Document/Exhibit Description Pages Size
1: 8-K Current Report 8 31K
2: EX-1.1 Asset Backed Notes 27 99K
3: EX-1.2 Indemnification Agreeement 16 62K
4: EX-4.1 Indenture 88 434K
5: EX-4.2 Sale and Servicing Agreement 116 417K
6: EX-4.3 Form of Note Insurance Policy and Endorsement 9 37K
7: EX-4.4 Unaffiliated Seller's Agreement 66 226K
8: EX-4.5 Purchase Agreement and Assignment 54 196K
9: EX-4.6 Glossary of Defined Terms 37 141K
10: EX-23.1 Consent of Independent Accountants 1 8K
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INDEMNIFICATION AGREEMENT
among
FINANCIAL SECURITY ASSURANCE INC.
HOMEGOLD HOME EQUITY LOAN TRUST 1999-1
EMERGENT MORTGAGE HOLDINGS CORPORATION
HOMEGOLD FINANCIAL, INC.
HOMEGOLD, INC.
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
and
PRUDENTIAL SECURITIES INCORPORATED
Dated as of May 19, 1999
HomeGold Home Equity Loan Trust 1999-1
$53,964,000 HomeGold Home Equity Loan
Asset Backed Notes Series 1999-1
--------------------------------------------------------------------------------
TABLE OF CONTENTS
[Enlarge/Download Table]
Page
Section 1. Definitions.....................................................................................1
Section 2. Representations, Warranties and Agreements of Financial Security................................3
Section 3. Representations, Warranties and Agreements of the Underwriter...................................6
Section 4. Indemnification.................................................................................6
Section 5. Indemnification Procedures......................................................................7
Section 6. Contribution....................................................................................8
Section 7. Miscellaneous...................................................................................9
EXHIBIT
Exhibit A Opinion of General Counsel
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT dated as of May 19, 1999, among
FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), HOMEGOLD HOME
EQUITY LOAN TRUST 1999-1 (the "Issuer"), EMERGENT MORTGAGE HOLDINGS
CORPORATION (the "Seller"), HOMEGOLD, INC. (the "Originator"), HOMEGOLD
FINANCIAL, INC. (the "Company"), PRUDENTIAL SECURITIES SECURED FINANCING
CORPORATION (the "Depositor") and PRUDENTIAL SECURITIES INCORPORATED (the
"Underwriter"):
Section 1. Definitions. Capitalized terms used herein and not
defined shall have the meanings assigned in the Insurance Agreement or, if not
defined therein, in the Glossary of Terms attached as Exhibit A to each of the
Sale and Servicing Agreement, the Indenture and the Trust Agreement. For
purposes of this Agreement, the following terms shall have the meanings provided
below:
"Agreement" means this Indemnification Agreement, as amended
from time to time.
"Company Party" means any of the Company, its parent,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
"Depositor Party" means any of the Depositor, its parent,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
"Financial Security Agreements" means this Agreement and the
Insurance Agreement.
"Financial Security Information" has the meaning provided in
Section 2(g) hereof.
"Financial Security Party" means any of Financial Security,
its parent, subsidiaries and affiliates, and any shareholder, director, officer,
employee, agent or "controlling person" (as such term is used in the Securities
Act) of any of the foregoing.
"Indemnified Party" means any party entitled to any
indemnification pursuant to Section 4 hereof.
"Indemnifying Party" means any party required to provide
indemnification pursuant to Section 4 hereof.
"Insurance Agreement" means the Insurance and Indemnity
Agreement, dated as of May 1, 1999, by and among Financial Security, the
Depositor, the Company, the Originator, the Seller, HomeGold Residual
Corporation and the Issuer.
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"Indenture" means the Indenture, dated as of May 1, 1999,
between the Issuer and First Union National Bank, as indenture trustee.
