of the Cutoff Date;
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(ix) the principal balance as of the cut-off date as used in
determining the cut-off date principal balance;
(x) the loan-to-value ratio at origination;
(xi) the interest rate at origination;
(xii) the occupancy status;
(xiii) the appraised value of the Mortgage Property at origination;
(xiv) if such Mortgage Loan is a "balloon loan," the amortization
terms;
(xv) the lien priority; and
(xvi) the credit rating given such mortgage loan by the Borrower.
"Mortgage Note" means the note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Property" means the underlying property securing a Mortgage
Loan, consisting of a fee simple estate in a single contiguous parcel of land
improved by a residential dwelling.
"Mortgagor" means the obligor on a Mortgage Note.
"Notice of Default" means a notice of default delivered by a Pledgee to
the Borrower and the Custodian stating that a default by the Lender has occurred
under a Security Agreement.
"Notice of Pledge" means a notice of pledge of Mortgage Loans and
related Custodian's Mortgage Files held by the Custodian delivered to the
Custodian and the Borrower, substantially in the form of Exhibit 5 to this
Agreement.
"Person" means any individual, corporation, limited liability company,
estate, partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"Pledged Mortgage Loans" means those and the related Custodian's
Mortgage Files that are the subject of a Notice of Pledge delivered to the
Custodian and not released pursuant to a Release of Pledge.
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"Pledgee" means a Person to which Mortgage Loans and related
Custodian's Mortgage Files have been pledged, sold pursuant to a repurchase
facility, participated or otherwise hypothecated pursuant to a Security
Agreement.
"Release of Pledge" means a release of the security interest in, and
lien upon, or a repurchase or other hypothecation back to the Lender of Pledged
Mortgage Loans, substantially in the form of Exhibit 6 to this Agreement.
"Request for Release and Receipt of Document" shall have the meaning
set forth in Section 7.
"Secured Note" means the secured note executed by the Borrower in favor
of the Lender in connection with the Interim Warehouse and Security Agreement.
"Security agreement" means an agreement (which may be a separate
agreement or included in a credit, loan or other agreement) between the Lender
and a Pledgee pursuant to which the Lender grants to such Pledgee a security
interest in, and lien upon, or agrees to purchase and repurchase, or purchase a
participation in, or otherwise hypothecate, the Mortgage Loans and related
Custodian's Mortgage Files held by the Custodian, or a repurchase or other
hypothecation back to the Lender.
2. Delivery of Custodian's Mortqaqe Files. The Borrower hereby
certifies that it shall deliver and release to the Custodian as custodian for,
and bailee of, the Lender the following documents pertaining to each of the
Mortgage Loans identified in a Mortgage Loan Schedule, a copy of which Mortgage
Loan Schedule shall be provided to the Custodian on computer readable disk or
electronically via modem by the Borrower:
(a) The original Mortgage Note, endorsed, "Pay to the order of ,
without recourse" and signed in the name of the Borrower by an authorized
officer. In the event that the Mortgage Loan was acquired by the Borrower in a
merger, the endorsement must be by "(the Borrower), successor by merger to (name
of predecessor)"; and in the event that the Mortgage Loan was acquired or
originated by the Borrower while doing business under another name, the
endorsement must be by "(the Borrower), formerly known as (previous name)"
together with all intervening endorsements showing a complete chain of
endorsement from the originator to the Borrower;
(b) The original Mortgage, with evidence of recording thereon (if the
original Mortgage has not been returned from the recording office, a certified
copy thereof, the original to be delivered to the Custodian forthwith after
5
return) and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording ▇▇▇▇▇▇▇;
(c) The original assignment of Mortgage (hereinafter the "Assignment of
Mortgage"), in blank, which assignment shall be in form and substance acceptable
for recording in the state or other jurisdiction where the Mortgage Property is
located. In the event that the mortgage Loan was acquired by the Borrower in a
merger, the Assignment of Mortgage must be by "(the Borrower), successor by
merger to (name of predecessor)"; and in the event that the Mortgage Loan was
acquired or originated by the Borrower while doing business under another name,
the assignment of mortgage must be by "(the Borrower), formerly known as
(previous name)". Subject to the forgoing, and where permitted under the
applicable laws of the jurisdiction where the Mortgaged Property is located;
(d) The original recorded intervening assignment or assignments of the
Mortgage, if any, showing a complete chain of assignment from the originator to
the Borrower or if the original recorded assignment has not been returned from
the applicable recording office, a copy certified by the Borrower;
(e) The original policy of title insurance, or with respect to any
Mortgage Loan if such policy has not yet been delivered by the insurer, the
title commitment or title binder to issue same (which may be a copy); and
(f) Originals of all assumption, consolidation, extension, modification
or waiver agreement(s), if any, with evidence of recording thereon (or, if any
original has not been returned from the recording office, a copy thereof, the
original to be delivered to the Custodian forthwith after return unless such
original is retained by such recording office).