"Issuer Party" means any of the Issuer, its parent,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
"Losses" means (a) any actual out-of-pocket damages incurred
by the party entitled to indemnification or contribution hereunder, (b) any
actual out-of-pocket costs or actual expenses reasonably incurred by such party,
including reasonable fees or expenses of its counsel and other expenses incurred
in connection with investigating or defending any claim, action or other
proceeding which entitle such party to be indemnified hereunder (subject to the
limitations set forth in Section 5 hereof), to the extent not paid, satisfied or
reimbursed from funds provided by any other Person other than an affiliate of
such party (provided that the foregoing shall not create or imply any obligation
to pursue recourse against any such other Person), plus (c) interest on the
amount paid by the party entitled to indemnification or contribution from the
date of such payment to the date of payment by the party who is obligated to
indemnify or contribute hereunder at the statutory rate applicable to judgments
for breach of contract.
"Notes" means the HomeGold Home Equity Loan Trust 1999-1,
$53,964,000 HomeGold Home Equity Loan Asset Backed Notes, Series 1999-1, issued
by the Issuer pursuant to the Indenture.
"Offering Circular" means the Prospectus relating to the Notes
dated March 23, 1999, as supplemented by the Prospectus Supplement relating to
the Notes dated May 19, 1999.
"Offering Document" means the Offering Circular and any
amendments or supplements thereto and any other material or documents delivered
by the Underwriter to any Person in connection with the offer or sale of the
Notes.
"Originator Party" means any of the Originator, its parent,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
"Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated organization or other organization or entity
(whether governmental or private).
"Policy" means the financial guaranty insurance policy,
including any endorsements thereto, issued by Financial Security with respect to
the Notes.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement, dated as of May 1, 1999, among the Issuer as issuer, the Originator
as servicer, Fairbanks Capital Corp. as back-up servicer, the Depositor as
depositor and First Union National Bank as indenture trustee.
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"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Seller Party" means any of the Seller, its parent,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
"Underwriting Agreement" means the Underwriting Agreement,
dated May 19, 1999, among the Issuer, the Depositor and the Underwriter in
respect of the Notes.
"Underwriter Information" has the meaning provided in Section
3(b) hereof.
"Underwriter Party" means any of the Underwriter, its parent,
subsidiaries and affiliates and any shareholder, director, officer, employee,
agent or "controlling person" (as such term is used in the Securities Act) of
any of the foregoing.
Section 2. Representations, Warranties and Agreements of
Financial Security. Financial Security represents, warrants and agrees, as of
the date hereof and as of the Closing Date, as follows:
(a) Organization, Etc. Financial Security is a stock insurance
company duly organized, validly existing, in good standing and
authorized to transact financial guaranty insurance business
under the laws of the State of New York.
(b) Authorization, Etc. The Policy and the Financial Security
Agreements have been duly authorized, executed and delivered
by Financial Security.
(c) Validity, Etc. The Policy and the Financial Security
Agreements constitute legal, valid and binding obligations of
Financial Security, enforceable against Financial Security in
accordance with their terms, subject, as to the enforcement of
remedies, to bankruptcy, insolvency, reorganization,
rehabilitation, moratorium and other similar laws affecting
the enforceability of creditors' rights generally applicable
in the event of the bankruptcy or insolvency of Financial
Security and to the application of general principles of
equity and subject, in the case of this Agreement, to
principles of public policy limiting the right to enforce the
indemnification provisions contained herein.
(d) Exemption From Registration. The Policy is exempt from
registration under the Securities Act.
(e) No Conflicts. Neither the execution or delivery by
Financial Security of the Policy or the Financial Security
Agreements, nor the performance by Financial Security of its
obligations thereunder, will conflict with any provision of
the certificate of incorporation or the bylaws of Financial
Security nor result in a breach of, or constitute a default
under, any material agreement or other instrument
-4-
to which Financial Security is a party or by which any of its
property is bound nor violate any judgment, order or decree
applicable to Financial Security of any governmental or
regulatory body, administrative agency, court or arbitrator
having jurisdiction over Financial Security (except that, in
the published opinion of the Securities and Exchange
Commission, the indemnification provisions of this Agreement,
insofar as they relate to indemnification for liabilities
arising under the Securities Act, are against public policy as
expressed in the Securities Act and are therefore
unenforceable).