The Custodian shall be entitled to rely upon each Mortgage Loan
Schedule provided by the Borrower as the conclusive schedule in its review,
pursuant to Sections 3 and 17(b) hereof, of the Custodian's Mortgage Files
delivered to it by the Borrower. From time to time, the Borrower shall forward
to the Custodian for inclusion in the appropriate Custodian's Mortgage File any
additional original loan documents evidencing any assumption, consolidation,
extension, modification or waiver of a Mortgage Loan approved by the Borrower
and any original documents returned from the applicable recording or filing
offices.
3. Certification. Within three (3) Business Days after the delivery to
the Custodian of the Custodian's Mortgage Files, the Custodian shall ascertain
that all
6
documents referred to in Section 2 of this Agreement are in its possession, and
shall deliver to the Lender (and a copy to the Borrower) a Certification, in
substantially the form of Exhibit 1, to the effect that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full and except as described on the attached exception report): (i) all
documents required to be delivered to it pursuant to Section 2 of this
Agreement are in its possession; (ii) such documents have been reviewed by it
and have not been mutilated, damaged, torn or otherwise physically altered and
relate to such Mortgage Loan identified in the Mortgage Loan Schedule; (iii)
based on its examination and only as to the foregoing documents, the
information set forth in items (i), (ii), (iii), (iv), (v) and (xi) of the
definition of Mortgage Loan Schedule respecting such Mortgage Loan accurately
reflects the information on the Mortgage Loan Schedule; and (iv) each Mortgage
Note has been endorsed as provided in Section 2 of this Agreement (the
"Certification").
4. Deficiencies in custodian's mortgage files. (a) If the Certification
discloses that any of the documents enumerated in Section 2 (other than the
agreements called for under Section 2(f)) are missing or discloses any
Deficiencies in the documents included in any Custodian's Mortgage Files
delivered to the Custodian, then the Lender shall promptly notify the Custodian,
in the form of Exhibit 8, that (1) the Borrower shall deliver the missing
documents noted in the Certification to the Custodian within five (5) Business
Days, (2) the Lender has waived the Deficiencies noted in the Certification, (3)
the Borrower shall cure the Deficiencies within five (5) Business Days, or (4)
the Borrower shall substitute another Mortgage Loan for the deficient Mortgage
Loan and shall deliver to the Custodian the Custodian's Mortgage File with
respect to the substituted Mortgage Loan.
(b) If the Lender's notice pursuant to Section 4(a) above states that
the Borrower shall take either of the actions specified in clauses (1) or (3) of
subsection (a) above and the Borrower fails to take such actions within five (5)
Business Days after the Custodian's receipt of such notice, then the Custodian
shall notify the Lender and the Borrower of such failure and release or retain
the deficient Custodian's Mortgage File in accordance with the written
instructions of the Lender in the form of Exhibit 8.
(c) If the Lender's notice pursuant to Section 4(a) above states that
the Borrower shall take the actions specified in clause (4) of subsection (a)
above, then the Custodian shall return the deficient Custodian's Mortgage File
to the Borrower in exchange for delivery to it of the Custodian's Mortgage File
to be substituted therefor. If the Borrower fails to deliver the substituted
Custodian's Mortgage File to the Custodian within five (5) Business Days after
the
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Custodian's receipt of such notice, then the Custodian shall notify the
Borrower of such failure and release or return the Custodian's Mortgage File in
accordance with the written instructions of the Lender in the form of Exhibit
8.
(d) Within five (5) Business days after receipt by the Custodian of any
additional documents pursuant to Section 4(a), the Custodian shall review such
documents and deliver to the Lender and the Borrower an exception report
listing any Deficiencies with respect to such documents. If the notification
shall indicate any remaining Deficiencies with respect to such additional
documents, the provisions of this Section 4 shall again be followed.
(e) Within two (2) Business Days of the last Business Day of each
calendar month, the Custodian shall deliver to the Lender and the Borrower a
revised exception report with respect to all of the Custodian's mortgage files.
If the revised exception report shall indicate any remaining Deficiencies in any
of the Custodian's Mortgage Files, the provisions of this Section 4 shall again
be followed.
5. Pledqe or Other Hypothecation of Mortgage Loans. (a) The Custodian
hereby agrees to recognize and record on the Mortgage Loan Schedule a pledge or
other hypothecation of Mortgage Loans and the related Custodian's Mortgage Files
to a Pledgee in accordance with the provisions of a Notice of Pledge delivered
to the Custodian by the Lender. Upon its receipt of a Notice of Pledge, the
Custodian shall reflect on the Mortgage Loan Schedule that the Pledgee
identified in the Notice of Pledge has an interest in the Pledged Mortgage Loans
that are subject to the Notice of Pledge.