(f) Financial Information. The consolidated balance sheets of
Financial Security as of December 31, 1998 and December 31,
1997 and the related consolidated statements of income,
changes in shareholder's equity and cash flows for the fiscal
years then ended and the interim consolidated balance sheet of
Financial Security as of March 31, 1999, and the related
statements of income, changes in shareholder's equity and cash
flows for the interim period then ended, furnished by
Financial Security for use in the Offering Circular, fairly
present in all material respects the financial condition of
Financial Security as of such dates and for such periods in
accordance with generally accepted accounting principles
consistently applied except as noted therein (subject as to
interim statements to normal year-end adjustments) and since
the date of the most current interim consolidated balance
sheet referred to above there has been no change in the
financial condition of Financial Security which would
materially and adversely affect its ability to perform its
obligations under the Policy.
(g) Financial Security Information. The information in the
Offering Circular set forth under the caption "The Insurer"
(as revised from time to time in accordance with the
provisions hereof, the "Financial Security Information") is
limited and does not purport to provide the scope of
disclosure required to be included in a prospectus with
respect to a registrant in connection with the offer and sale
of securities of such registrant registered under the
Securities Act. Within such limited scope of disclosure,
however, as of the date of the Offering Circular and as of the
date hereof, the Financial Security Information does not
contain any untrue statement of a material fact, or omit to
state a material fact necessary to make the statements
contained therein, in light of the circumstances under which
they were made, not misleading.
(h) Additional Information. Financial Security will furnish to
the Issuer, the Seller, the Originator, the Company, the
Depositor or the Underwriter, upon request of the Issuer, the
Seller, the Originator, the Company, the Depositor or the
Underwriter, as the case may be, copies of Financial
Security's most recent financial statements (annual or
interim, as the case may be) which fairly present in all
material respects the financial condition of Financial
Security as of the dates and for the periods indicated, in
accordance with generally accepted accounting principles
consistently applied except as noted therein (subject, as to
interim
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statements, to normal year-end adjustments); provided,
however, that, if the Issuer, the Seller, the Originator, the
Company, the Depositor or the Underwriter shall require a
manually signed report or consent of Financial Security's
auditors in connection with such financial statements, such
report or consent shall be at the expense of the Issuer, the
Seller, the Originator, the Company, the Depositor or the
Underwriter, as the case may be. In addition, if the delivery
of an Offering Circular relating to the Notes is required at
any time prior to the expiration of nine months after the time
of issue of the Offering Circular in connection with the
offering or sale of the Notes, the Issuer, the Depositor or
the Underwriter will notify Financial Security of such
requirement to deliver an Offering Circular and Financial
Security will promptly provide the Issuer, the Depositor and
the Underwriter with any revisions to the Financial Security
Information that are in the judgment of Financial Security
necessary to prepare an amended Offering Circular or a
supplement to the Offering Circular which will correct such
statement or omission.
(i) Opinion of Counsel. Financial Security will furnish to the
Issuer, the Seller, the Originator, the Company, the Depositor
and the Underwriter on the closing date for the sale of the
Notes an opinion of its Associate General Counsel, to the
effect set forth in Exhibit A attached hereto, dated such
closing date and addressed to the Issuer, the Seller, the
Originator, the Company, the Depositor and the Underwriter.