(b) Upon receipt by the Custodian of a Release of Pledge from a
Pledgee, the Custodian shall reflect on the Mortgage Loan Schedule that the
Mortgage Loans that are the subject of the Release of Pledge are no longer
subject to lien or interest.
(c) In no event shall the term of any such pledge or other
hypothecation extend beyond the Maturity Date.
6. Obliqations of the Custodian. (a) The Custodian shall segregate and
maintain continuous custody of all items constituting the Custodian's Mortgage
Files in secure, fireproof facilities in accordance with customary standards for
such custody. In any event, the Mortgage Note and Assignment of Mortgage shall
be maintained in fireproof facilities. The Custodian shall reflect on its master
data processing records that each Custodian's Mortgage File is being held by the
Custodian exclusively as custodian for, and bailee of, the Lender. The Custodian
makes no representations
8
as to and shall not be responsible to verify (i) the validity, legality,
enforceability, sufficiency, due authorization or genuineness of any document in
each Custodian's Mortgage File or of any of the Mortgage Loans or (ii) the
collectability, insurability, effectiveness or suitability of any mortgage Loan.
(b) With respect to the documents constituting each Custodian's
Mortgage File that are delivered to the Custodian, the Custodian shall (i) act
exclusively as the custodian for, and the bailee of, the Lender, (ii) hold all
documents constituting such Custodian's Mortgage File received by it for the
exclusive use and benefit of the Lender, and (iii) make disposition thereof only
in accordance with the terms of this Agreement or with written instructions
furnished by the Lender.
Notwithstanding the foregoing, upon delivery to the Custodian of a
Notice of pledge, the custodian shall thereafter hold the Custodian's Mortgage
Files that are the subject of such Notice of Pledge as bailee of, and agent for,
the Pledgee identified in such Notice until (a) the Custodian receives from the
Pledgee a Release of Pledge with respect to such Custodian's Mortgage Files or
(b) the related Custodian's Mortgage Files are released or transferred pursuant
to the provisions of this Agreement. Upon delivery to the Custodian of a Notice
of Pledge and until receipt of a Release of Pledge by the Custodian, the
Lender's interest in the Pledged Mortgage Loans shall be subject and subordinate
to the interest and rights of the Pledgee of such Pledged Mortgage Loans, and
the Custodian shall make disposition of the related Custodian's Mortgage Files
only in accordance with the terms of this Agreement or with written instructions
furnished by the Pledgee.
(c) The Lender, upon the release of the Mortgage Loans from the lien of
the Interim Warehouse and Security Agreement, shall notify the Custodian in
writing in the form of Exhibit 9 with respect to such release, and the Custodian
shall then deliver the Custodian's Mortgage Files relating to the Mortgage Loans
to the Borrower or the Borrower's designee. No such notice shall be effective as
to Pledged Mortgage Loans if a Notice of Pledge shall be in effect unless the
Pledgee of such Pledged Mortgage Loans shall also have signed such notice
delivered to the Custodian, which signature of the Pledgee shall not be
unreasonably withheld.
(d) In the event that (i) the Lender, the borrower, a Pledgee or the
Custodian shall be served by a third party with any type of levy, attachment,
writ or court order with respect to any Custodian's Mortgage File or a document
included within a Custodian's Mortgage File or (ii) a third party shall
institute any court proceeding by which any
9
Custodian's Mortgage File or a document included within a Custodian's Mortgage
File shall be required to be delivered otherwise than in accordance with the
provisions of this Agreement, the party or parties receiving such service shall
promptly deliver or cause to be delivered to the other parties to this Agreement
and any Pledgees that have an interest in the related Mortgage Loans copies of
all court papers, orders, documents and other materials concerning such
proceedings. The Custodian shall continue to hold and maintain all the
Custodian's Mortgage Files that are the subject of such proceedings pending a
final order of a court of competent jurisdiction permitting or directing
disposition thereof. Upon final determination of such court, the Custodian shall
dispose of such Custodian's Mortgage File or a Document included within such
Custodian's Mortgage File as directed by such determination or, if no such
determination is made, in accordance with the provisions of this Agreement.
Expenses of the Custodian incurred as a result of such proceedings shall be
borne by the Borrower.
The parties hereby acknowledge that, from time to time, the Custodian
and/or its affiliates has entered into or may enter into financing arrangements
with the Borrower and/or its affiliates, and in accordance with such financing
arrangements may act as custodian and/or bailee of the collateral related
thereto. Notwithstanding any such financing arrangement, by execution of this
Agreement, (i) the Custodian hereby agrees to act exclusively as the custodian
for, and the bailee of, the Lender with respect to the Custodian's Mortgage
Files, (ii) the Custodian hereby waives and releases any lien, charge, security
interest, ownership interest or encumbrance on or with respect to a Mortgage
Loan in favor of the Custodian or any of its affiliates, and (iii) the Custodian
hereby waives any right to set-off by the Custodian or any of its affiliates or
any other third party claiming through the Custodian with respect to the
Mortgage Loans or the related Custodian's Mortgage File. In furtherance of the
foregoing, the Custodian shall not pledge, encumber, hypothecate, transfer,
dispose of, or otherwise grant to itself, any of its affiliates or any third
party any interest in the Mortgage Loans or the related Custodian's Mortgage
File.
7. Release of Custodian's Mortgage File. From time to time and as
appropriate for the foreclosure or servicing of any of the Mortgage Loans, the
Custodian is hereby authorized, upon receipt of a written request and receipt of
the Borrower acknowledged by the Lender and, if a pledge is then in effect, the
Pledgee (which request shall not be unreasonably withheld by the Pledgee), in
substantially the form annexed as Exhibit 3 (a "Request for Release and Receipt
10
of Documents"), to release to the Borrower by the close of business two Business
Days following such request, the related Custodian's Mortgage File or the
documents from a Custodian's Mortgage File set forth in such request and
receipt. All documents so released to the Borrower shall be held by the Borrower
in trust for the benefit of the Lender (and, if a Notice of Pledge is then in
effect with respect to such Custodian's Mortgage File, such Pledgee, as its
interest may appear) in accordance with the Interim Warehouse and Security
Agreement. The Borrower shall return to the Custodian each and every document
previously requested from the Custodian's Mortgage File when the Borrower's need
therefore in connection with such foreclosure or servicing no longer exists,
unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a
certification to this effect from the Borrower to the Custodian in substantially
the form annexed as Exhibit 3, the Borrower's prior receipt shall be returned by
the Custodian to the Borrower. The Lender agrees to acknowledge, within one
Business Day of receipt, any Request for Release and Receipt of Documents
properly completed and submitted by the Borrower, and not unreasonably to
withhold any such acknowledgement.
8. Release Upon Redelivery or Payment. Upon the redelivery of any
Mortgage Loan pursuant to the Interim Warehouse and Security Agreement or the
payment in full of any Mortgage Loan, which shall be evidenced by the delivery
to the Custodian of a Request for Release and Receipt of Documents executed by
the Borrower and acknowledged by the Lender and, if a pledge is then in effect,
the Pledgee (which acknowledgement shall not be unreasonably withheld by the
Pledgee), the Custodian shall promptly release the Custodian's Mortgage File to
the Borrower.
9. Fees and Expenses of the Custodian. It is understood that the
Custodian will charge the Borrower such fees for its services, and shall be
entitled to reimbursement from the Borrower for expenses, under this Agreement
as are set forth on the separate fee letter submitted to the Borrower by the
Custodian.
10. Examination of Custodian's Mortgage Files. Upon reasonable prior
written notice to the Custodian (but no less than one Business Day), (a) the
Lender and its authorized representatives and (b) if a Notice of Pledge is then
in effect, the Pledgee and its authorized representatives, will be permitted
during normal business hours to examine the Custodian's Mortgage Files,
documents, records and other papers in the possession, or under the control, of
the Custodian relating to any or all of the Mortgage Loans (except that, in the
case of an examination by a Pledgee, access shall be limited to those
Custodian's Mortgage Files that are pledged to such Pledgee).
11
11. Transfer of Custodian's Mortqaqe Files Upon Termination. If (a) the
Custodian is furnished with written notice and satisfactory evidence from the
Lender that the Interim Warehouse and Security Agreement has been terminated as
to any or all of the Mortgage Loans, and (b) there shall not then be in effect a
Notice of Pledge delivered to the Custodian with respect to such Mortgage Loans,
the Custodian shall, upon written request of the Lender release to such Persons
as the Lender shall designate such Custodian's Mortgage Files relating to such
Mortgage Loans as the Lender shall request and the Custodian shall endorse the
Mortgage Notes only as, and if, the Lender shall request in writing. If,
however, a notice of pledge is then in effect with respect to any Pledged
Mortgage Loans, the rights of the Lender under this Section 11 shall be
exercisable only by the pledgee with respect to such Pledged Mortgage Loans,
which release shall not be unreasonably withheld by the pledgee.
12. Insurance of the Custodian. The Custodian shall, at its own
expense, maintain at all times during the term of this Agreement and keep in
full force and effect (a) fidelity insurance, (b) theft of documents insurance,
and (c) forgery insurance. All such insurance shall be in amounts, with standard
coverage and subject to deductibles, as are customary for similar insurance
typically maintained by banks that act as custodian in similar transactions.