(j) Consents and Reports of Independent Accountants. Financial
Security will furnish to the Issuer, the Seller, the
Originator, the Company, the Depositor and the Underwriter,
upon request, as comfort from its independent accountants in
respect of its financial condition, (i) at the expense of the
Person specified in the Insurance Agreement, a copy of the
Offering Circular, including either a manually signed consent
or a manually signed report of Financial Security's
independent accountants and (ii) the quarterly review letter
by Financial Security's independent accountants in respect of
the most recent interim financial statements of Financial
Security.
Nothing in this Agreement shall be construed as a representation or warranty by
Financial Security concerning the rating of its claims-paying ability by
Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies,
Inc. or Moody's Investors Service, Inc. or any other rating agency
(collectively, the "Rating Agencies"). The Rating Agencies, in assigning such
ratings, take into account facts and assumptions not described in the Offering
Circular and the facts and assumptions which are considered by the Rating
Agencies, and the ratings issued thereby, are subject to change over time.
Section 3. Representations, Warranties and Agreements of the
Underwriter. The Underwriter represents, warrants and agrees, as of the date
hereof and as of the Closing Date, as follows:
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(a) Compliance With Laws. The Underwriter will comply in all
material respects with all legal requirements in connection with offers and
sales of the Notes and make such offers and sales in the manner provided in the
Offering Circular.
(b) Offering Document. The Underwriter will not use, or
distribute to other broker-dealers for use, any Offering Document in connection
with the offer and sale of the Notes unless such Offering Document includes such
information as has been furnished by Financial Security for inclusion therein
and the information therein concerning Financial Security has been approved by
Financial Security in writing. Financial Security hereby consents to the
information in respect of Financial Security included in the Offering Circular.
Each Offering Document will include the following statement: "The Policy is not
covered by the property/casualty insurance security fund specified in Article 76
of the New York Insurance Law".
(c) Underwriting Information. All material provided by the
Underwriter for inclusion in the Offering Documents, insofar as such information
relates to the Underwriter, and any Derived Information (as defined in the
Underwriting Agreement) (as revised from time to time, collectively the
"Underwriter Information") is true and correct in all material respects. In
respect of the Offering Documents, the Underwriter Information is limited to the
information set forth under the caption "Plan of Distribution" in the Offering
Documents.
Section 4. Indemnification. (a) Financial Security agrees,
upon the terms and subject to the conditions provided herein, to indemnify,
defend and hold harmless each Issuer Party, each Seller Party, each Originator
Party, each Company Party, each Depositor Party and each Underwriter Party
against (i) any and all Losses incurred by them with respect to the offer and
sale of the Notes and resulting from Financial Security's breach of any of its
representations, warranties or agreements set forth in Section 2 hereof and (ii)
any and all Losses to which any Issuer Party, Seller Party, Originator Party,
Company Party, Depositor Party or Underwriter Party may become subject, under
the Securities Act or otherwise, insofar as such Losses arise out of or result
from an untrue statement of a material fact contained in any Offering Document
or the omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or omission was made
in the Financial Security Information included therein in accordance with the
provisions hereof.
(b) The Underwriter agrees, upon the terms and subject to the
conditions provided herein, to indemnify, defend and hold harmless each
Financial Security Party against (i) any and all Losses incurred by them with
respect to the offer and sale of the Notes and resulting from the Underwriter's
breach of any of its representations, warranties or agreements set forth in
Section 3 hereof and (ii) any and all Losses to which any Financial Security
Party may become subject, under the Securities Act or otherwise, insofar as such
Losses arise out of or result from an untrue statement of a material fact
contained in any Offering Document or the omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or omission was made in the Underwriter Information included
therein.
-7-
(c) Upon the incurrence of any Losses for which a party is
entitled to indemnification hereunder, the Indemnifying Party shall reimburse
the Indemnified Party promptly upon establishment by the Indemnified Party to
the Indemnifying Party of the Losses incurred.