13. Periodic Statements. Within 30 days after the written request of
the Lender or a Pledgee, if there shall then be in effect a Notice of Pledge,
the Custodian shall provide to the Lender and such Pledgee a list of all the
Mortgage Loans for which the Custodian holds a Custodian's Mortgage File
pursuant to this Agreement (except that, in the case of a Pledgee, the list
shall be limited to the Pledged Mortgage Loans pledged to such Pledgee). Such
list may be in the form of a copy of the Mortgage Loan Schedule with manual
deletions to specifically denote any Mortgage Loans paid off, liquidated,
released or redelivered since the date of this Agreement.
14. Copies of Mortgage Documents. Within ten Business Days after the
written request and at the expense of the Lender, or a Pledgee, with respect to
Pledged Mortgage Loans, the Custodian shall provide the Lender or the Pledgee,
as the case may be, with copies of the documents in the Custodian's Mortgage
Files (except that, in the case of a Pledgee, the documents shall be limited to
those related to the Pledged Mortgage Loans pledged to such Pledgee).
15. Resignation by and Removal of the Custodian: Successor Custodian.
(a) The Custodian may at any time resign and terminate its obligations under
this Agreement upon
12
at least 30 days prior written notice to the Borrower, the Lender and each
Pledgee, if any. Promptly after receipt of notice of the Custodian's
resignation, the Borrower shall appoint, by written instrument, a Successor
Custodian, subject to prior written approval by the Lender. If the Borrower
fails to appoint a successor within 30 days, the Lender shall appoint a
successor custodian. If both the Borrower and the Lender fail to appoint a
successor custodian pursuant to the terms hereof, the Custodian may petition a
court of competent jurisdiction to appoint a successor custodian. One original
counterpart of such instrument of appointment shall be delivered to the
Borrower, the Custodian and the successor custodian. The Lender shall give
written notice of such appointment to each Pledgee.
(b) The Lender, with or without cause, upon at least 30 days' written
notice to the Custodian, may remove and discharge the Custodian (or any
successor custodian thereafter appointed) from the performance of its
obligations under this Agreement. A copy of such notice shall be delivered to
each of the Borrower and each Pledgee, if any. Promptly after the giving of
notice of removal of the Custodian, the Lender shall appoint, by written
instrument, a successor custodian. One original counterpart of such instrument
of appointment shall be delivered to each of the Borrower, and to each of the
Custodian and the successor custodian. The Lender shall give written notice of
such appointment to each Pledgee.
(c) No resignation or removal of the Custodian and no appointment of a
successor custodian under this Section 15 shall become effective until the
acceptance of a successor custodian hereunder.
(d) In the event of any such resignation or removal, the Custodian
shall promptly transfer to the successor custodian, as directed in writing by
the Lender, all of the Custodian's Mortgage Files being administered pursuant to
this Agreement and, to the extent (if any) and in the manner directed by the
Lender, the Custodian shall complete the endorsements on the Mortgage Notes at
the expense of the Borrower.
16. Indemnity. The Borrower agrees to indemnify and hold harmless the
Custodian against any and all claims, losses, liabilities, damages or expenses
(including, but not limited to, attorneys' fees, court costs and costs of
investigation) of any kind or nature whatsoever arising out of or in connection
with this Agreement that may be imposed upon, incurred by or asserted against
the Custodian; crovided, however, that this Section shall not relieve the
Custodian from liability for its express obligations hereunder, willful
misfeasance, bad faith or gross negligence. The Custodian hereby acknowledges
that if it, in bad faith, fails to follow
13
the express terms of this Agreement which results in a loss or liability to the
Lender or the Borrower, such failure shall be deemed to constitute gross
negligence on the part of the Custodian hereunder except insofar as any such
failure may be excused (a) by the provisions of Section 17 hereof or (b) by the
need for the Custodian to follow any contrary orders or instructions received by
it from any court having jurisdiction, Federal or State banking authorities or
other government or regulatory bodies having jurisdiction over the Custodian.
The provisions of this Section 16 shall survive the resignation or removal of
the Custodian and the termination of this Agreement.
17. Limitation of Liability. (a) The Custodian shall not be liable to
the Borrower, the Lender, any Pledgee or any other Person with respect to any
action taken or not taken by it in good faith in the performance of its
obligations under this Agreement. The obligations of the Custodian shall be
determined solely by the express provisions of this Agreement. No
representation, warranty, covenant, agreement, obligation or duty of the
Custodian shall be implied with respect to this Agreement or the Custodian's
services hereunder.
(b) In the Custodian's review of documents pursuant to Section 3 of
this Agreement, the Custodian shall be under no duty or obligation to inspect,
review or examine the Custodian's Mortgage Files to determine that the contents
thereof are genuine, enforceable or appropriate for the represented purpose or
that they have been actually recorded or that they are other than what they
purport to be on their face.
(c) The Custodian may rely, and shall be protected in acting or
refraining to act, upon and need not verify the accuracy of, any (i) oral
instructions from any Persons the Custodian believes to be authorized to give
such instructions, who shall only be, with respect to the Borrower and to the
Lender, Persons the Custodian believes in good faith to be Authorized
Representatives, and (ii) any written instruction, notice, order, request,
direction, certificate, opinion or other instrument or document believed by the
Custodian to be genuine and to have been signed and presented by the proper
party or parties, which, with respect to the Borrower and to the Lender, shall
mean signature and presentation by Authorized Representatives whether such
presentation is by personal delivery, express delivery or facsimile.
(d) The Custodian may consult with counsel nationally recognized in the
area of commercial transactions and reasonably acceptable to the Lender with
regard to legal questions arising out of or in connection with this Agreement,
and the advice or opinion of such counsel shall be full and
14
complete authorization and protection in respect of any action taken, omitted or
suffered by the Custodian in reasonable reliance, in good faith, and in
accordance therewith.
(e) No provision of this Agreement shall require the Custodian to
expend or risk its own funds or otherwise incur financial liability in the
performance of its duties under this Agreement if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity is not
reasonably assured to it.
(f) The Custodian shall not be responsible or liable for, and makes no
representation or warranty with respect to, the validity, adequacy or perfection
of any lien upon, or security interest in, any Mortgage Loans or Custodian's
Mortgage Files purported to be granted at any time to the Lender or a Pledgee.
18. Term of Aqreement. This Agreement shall be terminated upon (a) the
final payment or other liquidation (or advance with respect thereto) of the last
Mortgage Loan in the Custodian's Mortgage Files, (b) the disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan in the Custodian's Mortgage Files, and the final remittance of all
funds due the Lender under all Interim Warehouse and Security Agreements or (c)
the delivery to a Pledgee or its designee of all of the Custodian's Mortgage
Files following a Notice of Default.
If either of the circumstances described in clause (a) or clause (b) of
this Section 18 shall occur, promptly after written notice from the Borrower and
the Lender to the Custodian to such effect, all documents remaining in the
Custodian's Mortgage Files shall be delivered to, or at the direction of, the
Borrower.
19. Authorized Representatives. The names of the officers of the
Borrower and of the Lender who are authorized to give and receive notices,
requests and instructions and to deliver certificates and documents in
connection with this Agreement on behalf of the Borrower and on behalf of the
Lender ("Authorized Representatives") are set forth on Exhibit 4, along with the
specimen signature of each such officer. From time to time, the Borrower and the
Lender may, by delivering to the Custodian a revised exhibit, change the
information previously given, but the Custodian shall be entitled to rely
conclusively on the last exhibit until receipt of a superseding exhibit.
20. Notices. All demands, notices and communications relating to this
Agreement shall be in writing and shall be deemed to have been duly given if
mailed, by registered or certified mail, return receipt requested, or by
15
overnight courier, or, if by other means, when received by the other party or
parties at the address shown below, or such other address as may hereafter be
furnished to the other party or parties by like notice. Any such demand, notice
or communication hereunder shall be deemed to have been received on the date
delivered to or received at the premises of the addressee (as evidenced, in the
case of registered or certified mail, by the date noted on the return receipt).
If to the Borrower:
Emergent Mortgage Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.
44 ▇. ▇▇▇▇▇▇▇▇▇▇ Way
P.O. Box 728
Greenville, South Carolina 29602
If to the Custodian:
First Union National Bank
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Lender:
Prudential Securities Credit
Corporation
One Seaport Plaza
27th Floor
Treasury Department
New York, New York 10292
Attention: ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
16
With a copy to:
Prudential Securities Incorporated
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10292
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Pledgee:
At the address specified in the applicable Notice of Pledge.
21. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to conflict
of laws applied in the state of New York.
22. Assignment. No party to this Agreement may assign its rights or
delegate its obligations under this Agreement without the express written
consent of the other parties, except as otherwise set forth in this Agreement.
23. Counterparts. For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed to be an original
and together shall constitute and be one and the same instrument.
24. Headinqs. The Section headings are not part of this Agreement and
shall not be used in its interpretation.
25. Use of Words. The definitions set forth in this Agreement include
both the singular and plural.