Section 5. Indemnification Procedures. Except as provided
below in Section 6 with respect to contribution or in Section 7(e), the
indemnification provided herein by an Indemnifying Party shall be the exclusive
remedy of any and all Indemnified Parties for the breach of a representation,
warranty or agreement hereunder by an Indemnifying Party; provided, however,
that each Indemnified Party shall be entitled to pursue any other remedy at law
or in equity for any such breach so long as the damages sought to be recovered
shall not exceed the Losses incurred thereby resulting from such breach. In the
event that any action or regulatory proceeding shall be commenced or claim
asserted which may entitle an Indemnified Party to be indemnified under this
Agreement, such party shall give the Indemnifying Party written or telegraphic
notice of such action or claim reasonably promptly after receipt of written
notice thereof. The Indemnifying Party shall be entitled to participate in and,
upon notice to the Indemnified Party, assume the defense of any such action or
claim in reasonable cooperation with, and with the reasonable cooperation of,
the Indemnified Party. The Indemnified Party will have the right to employ its
own counsel in any such action in addition to the counsel of the Indemnifying
Party, but the fees and expenses of such counsel will be at the expense of such
Indemnified Party, unless (a) the employment of counsel by the Indemnified Party
at its expense has been authorized in writing by the Indemnifying Party, (b) the
Indemnifying Party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, or (c) the named parties to any such action or proceeding
(including any impleaded parties) include both the Indemnifying Party and one or
more Indemnified Parties, and the Indemnified Parties shall have been advised by
counsel that there may be one or more legal defenses available to them which are
different from or additional to those available to the Indemnifying Party (it
being understood, however, that the Indemnifying Party shall not, in connection
with any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for all Issuer
Parties, one such firm for all Seller Parties, one such firm for all Originator
Parties, one such firm for all Company Parties, one such firm for all Depositor
Parties, one such firm for all Underwriter Parties and one such firm for all
Financial Security Parties, as the case may be, which firm shall be designated
in writing by the Issuer in respect of the Issuer Parties, by the Seller in
respect of the Seller Parties, by the Originator in respect of the Originator
Parties, by the Company in respect of the Company Parties, by the Depositor in
respect of the Depositor Parties, by the Underwriter in respect of the
Underwriter Parties, and by Financial Security in respect of the Financial
Security Parties), in each of which cases the fees and expenses of counsel will
be at the expense of the Indemnifying Party and all such fees and expenses will
be reimbursed promptly as they are incurred. The Indemnifying Party shall not be
liable for any settlement of any such claim or action unless the Indemnifying
Party shall have consented thereto or been in default in its obligations
hereunder. Any failure by an
-8-
Indemnified Party to comply with the provisions of this Section shall relieve
the Indemnifying Party of liability only if such failure is prejudicial to the
position of the Indemnifying Party and then only to the extent of such
prejudice.
Section 6. Contribution. (a) To provide for just and equitable
contribution if the indemnification provided by any Indemnifying Party is
determined to be unavailable for any Indemnified Party (other than due to
application of this Section), each Indemnifying Party shall contribute to the
Losses arising from any breach of any of its representations, warranties or
agreements contained in this Agreement in such proportion as is appropriate to
reflect (i) the benefits received by such Indemnifying Party relative to the
benefits received by the Indemnified Party or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Indemnifying Party on the one hand and
the Indemnified Party on the other in connection with such Loss; provided,
however, that an Indemnifying Party shall in no event be required to contribute
to all Indemnified Parties an aggregate amount in excess of the Losses incurred
by such Indemnified Parties resulting from the breach of representations,
warranties or agreements contained in this Agreement.
(b) The relative fault of each Indemnifying Party, on the one
hand, and of each Indemnified Party, on the other, shall be determined by
reference to, among other things, whether the breach of, or alleged breach of,
any representations, warranties or agreements contained in this Agreement
relates to information supplied by, or action within the control of, the
Indemnifying Party or the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
breach.
(c) The parties agree that Financial Security shall be solely
responsible for the Financial Security Information, the Underwriter shall be
solely responsible for the Underwriter Information and that, as and to the
extent provided in the Insurance Agreement, the balance of the Offering Document
shall be the responsibility of the Issuer, the Seller, the Originator, the
Company and the Depositor.
(d) Notwithstanding anything in this Section 6 to the
contrary, the Underwriter shall not be required to contribute an amount greater
than the excess, if any, of (x) the purchase prices paid by investors to the
Underwriter for the Notes over (y) the purchase price paid by the Underwriter
for such Notes.
(e) No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) Upon the incurrence of any Losses entitled to contribution
hereunder, the contributor shall reimburse the party entitled to contribution
promptly upon establishment by the party entitled to contribution to the
contributor of the Losses incurred.
-9-
(g) The provisions relating to contribution set forth in this
Section 6 do not limit the rights of any party to indemnification under Section
4.
Section 7. Miscellaneous.
(a) Notices. All notices and other communications provided for
under this Agreement shall be delivered to the address set forth below or to
such other address as shall be designated by the recipient in a written notice
to the other party or parties hereto.
If to Financial Security: Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022
Attention: Surveillance Department
Re: Emergent Home Equity Loan Owner Trust 1999-1
If to the Issuer: Emergent Home Equity Loan Trust 1999-1
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
If to the Company: HomeGold Financial, Inc.
3901 Pelham Road
Greenville, South Carolina 29615
Attention: Kevin J. Mast
If to the Depositor: Prudential Securities Secured Financing Corporation
One New York Plaza, 15th Floor
New York, New York 10292
Attention: Manager--Asset-Backed Finance Group
If to the Seller: Emergent Mortgage Holdings Corporation
44 East Camperdown Way
Greenville, South Carolina 29601
Attention: William P. Crawford, Jr.
If to the Originator: HomeGold, Inc.
3901 Pelham Road
Greenville, South Carolina 29615
Attention: Laird Minor
If to the Underwriter: Prudential Securities Incorporated
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One New York Plaza, 15th Floor
New York, New York 10292
Attention: Manager-Asset Finance Group
(b) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflict of laws principles thereof.
(c) Assignments. This Agreement may not be assigned by any
party without the express written consent of each other party. Any assignment
made in violation of this Agreement shall be null and void.
(d) Amendments. Amendments of this Agreement shall be in
writing signed by each party hereto.
(e) Survival, Etc. The indemnity and contribution agreements
contained in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Indemnifying
Party, (ii) the issuance of the Notes or (iii) any termination of this Agreement
or the Policy. The indemnification provided in this Agreement will be in
addition to any liability which the parties hereto may otherwise have and shall
in no way limit any rights or obligations of the parties under the Underwriting
Agreement or the Insurance Agreement.
(f) Counterparts. This Agreement may be executed in
counterparts by the parties hereto, and all such counterparts shall constitute
one and the same instrument.
(g) Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally, but solely as
trustee of HomeGold Home Equity Loan Trust 1999-1 under the Trust Agreement,
dated as of May 1, 1999, with the Seller, in the exercise of the powers and
authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Issuer is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Issuer, (c) nothing herein contained shall be construed as creating any
liability on Wilmington Trust Company, individually or personally, to perform
any covenant either expressly or impliedly contained herein, all such liability,
if any, being expressly waived by the parties hereto and by any Person claiming
by, through or under the parties hereto and (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement or the other Basic Documents.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon acceptance hereof
by you, this letter and such acceptance hereof, including the provisions of the
Standard Provisions incorporated herein by reference, shall constitute a binding
agreement among the Underwriter, the Depositor and the Trust.
Very truly yours,
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By: /s/ Mary Alice Kohs
---------------------------------
Name: Mary Alice Kohs
Title: Vice President
HOMNEGOLD HOME EQUITY LOAN
TRUST 1999-1, Issuer
By: WILMINGTON TRUST COMPANY
not in its individual capacity
but solely as Owner Trustee
By: /s/ Emmet Harmon
---------------------------------
Name:
Title:
Accepted as of the date hereof:
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Brendan Keane
---------------------------------
Name: Brendan Keane
Title: Director
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first above written.
FINANCIAL SECURITY ASSURANCE HOMEGOLD INC.
INC.
By: /s/ Laird Minor
------------------------------
By: /s/ Glenn Tso Name:
------------------------------ Title:
Name:
Title: Authorized Officer
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
HOMEGOLD HOME EQUITY LOAN
TRUST 1999-1
By: /s/ Mary Alice Kohs
------------------------------
By WILMINGTON TRUST COMPANY, Name: Mary Alice Kohs
not in its individual capacity but solely as Title:
Owner Trustee
PRUDENTIAL SECURITIES
By: /s/ Amy L. Martin INCORPORATED
------------------------------
Name: Amy L. Martin
Title: Administrative Account Manager By: /s/ Brendan N. Keane
------------------------------
Name: Brendan N. Keane
EMERGENT MORTGAGE HOLDINGS Title: Director
CORPORATION
By: /s/ Laird Minor
------------------------------
Name:
Title:
HOMEGOLD FINANCIAL, INC.
By: /s/ Kevin Mast
------------------------------
Name:
Title:
EXHIBIT A
OPINION OF GENERAL COUNSEL
Based upon the foregoing, I am of the opinion that:
1. Financial Security is a stock insurance company duly
organized, validly existing and authorized to transact financial guaranty
insurance business under the laws of the State of New York.
2. The Policy and the Agreements have been duly authorized,
executed and delivered by Financial Security.
3. The Policy and the Agreements constitute valid and binding
obligations of Financial Security, enforceable against Financial Security in
accordance with their terms, subject, as to the enforcement of remedies, to
bankruptcy, insolvency, reorganization, rehabilitation, moratorium and other
similar laws affecting the enforceability of creditors' rights generally
applicable in the event of the bankruptcy or insolvency of Financial Security
and to the application of general principles of equity and subject, in the case
of the Indemnification Agreement, to principles of public policy limiting the
right to enforce the indemnification provisions contained therein insofar as
they relate to indemnification for liabilities arising under applicable
securities laws.
4. The Policy is exempt from registration under the Securities
Act of 1933, as amended (the "Act").
5. Neither the execution or delivery by Financial Security of
the Policy or the Agreements, nor the performance by Financial Security of its
obligations thereunder, will conflict with any provision of the certificate of
incorporation or the by-laws of Financial Security or, to the best of my
knowledge, result in a breach of, or constitute a default under, any agreement
or other instrument to which Financial Security is a party or by which it or any
of its property is bound or, to the best of my knowledge, violate any judgment,
order or decree applicable to Financial Security of any governmental or
regulatory body, administrative agency, court or arbitrator having jurisdiction
over Financial Security (except that in the published opinion of the Securities
and Exchange Commission the indemnification provisions of the Indemnification
Agreement, insofar as they relate to indemnification for liabilities arising
under the Act, are against public policy as expressed in the Act and are
therefore unenforceable).
In addition, please be advised that I have reviewed the
description of Financial Security under the caption "The Insurer" in the
Prospectus Supplement dated May 19, 1999 (the "Offering Document") of the Issuer
with respect to the Notes. The information provided in the Offering Document
with respect to Financial Security is limited and does not purport to provide
the scope of disclosure required to be included in a prospectus with respect to
a registrant under the Act in connection with a public offering and sale of
securities of such registrant. Within such
limited scope of disclosure, however, there has not come to my attention any
information which would cause me to believe that the description of Financial
Security referred to above, as of the date of the Offering Document or as of the
date of this opinion, contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (except that I express no opinion with respect to any
financial statements or other financial information contained or referred to
therein).
Dates Referenced Herein and Documents Incorporated by Reference
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