26. Transmission of Custodian's Mortgaqe Files. Written instructions as
to the method of shipment and shipper(s) the Custodian is directed to utilize in
connection with transmission of mortgage files and loan documents in the
performance of the Custodian's duties hereunder shall be delivered by the
Borrower to the Custodian prior to any shipment of any mortgage files and loan
documents hereunder. The Borrower will arrange for the provision of such
services at its sole cost and expense (or, at the Custodian's option, reimburse
the Custodian for all costs and expenses incurred by the Custodian consistent
with such instructions) and will maintain such insurance against loss or damage
to mortgage files and loan documents as the Borrower deems appropriate. Without
limiting the generality of the provisions of Section 16 above, it is expressly
agreed that in no event shall the Custodian have any liability for any losses or
damages to any
17
Person, including, without limitation, the Borrower or the Lender, arising out
of actions of the Custodian consistent with instructions of the Borrower or the
Lender.
[Signature Page Follows]
18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
EMERGENT MORTGAGE CORP., as
Borrower
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: VP & Treasurer
FIRST UNION NATIONAL BANK, as
Custodian
By:
Name:
Title:
PRUDENTIAL SECURITIES CREDIT
CORPORATION, as Lender
By:
Name:
Title:
EXHIBIT 1
Certification
Prudential Securities Credit
Corporation
One Seaport Plaza
Treasury Department
ATTN: ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Re: Custodial Agreement (the "Custodial Agreement") dated as of July _,
1997, among Prudential Securities Credit Corporation ("Lender"),
Emergent Mortgage Corp. ("Borrower") and First Union National Bank
("Custodian")
Ladies and Gentlemen:
In accordance with the provisions of section 3 of the above-referenced
Custodial Agreement, the undersigned, as the Custodian, hereby certifies that as
to each Mortgage Loan listed on the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan listed on the attachment hereto)
it has reviewed the Custodian's Mortgage Files and has determined that (except
as described on the attached exception report) (i) all documents required to be
delivered to it pursuant to Section 2 of the Custodial Agreement are in its
possession; (ii) such documents have been reviewed by it and have not been
mutilated, damaged, torn or otherwise physically altered and relate to such
Mortgage Loan; (iii) based on its examination and only as to the foregoing
documents, the information set forth in items (i), (ii), (iii), (iv), (v) and
(xi) of the definition of Mortgage Loan Schedule respecting such Mortgage Loan
accurately reflects the information on the Mortgage Loan Schedule; and (iv) each
Mortgage Note has been endorsed as provided in Section 2 of the Custodial
Agreement. The Custodian makes no representations as to and shall not be
responsible to verify (i) the validity, legality, enforceability, sufficiency,
due authorization or genuineness of any of the documents contained in each
Custodian's Mortgage File or of any of the Mortgage Loans or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words used herein shall have the respective meanings
assigned to them in the above-captioned Custodial Agreement.
FIRST UNION NATIONAL BANK, as
Custodian
By:
Print Name:
Title:
cc: Emergent Mortgage Corp.
2
Exception Report
3
EXHIBIT 2
[Reserved]
EXHIBIT 3
REQUEST FOR RELEASE AND RECEIPT OF DOCUMENTS
First Union National Bank
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Re: Custodial Agreement (the "Custodial Agreement") dated as of July _,
1997 among Prudential Securities Credit Corporation ("Lender"),
Emergent Mortgage Corp. ("Borrower") and First Union National Bank
("Custodian")
In connection with the administration of the Mortgage Loans held by you
as the Custodian for the Lender, we request the release of the (Custodian's
Mortgage File/specify documents) for the Mortgage Loan described below, for the
reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Reason for Requestinq Documents (check one)
_____ 1. Mortgage Loan Paid in Full
_____ 2. Mortgage Loan Redelivered Pursuant to Section 8 of the Custodial
Agreement
_____ 3. Mortgage Loan Liquidated by __________________________________
_____ 4. Mortgage Loan in Foreclosure
_____ 5. Mortgage Loan substituted with alternate Mortgage Loan to be
delivered to the Custodian with a
revised Mortgage Loan Schedule indicating substitutions
_____ 6. Other (explain)
EMERGENT MORTGAGE CORP.
By:
Print Name:
Title:
Date:
Please send file to:
[Address]
ACKNOWLEDGED
PRUDENTIAL SECURITIES CREDIT
CORPORATION, as Lender
By:
Print Name:
Title:
Date:
as Pledgee
By:
Print Name:
Title:
Date:
DOCUMENTS RETURNED TO THE CUSTODIAN
FIRST UNION NATIONAL BANK, as
Custodian
By:
Print Name:
Title:
Date:
2
EXHIBIT 4
Authorized Representatives
a) of Emergent Mortgage Corp.
Name Specimen Siqnature
1. ▇▇▇▇▇▇ ▇▇▇▇▇▇
2. ▇▇▇▇ ▇▇▇
3. ▇▇▇▇ ▇▇▇▇
4. ▇▇▇▇▇ ▇▇▇▇▇
5. ▇▇▇▇ ▇▇▇▇▇
6. ▇▇▇▇▇ ▇▇▇▇
b) of Prudential Securities Credit Corporation
Name Specimen Siqnature
1. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
2. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
3. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
EXHIBIT 5
NOTICE OF PLEDGE
TO:
First Union National Bank
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
[Borrower]
[Address]
Attention:
The undersigned (the "Lender") hereby notifies the Custodian and
Emergent Mortgage Corp. that the mortgage loans and related Custodian's Mortgage
Files specified in the attached Schedule A (the "Pledged Mortgage Loans") have
been pledged, sold pursuant to a repurchase facility, participated or otherwise
hypothecated by us pursuant to a _____________________ Agreement (the "Security
Agreement") dated as of ____________,1997, between the Lender and ______________
(the "Pledgee") and are to be held by you as bailee of, and agent for, the
Pledgee as secured party pursuant to the provisions of a Custodial Agreement
dated as of July __, 1997 among the Lender, Emergent Mortgage Corp. and First
Union National Bank (the "Custodial Agreement") until released or transferred as
provided in the Custodial Agreement.
An interest in the Pledged Mortgage Loans has been granted to the
Pledgee, a corporation having an address at __________________________ ,
pursuant to the Security Agreement. You are instructed to enter the Pledged
Mortgage Loans and to promptly provide to the Pledgee an acknowledgement of this
Notice of Pledge by signing in the space provided below and delivering
acknowledged copy of this Notice to the Pledgee at the above address. Such
acknowledgement will serve to confirm that this Notice of Pledge has been duly
received by you and that (i) the related Custodian's Mortgage Files are being
held by you as bailee of, and agent for, the Pledgee and (ii) you have duly
reflected on your records that the Pledgee has been granted an interest in and
to such Mortgage Loans and related Custodian's Mortgage Files all in accordance
with the provisions of the Custodial Agreement and the Security Agreement.
PRUDENTIAL SECURITIES CREDIT
CORPORATION
By:
Name:
Title:
Date:
ACKNOWLEDGMENT OF PLEDGE
ACKNOWLEDGED:
FIRST UNION NATIONAL BANK, as Custodian
By:
Name:
Title:
Date:
2
EXHIBIT 6
RELEASE OF PLEDGE
TO:
First Union National Bank
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
The undersigned, in accordance with Section 5(c) of the Custodial
Agreement dated as of July _, 1997 among Prudential Securities Credit
Corporation, Emergent Mortgage Corp. and First Union National Bank, hereby
releases all of its lien and interest in the Mortgage Loans and related
Custodian's Mortgage Files identified in Schedule A to this Release of Pledge
and instructs the Custodian to reflect such release on its records.
(PLEDGEE)
By:
Name:
Title:
Date:
EXHIBIT 7
[RESERVED]
EXHIBIT 8
NOTIFICATION IN EVENT OF DEFICIENCY
IN CUSTODIAN'S MORTGAGE FILES
________________, 199_
TO:
First Union National Bank
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Re: Custodial Agreement (the "Custodial Agreement") dated as of July _,
1997, among Prudential Securities Credit Corporation ("Lender"),
Emergent Mortgage Corp. ("Borrower") and First Union National Bank
("Custodian")
The undersigned, in accordance with Section 4 of the Custodial Agreement, hereby
notifies the Custodian that:
[ ] The Borrower shall deliver the following documents to the Custodian within
five (5) Business Days from the date hereof
[list of documents]
[ ] The Lender has waived the Deficiencies noted in the Certification.
[ ] The Borrower shall cure the Deficiencies within five (5) Business Days from
the date hereof.
[ ] The Borrower shall substitute another Mortgage Loan for the deficient
Mortgage Loan and shall deliver to the Custodian the Custodian's Mortgage
File with respect to the substituted Mortgage Loan within five (5) Business
Days from the date hereof.
[ ] The Custodian shall release the deficient Custodian's Mortgage Loan File to
the Borrower.
[ ] The Custodian shall retain the deficient Custodian's Mortgage File.
Capitalized words used herein shall have the respective meanings assigned to
them in the above-captioned Custodial Agreement.
PRUDENTIAL SECURITIES CREDIT
CORPORATION
By:
Name:
Title:
Date:
2
EXHIBIT 9
RELEASE OF MORTGAGE LOANS
TO:
First Union National Bank
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
The undersigned, in accordance with Section 6(c) of the Custodial
Agreement dated as of July _, 1997 among Prudential Securities Credit
Corporation, Emergent Mortgage Corp. and First Union National Bank, hereby
releases all of its lien and interest in the Mortgage Loans and related
Custodian's Mortgage Files identified in Schedule A to this Release of Mortgage
Loans.
PRUDENTIAL SECURITIES CREDIT
CORPORATION
By:
Name:
Title:
Date: