MASTER LOAN TRANSFER AGREEMENT
Dated as of June 1, 1997
by and between
EQUIVANTAGE ACCEPTANCE CORP.,
the Company
and
EQUIVANTAGE INC.,
the Originator
TABLE OF CONTENTS
Page
Section 1. Definitions.....................................................1
Section 2. Interest Calculations...........................................5
Section 3. Transfers of Mortgage Loans.....................................5
Section 4. Representations, Warranties and Covenants Regarding
the Originator and the Company..................................6
Section 5. Representations and Warranties of the Originator
Regarding the Mortgage Loans...................................11
Section 6. Covenants of the Originator to Take Certain Actions with
Respect to the Mortgage Loans in Certain Situations............22
Section 7. Term of Agreement..............................................23
Section 8. Authorized Representatives.....................................23
Section 9. Notices........................................................23
Section 10. Governing Law..................................................25
Section 11. Assignment.....................................................25
Section 12. Counterparts...................................................25
Section 13. Amendment......................................................25
Section 14. Severability of Provisions.....................................25
Section 15. No Agency; No Partnership or Joint Venture.....................26
Section 16. Further Assurances.............................................26
Section 17. The Certificate Insurer and the Trustee........................26
i
THIS MASTER LOAN TRANSFER AGREEMENT, dated as of June 1, 1997, is between
EquiVantage Acceptance Corp. (the "Company") and EquiVantage Inc., in its
separate capacity as an originator or purchaser of mortgage loans (the
"Originator").
WHEREAS, the Originator is an originator and purchaser of mortgage loans
that the Originator may, from time to time, sell to the Company;
WHEREAS, the Company may, from time to time, purchase such mortgage loans
from the Originator; and
WHEREAS, it is the intent of the Company to include mortgage loans so
purchased by the Company in securitization transactions from time to time
sponsored by the Company.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Definitions. Whenever used in this Agreement or in any
Conveyance Agreement, the following words and phrases, unless the context
otherwise requires, shall have the meanings specified in this Article; provided,
however, that any capitalized terms used herein or in any Conveyance Agreement
and not defined herein shall have their respective meanings as set forth in the
related Pooling and Servicing Agreement.
Additional Representations and Warranties: As defined in Section 5(a)
hereof.
Agreement: This Master Loan Transfer Agreement as may be amended from time
to time, including the exhibits and supplements hereto.
Appraised Value: The appraised value of any Property based upon the
appraisal or other valuation made at the time of the origination of the related
Mortgage Loan or, in the case of a Mortgage Loan that is a purchase money
mortgage, the sales price of the Property at such time of origination, if such
sales price is less than such appraised value, in either case subject to
downward adjustment by the Originator.
Authorized Representatives: As defined in Section 8 hereof and each Person
as set forth in Exhibit B hereto.
Balloon Loan: Any Mortgage Loan that has an amortization schedule that
extends beyond its maturity date, resulting in a relatively large unamortized
principal balance due in a single payment at maturity.
Certificate Insurance Policy: The Certificate Insurance Policy issued by
the Certificate Insurer as described in the related Pooling and Servicing
Agreement.
Certificate Insurer: Financial Guaranty Insurance Company, a New York
stock insurance company, or any successor thereto, issuing the Certificate
Insurance Policy.
Closing Date: With respect to any Pool, as defined in the related
Conveyance Agreement.
Code: The Internal Revenue Code of 1986, as amended, and any successor
statute thereto.
Conveyance Agreement: Any Conveyance Agreement relating to a Pool, in
substantially the form set forth as Exhibit A hereto.
Coupon Rate: The rate of interest borne by each Note.
Cut-Off Date: With respect to any Pool, as defined in the related
Conveyance Agreement.
Delinquent: A Mortgage Loan is "Delinquent" if any payment due thereon is
not made by the close of business on the day such payment is scheduled to be
due. A Mortgage Loan is 30 days delinquent if such payment has not been
received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month), then on the last day
of such immediately succeeding month; and a Mortgage Loan that is 60 days
delinquent, 90 days delinquent and so on, should be construed similarly.
EquiVantage Trust: An investor trust created by the Company to purchase
the Mortgage Loans acquired by the Company from the Originator pursuant to this
Agreement and the Conveyance Agreements.
EquiVantage Trust Certificates: The certificates issued by an EquiVantage
Trust.
File: The documents delivered to the Trustee pursuant to the document
delivery provisions of the related Pooling and Servicing Agreement pertaining to
a particular Mortgage Loan, together with any additional documents required to
be added to the File pursuant to this Agreement.
First Mortgage Loan: A Mortgage Loan secured by a first priority mortgage
lien with respect to any Property.
Holder: The Person in whose name an EquiVantage Trust Certificate is
recorded in a register maintained by the Trustee, as defined in the related
Pooling and Servicing Agreement.
2
Insured Payment: As defined in the related Pooling and Servicing
Agreement.
Insurance Policy: Any hazard, title or primary mortgage insurance policy
relating to a Mortgage Loan.
Loan Balance: With respect to each Mortgage Loan, as defined in the
related Pooling and Servicing Agreement.
Mortgage: The mortgage, deed of trust or other instrument creating a first
or second lien on an estate in fee simple in real property, in accordance with
applicable law, securing a Note.
Mortgage Loan: Each of the mortgage loans transferred and assigned to the
Company by the Originator pursuant hereto.
Mortgagor: The obligor on a Note.
Note: The note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan.
Offered Certificates: Any securities issued by an EquiVantage Trust that
are not retained by the Company, any of the Company's affiliates or the
Originator.
Operative Documents: This Agreement, the related Pooling and Servicing
Agreement, the related Conveyance Agreement and other agreements described in
the related Pooling and Servicing Agreement.
Original Principal Amount: With respect to each Note, the principal amount
of such Note or the mortgage note relating to a Senior Lien, as the case may be,
on the date of origination thereof.
Originator: EquiVantage Inc., a Delaware corporation.
Percentage Interest: As defined in the related Pooling and Servicing
Agreement.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pool: The pool of Mortgage Loans transferred to the Company or an
EquiVantage Trust pursuant to a specific Conveyance Agreement.
3
Pooling and Servicing Agreement: Any Pooling and Servicing Agreement
entered into by and among EquiVantage Acceptance Corp., in its corporate
capacity and in its capacity as Sponsor, the Servicer and the Trustee, as it may
be amended and supplemented from time to time by the parties thereto.
Primary Parcel: With respect to any Property with multiple parcels, the
parcel that was given primary consideration.
Principal and Interest Account: As defined in the related Pooling and
Servicing Agreement.
Program Loan: A Mortgage Loan evidenced by a Note amended to reflect the
participation of the Mortgagor thereunder in a loan program created by the
Company to encourage timely mortgage loan payments from certain borrowers
through the use of an automatic interest rate reduction mechanism.
Property: The property on which a lien is granted to secure a Mortgage
Loan.
Prospectus: Any prospectus (including any prospectus supplement) relating
to the Registration Statement pursuant to which Offered Certificates are
offered.
Qualified Mortgage: "Qualified Mortgage" shall have the meaning set forth
from time to time in the definition thereof at Section 860G(a)(3) of the Code
and applicable to the related EquiVantage Trust.
Qualified Replacement Mortgage: A Mortgage Loan substituted for another
pursuant to the relevant provisions of the related Pooling and Servicing
Agreement.
Registration Statement: The Registration Statement filed by the Company
with the Securities and Exchange Commission, including all amendments thereto
and including the Prospectus concerning the related EquiVantage Trust
Certificates constituting a part thereof.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
Remittance Date: Any date on which the Servicer is required to remit to
the Trustee moneys on deposit in the Principal and Interest Account as defined
in the related Pooling and Servicing Agreement.
Schedule of Mortgage Loans: Any of the Schedules of Mortgage Loans
required to be delivered pursuant to the related Pooling and Servicing
Agreement.
4
Second Mortgage Loan: A Mortgage Loan secured by a second priority
mortgage lien with respect to the related Property.
Senior Lien: With respect to any Second Mortgage Loan, the mortgage loan
relating to the corresponding Property having a first priority lien.
Servicer: EquiVantage Inc., a Delaware corporation, and its permitted
successors and assigns, or any other party, including the Sub-Servicer,
accepting the rights and obligations of Servicer in a Pooling and Servicing
Agreement.
Startup Day: Any startup date of a Pooling and Servicing Agreement.
Sub-Servicer: As defined in the related Pooling and Servicing Agreement.
Third Mortgage Loan: A Mortgage Loan secured by a third priority mortgage
lien with respect to the related Property
Trustee: Any party accepting the rights and obligations of Trustee in a
Pooling and Servicing Agreement.
Section 2. Interest Calculations. All calculations of interest
hereunder, including, without limitation, calculations of interest at the Coupon
Rate, which are made in respect of the Loan Balance of a Mortgage Loan shall be
made on a daily basis using a 360-day year.
Section 3. Transfers of Mortgage Loans. (a) From time to time in
connection with the establishment of EquiVantage Trusts, the Originator intends
to transfer to the Company, and the Company intends to accept the transfer from
the Originator of, Mortgage Loans. Each such transfer will be evidenced by a
Conveyance Agreement in substantially the form of Exhibit A hereto.
(b) In connection with each such transfer under this Agreement or in
connection with any prior transfer pursuant to another instrument of transfer
the Company will pay or will have paid to the Originator, in cash, its pro rata
portion of the consideration received by the Company for the Pool in connection
with the issuance of the Offered Certificates, together with the Originator's
pro rata portion of any subordinate certificates, unless otherwise agreed
between the Originator and the Company.
(c) In connection with each such transfer the Originator and the Company
will deliver to the Trustee the documents required by the related Pooling and
Servicing Agreement during the time periods required thereby. In the event of
any document deficiencies, the Originator and the Company shall take the actions
required by the related Pooling and Servicing Agreement during the time periods
required thereby. The Originator in addition hereby acknowledges that the
Trustee, the Servicer and the Certificate Insurer may enforce directly against
the Originator any
5
rights granted to any of them in the related Pooling and Servicing Agreement,
and the Originator and the Company agree to comply with their respective
duties and obligations set forth in such Pooling and Servicing Agreement.
Section 4. Representations, Warranties and Covenants Regarding the
Originator and the Company. (a) The Originator hereby represents and warrants
to the Company, the Trustee, the Certificate Insurer and their respective
successors and assigns that, as of the date hereof:
(i) The Originator is a corporation duly organized, validly existing and
in good standing under the laws governing its creation and existence
and is in good standing as a foreign corporation as applicable, in
each jurisdiction in which the nature of its business, or the
properties owned or leased by it make such qualification necessary.
The Originator has all requisite organizational power and authority
to own and operate its properties, to carry out its business as
presently conducted and as proposed to be conducted, to enter into
and discharge its obligations under this Agreement and the Conveyance
Agreements.
(ii) The execution and delivery of this Agreement by the Originator and
its performance and compliance with the terms of this Agreement and
the Conveyance Agreements to which it is a party have been duly
authorized by all necessary action on the part of the Originator and
will not violate the Originator's Articles of Incorporation or Bylaws
or constitute a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or result in a
breach of, any material contract, agreement or other instrument to
which the Originator is a party or by which the Originator is bound
or violate any statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having jurisdiction
over the Originator or any of its properties.
(iii) This Agreement and the Conveyance Agreements to which the Originator
is a party, assuming due authorization, execution and delivery by the
other parties hereto and thereto, each constitutes a valid, legal and
binding obligation of the Originator, enforceable against it in
accordance with the terms hereof, except as the enforcement thereof
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally and by general principles of equity (whether considered in
a proceeding or action in equity or at law).
(iv) The Originator is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Originator or its
properties or might have consequences that would materially and
adversely affect its performance hereunder and under the Conveyance
Agreements.
6
(v) Except as described in a related Pooling and Servicing Agreement and
as disclosed in any Prospectus, no litigation is pending or, to the
best of the Originator's knowledge, threatened against the
Originator which litigation is likely to have consequences that
would prohibit its entering into this Agreement or any Conveyance
Agreements or that is likely to materially and adversely affect the
condition (financial or otherwise) or operations of the Originator
or its properties or might have consequences that would materially
and adversely affect its performance hereunder and under the
Conveyance Agreements.
(vi) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Originator
contains any untrue statement of a material fact or omits to state
any material fact necessary to make the certificate, statement or
report not misleading.
(vii) Upon the receipt of each Mortgage Loan and other items of the
File, including the Note and Mortgage by the Trustee under this
Agreement, the related Trust will have good and indefeasible title
to such Mortgage Loan and such other items of the related Trust
Estate free and clear of any lien (other than liens which will be
simultaneously released).
(viii) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses
required to be taken, given or obtained, as the case may be, by or
from any federal, state or other governmental authority or agency
(other than any such actions, approvals, etc. under any state
securities laws, real estate syndication or "Blue Sky" statutes, as
to which the Originator makes no such representation or warranty)
that are necessary in connection with the sale of the Mortgage Loans
and the execution and delivery by the Originator of this Agreement
and the Conveyance Agreements to which it is a party, have been duly
taken, given or obtained, as the case may be, are in full force and
effect on the date hereof, are not subject to any pending
proceedings or appeals (administrative, judicial or otherwise),
either the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof may
be obtained or appeal therefrom taken and are adequate to authorize
the consummation of the transactions contemplated by this Agreement
and the Conveyance Agreements on the part of the Originator and
the performance by the Originator of its obligations under this
Agreement and the Conveyance Agreements.
(ix) The origination practices and the collection practices used by the
Originator with respect to the Mortgage Loans have been and are, in
all material respects, legal, proper, prudent and customary in the
mortgage loan lending business.
7
(x) The transactions contemplated by this Agreement are in the ordinary
course of business of the Originator.
(xi) The Originator will receive fair consideration and reasonably
equivalent value in exchange for the sale of the interests in the
Mortgage Loans.
(xii) The Originator will not transfer or sell any interest in any
Mortgage Loan with any intent to hinder, delay or defraud any of
its respective creditors.
(xiii) The Originator is solvent, and the Originator will not be rendered
insolvent as a result of the sale of the Mortgage Loans to the
related Trust.
(xiv) The statements contained in the Registration Statement that describe
the Originator or matters or activities for which the Originator is
responsible in accordance with the Operative Documents or which are
attributable to the Originator thereon are true and correct in all
material respects, and the Registration Statement does not contain
any untrue statement of a material fact with respect to the
Originator or omit to state a material fact required to be stated
therein or necessary in order to make the statements contained
therein with respect to the Originator not misleading.
(xv) The Originator will not, prior to the date that is one year and one
day after the final payment of any Certificates issued by the
EquiVantage Trust under the Pooling and Servicing Agreement,
institute against the Company, or join any other Person in
instituting against the Company, any bankruptcy, insolvency,
liquidation, readjustment of debt, marshaling of assets or similar
proceeding or acquiesce, petition or otherwise invoke or cause the
Company to invoke the process of any governmental authority for the
purpose of appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Company or
any substantial part of its property or ordering the winding up or
liquidation of the affairs of the Company.
It is understood and agreed that the representations and warranties set forth in
this paragraph (a) shall survive the sale and assignment by the Originator of
the Mortgage Loans to the Company and by the Company to the related EquiVantage
Trust.
(b) The Company hereby represents and warrants to the Originator, the
Certificate Insurer, the Trustee and the Owners that, as of the date hereof:
(i) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is in good
standing as a foreign corporation in each jurisdiction in which the
nature of its business, or the properties owned or leased by it make
such qualification necessary. The
8
Company has all requisite corporate power and authority to own and
operate its properties, to carry out its business as presently
conducted and as proposed to be conducted and to enter into and
discharge its obligations under this Agreement and the other
Operative Documents to which it is a party.
(ii) The execution and delivery of this Agreement, the related Conveyance
Agreement and the other Operative Documents to which the Company is
a party by the Company and its performance and compliance with the
terms of this Agreement, the related Conveyance Agreement and of
the other Operative Documents to which it is a party have been duly
authorized by all necessary corporate action on the part of the
Company and will not violate the Company's articles of
incorporation, bylaws or other organizational documents of the
Company or constitute a default (or an event which, with notice or
lapse of time, or both, would constitute a default) under, or result
in the breach of, any material contract, agreement or other
instrument to which the Company is a party or by which the Company
is bound, or violate any statute or any order, rule or regulation
of any court, governmental agency or body or other tribunal having
jurisdiction over the Company or any of its properties.
(iii) This Agreement, the related Conveyance Agreement and the other
Operative Documents to which the Company is a party, assuming due
authorization, execution and delivery by the other parties hereto
and thereto, each constitutes a valid, legal and binding
obligation of the Company, enforceable against it in accordance
with the terms hereof and thereof, except as the enforcement
hereof and thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles
of equity (whether considered in a proceeding or action in equity
or at law).
(iv) The Company is not in default with respect to any order or decree
of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which might have
consequences that would materially and adversely affect the
condition (financial or other) or operations of the Company or its
properties or might have consequences that would materially and
adversely affect its performance hereunder, under the related
Conveyance Agreement and under the other Operative Documents to
which it is a party.
(v) Except as described in the related Pooling and Servicing Agreement
and as disclosed in any Prospectus, no litigation is pending or, to
the best of the Company's knowledge, threatened against the Company
which litigation might have consequences that would prohibit its
entering into this Agreement, the related Conveyance Agreement or
any other Operative Document to which it is a party or that would
materially and adversely affect the condition (financial or
9
otherwise) or operations of the Company or its properties or might
have consequences that would materially and adversely affect its
performance hereunder, under the related Conveyance Agreement and
under the other Operative Documents to which it is a party.
(vi) No certificate of an officer, statement furnished in writing or
report delivered pursuant to the terms hereof by the Company
contains any untrue statement of a material fact or omits to state
any material fact necessary to make the certificate, statement or
report not misleading.
(vii) The statements contained in the Registration Statement which
describe the Company or matters or activities for which the Company
is responsible in accordance with the Operative Documents or which
are attributed to the Company therein are true and correct in all
material respects, and the Registration Statement does not contain
any untrue statement of a material fact with respect to the Company
or omit to state a material fact required to be stated therein or
necessary in order to make the statements contained therein with
respect to the Company not misleading. To the best of the Company's
knowledge and belief, the Registration Statement does not contain
any untrue statement of a material fact required to be stated
therein or omit to state any material fact required to be stated
therein or necessary to make the statements contained therein not
misleading.
(viii) All actions, approvals, consents, waivers, exemptions, variances,
franchises, orders, permits, authorizations, rights and licenses
required to be taken, given or obtained, as the case may be, by
or from any federal, state or other governmental authority or
agency (other than any such actions, approvals, etc. under any
state securities laws, real estate syndication or "Blue Sky"
statutes, as to which the Company makes no such representation or
warranty), that are necessary or advisable in connection with the
purchase and sale of the related EquiVantage Trust Certificates
and the execution and delivery by the Company of the Operative
Documents to which it is a party, have been duly taken, given or
obtained, as the case may be, are in full force and effect on the
date hereof, are not subject to any pending proceedings or
appeals (administrative, judicial or otherwise) and either the
time within which any appeal therefrom may be taken or review
thereof may be obtained has expired or no review thereof may be
obtained or appeal therefrom taken, and are adequate to authorize
the consummation of the transactions contemplated by this
Agreement, the related Conveyance Agreement and the other
Operative Documents on the part of the Company and the
performance by the Company of its obligations under this
Agreement, the related Conveyance Agreement and under such of the
other Operative Documents to which it is a party.
10
(ix) The transactions contemplated by this Agreement are in the ordinary
course of business of the Company.
(x) The Company is receiving fair consideration and reasonably
equivalent value in exchange for the sale of the interests in the
Mortgage Loans evidenced by the related EquiVantage Trust
Certificates.
(xi) The Company is not selling any interest in any Mortgage Loan
evidenced by the related EquiVantage Trust Certificates with any
intent to hinder, delay or defraud any of its respective creditors.
(xii) The Company is solvent and the Company will not be rendered
insolvent as a result of the sale of the Mortgage Loans to the
Trust or the sale of the related EquiVantage Trust Certificates.
The representations and warranties set forth in this paragraph (b) shall survive
the sale and assignment of the Mortgage Loans to the Company and the sale and
assignment of the Mortgage Loans by the Company to the related EquiVantage
Trust. Upon discovery of a breach of any of the foregoing representations and
warranties which materially and adversely affects the interests of the
Originator, the party discovering such breach shall give prompt written notice
to the other. Within 30 days of its receipt of notice of breach, the Company
shall cure such breach in all material respects.
Section 5. Representations and Warranties of the Originator Regarding
the Mortgage Loans. (a) Set forth in paragraph (b) below, are listings of
representations and warranties which are hereby made by the Originator to the
Company in connection with each purchase of a Pool with respect to the related
Mortgage Loans in such Pool as of the related Cut-Off Date. In addition, with
respect to the Mortgage Loans in the related Pool, a Conveyance Agreement may
delete or modify any of such representations and warranties or may add
additional representations and warranties (the Company may also modify, add or
delete any such representations and warranties in the related Pooling and
Servicing Agreement) (collectively, any such modified or additional
representations and warranties, the "Additional Representations and
Warranties"); provided, however, that all such deletions, additions or
modifications shall have been approved by the Certificate Insurer. The
representations and warranties listed in paragraphs (a) and (b), together with
any Additional Representations and Warranties, constitute the representations
and warranties under this Section 5. The parties hereto agree that the
representations and warranties are incorporated by reference into the related
Pooling and Servicing Agreement and that the Trustee and the Certificate Insurer
may pursue all of the Company's rights and remedies hereunder with respect to
any breach of a representation and warranty in the same manner as if the
Trustee, or the Certificate Insurer, as the case may be, were a party to this
Agreement.
11
(b) With respect to each Mortgage Loan as of the related Cut-Off Date, the
Originator hereby represents, warrants and covenants to the Company, the
Certificate Insurer, Servicer and the Trustee as follows; the Originator
acknowledges that the Trustee will be relying on such representations,
warranties and covenants in accepting the Mortgage Loans from the Company and
that the Certificate Insurer will be relying thereon in issuing the Certificate
Insurance Policy:
(i) Such Mortgage Loan was originated or acquired by the Originator and
as of the Startup Day the related Mortgage creates a valid lien on
the related Property securing the amount owed by the Mortgagor
under the related Note subject only to (w) the lien of current real
property taxes and assessments, (x) the lien of any related Senior
Lien (as to any Mortgage Loan that is not secured by a first
priority lien), (y) covenants, conditions and restrictions, rights
of way, easements and other matters of public record as of the date
of recording of such Mortgage, such exceptions appearing of record
being acceptable to mortgage lending institutions generally in the
area wherein the related Property is located or specifically
reflected in the appraisal or title policy obtained in connection
with the origination of the related Mortgage Loan by the Company and
the Originator and (z) other matters to which like properties are
commonly subject which do not materially interfere with the benefits
of the security intended to be provided by such Mortgage.
(ii) No Property consists solely of raw land, an apartment building
having more than four units or a cooperative apartment. Each
Primary Parcel is improved by one or more single (one-to-four)
family residential dwellings, which may include condominiums,
townhouses and manufactured homes.
(iii) Immediately prior to the sale, transfer, assignment and
conveyance by the Originator to the Company, the Originator had
good title to such Mortgage Loan, free of any interest of any
other Person, and the Originator has sold, transferred, assigned
and conveyed all of its right, title and interest in and to such
Mortgage Loan to the Company.
(iv) The Originator and, with respect to any Mortgage Loan purchased by
the Originator, the seller of such Mortgage Loan to the Originator,
was properly licensed or otherwise authorized, to the extent
required by applicable law including, without limitation, any "doing
business" laws, to originate or acquire such Mortgage Loan. Such
Mortgage Loan at the time it was made complied or, if the Mortgage
Loan was acquired and not originated by the Originator, to the best
of the Originator's knowledge, such Mortgage Loan either
(y) complied in all material respects with applicable state and
federal laws and regulations, including, without limitation, the
federal Truth-in-Lending Act, the Real Estate Settlement Procedures
Act and other federal, state and local consumer protection, usury,
equal credit opportunity,
12
disclosure and recording laws or (z) any such lack of compliance
under clause (y) has been cured such that all such Mortgage Loans
acquired and not originated by the Originator are materially in
compliance pursuant to clause (y). The consummation of the
transactions herein contemplated, including, without limitation,
the sale of the Mortgage Loans to the related EquiVantage Trust,
will not violate any such state or federal law or regulation.
(v) The Originator has not received a notice of default on any Senior
Lien secured by the related Property which has not been cured by a
party other than the Originator.
(vi) Except as provided in the related Conveyance Agreement, none of
the Mortgage Loans are subject to Section 32 of the Federal
Truth-in-Lending Act.
(vii) As of its date of origination, no Mortgage Loan had a Combined
Loan-to-Value Ratio in excess of the level specified in the
related Conveyance Agreement.
(viii) No Senior Lien or any Mortgage Loan secured by the related
Property provides for negative amortization of the principal
balance thereof.
(ix) 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 as against creditors of the Originator and
any other originator or as against creditors of the Originator's
predecessors in title, except as otherwise provided for in the
related Pooling and Servicing Agreement.
(x) The related Note is not and has not been secured by any collateral,
pledged account or other security except the lien of the related
Mortgage. Each Senior Lien, if any, on a Property permits the
granting of a junior lien similar to the related Mortgage Loan
without consent, or, if consent is required, it has been obtained
and is contained in the related File.
(xi) As of the related Cut-Off Date, to the best knowledge of the
Originator, the Property subject to the related Mortgage is free of
material damage and is in good repair, except for deferred
maintenance for which sufficient funds have been escrowed.
13
(xii) The sale, transfer, assignment and conveyance of each Mortgage
Loan by the Originator to the Company is not subject to the bulk
transfer laws or any similar statutory provisions in effect in
any applicable jurisdiction.
(xiii) Each Mortgage Loan is being serviced by the Servicer or a
Sub-Servicer in accordance with the Servicer's standard servicing
procedures.
(xiv) Each Mortgage Loan is a mortgage loan principally secured by an
interest in real property for purposes of the REMIC provisions of
the Code and is secured by a first or second priority Mortgage.
(xv) The credit underwriting guidelines applicable to the origination of
each Mortgage Loan conformed in all material respects to the
description thereof set forth in the Prospectus relating to the
Offered Certificates. None of the Mortgage Loans were selected from
among the Originator's or any other originator's assets in a manner
which would cause them to be adversely selected as to credit risk
from the pool of mortgage loans owned by the Originator.
(xvi) As of the Startup Day, to the best of the Originator's knowledge,
there is no valid and enforceable offset, defense, right of
rescission, set-off or counterclaim to any Note or Mortgage,
including the defense of usury, or the obligation of the related
Mortgagor to pay the unpaid principal of or interest on such
Note.
(xvii) If any material improvement to the 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 in a form meeting the requirements of the
current guidelines of the Federal Insurance Administration is in
effect with respect to such material improvement located on such
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
(together, in the case of a Mortgage Loan that is not a first
priority lien, with the outstanding principal balance of any
liens that are prior to the related Mortgage Loan lien), (B) the
minimum amount required to compensate for damage or loss to such
improvement on a replacement cost basis or (C) the maximum amount
of insurance that is available under the Flood Disaster
Protection Act of 1973.
(xviii) Each Mortgage Loan contains a provision for the acceleration of
the payment of the unpaid principal balance of the related
Mortgage Loan in the event the related Property is sold without
the prior consent of the holder of the Mortgage, subject to
limitations under applicable law.
14
(xix) Except as otherwise set forth on the related Schedule of Mortgage
Loans, 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, from his or her obligations
thereunder, except (A) with respect to release of excess acreage,
(B) where necessary to create a utility easement, (C) release of
portions of land, none of which materially adversely affects the
value of the relevant Property or which causes the resulting
Combined Loan-to-Value Ratio to be outside of the underwriting
guidelines or (D) in a manner consistent with the Originator's or
Servicer's ordinary practice.
(xx) Each Mortgage Loan conforms, and all such Mortgage Loans in the
aggregate conform, in all material respects to the description
thereof set forth in the related Prospectus.
(xxi) The information with respect to each Mortgage Loan set forth in
the Schedules of Mortgage Loans is true and correct as of the
Cut-Off Date.
(xxii) All of the original or certified documentation set forth in the
related 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 on the Startup Day or as
otherwise provided in the related Pooling and Servicing
Agreement.
(xxiii) Each Mortgage Loan being transferred to the Trust is secured by a
Mortgage that is a Qualified Mortgage and each Note is in a form
that is acceptable to prudent mortgage lenders which make
mortgage loans comparable to the Mortgage Loans.
(xxiv) Each Mortgage is a valid and subsisting first or second (as shown
in the related Schedule of Mortgage Loans) lien of record on the
Primary Parcel of the related Property subject in all cases to
the exceptions to title set forth in the title Insurance Policy
or title opinion with respect to the related Mortgage Loan, which
are 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.
(xxv) Prior to the sale to the Company of Mortgage Loans by the
Originator, the Originator held good and indefeasible title to,
and was the sole owner of, each Mortgage Loan subject to no
liens, charges, mortgages, encumbrances or rights of others
except as set forth in clauses (viii), (xi) and (xiii) above or
other liens which will be released simultaneously with such
transfer and assignment.
15
(xxvi) There is no delinquent tax, ground rent, water charge, sewer
rent, insurance premium, leasehold payment or delinquent
assessment lien, mechanics' lien or claim for work, labor or
material affecting any Property which is or may have a priority
over, be a lien prior to, or equal with, the lien of the related
Mortgage, except those liens for which funds sufficient to
discharge such liens are held in escrow by the Servicer or by an
escrow agent, or which are insured against by the title Insurance
Policy.
(xxvii) With respect to each Mortgage Loan, either (A) lender's title
Insurance Policy (or commitment therefor), issued in standard or
American Land Title Association form (with modifications, if any,
approved by the state in which the related Property is located)
by a title insurance company authorized to transact business in
the state in which the related Property is situated, in an amount
at least equal to the Original Principal Amount of such Mortgage
Loan insuring the mortgagee's interest under the related Mortgage
Loan as the holder of a valid first or second mortgage lien of
record on the real property described in the related Mortgage,
subject only to a survey exception and other exceptions of the
character referred to in clauses (xxiv), (xxv) and (xxvi) above
and (xliv) below, was effective on the date of the origination of
such Mortgage Loan, and, as of the Closing Date, such policy will
be valid and thereafter such policy shall continue in full force
and effect, (B) in those jurisdictions in which it is customary
to obtain opinions of counsel as to title matters rather than
title insurance, an opinion of counsel as to the mortgagee's
interest under the related Mortgage Loan as the holder of a valid
first or second mortgage lien of record on the real property
described in the related Mortgage, was obtained in connection
with the date or origination of such Mortgage Loan.
(xxviii) The material improvements upon each Property are covered by a
valid and existing hazard Insurance Policy with a carrier
licensed in the state in which the Property is located 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, in the case of a Second Mortgage
Loan, the outstanding principal balance of the related Senior
Lien, (B) the minimum amount required to compensate for loss or
damage on a replacement cost basis or (C) the full insurable
value of the material improvements to the Property, but in any
event in an amount not less than such amount as is necessary to
avoid the application of any co-insurance clause contained in the
related Insurance Policy. All individual Insurance Policies are
the valid and binding obligation of the insurer and contain a
standard mortgagee clause naming the Servicer on behalf of the
Originator, its successors and assigns, as mortgagee. All
premiums then due thereon have been paid. The Mortgage
16
obligates the Mortgagor thereunder to maintain all such insurance
at the Mortgagor's cost and expense.
(xxix) Each Mortgage and Note is genuine and constitutes 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 to the best of the Originator's
knowledge all parties to each Mortgage Loan had full legal
capacity to execute all documents relating to such Mortgage Loan
and to convey the estate therein purported to be conveyed and
each Mortgage and Note have been duly and properly executed by
such parties.
(xxx) The Originator has caused and will cause to be performed any and
all acts required to be performed to preserve the rights and
remedies of the Trustee in any Insurance Policies applicable to
any of the Mortgage Loans delivered by the Originator to the
Trustee including, without limitation, any necessary
notifications of insurers, assignments of policies or interest
therein, and establishments of co-insured, joint loss payee and
mortgagee rights in favor of the Trustee.
(xxxi) The terms of each 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 Trustee, as assignee of the Company, and which
has been delivered to the Trustee. The substance of any such
alteration or modification made prior to the Cut-Off Date
is reflected on the related Schedule of Mortgage Loans; and any
subsequent alteration or modification prior to the date hereof
has been made only as permitted by the related Pooling and
Servicing Agreement.
(xxxii) The proceeds of each Mortgage Loan have been fully disbursed to
the Mortgagor or into an escrow account (i) for completion of any
improvements to the related Property or (ii) to establish as an
escrow fund for payment of taxes and insurance related to the
Property. Each Mortgage Loan is a closed-end Mortgage Loan, and
there is no obligation on the part of the Servicer, the
Originator or the Originator's assignees to make future advances
thereunder at the option of the Mortgagor. All costs, fees and
expenses incurred in making, closing or recording such Mortgage
Loans have been paid or will be paid from escrowed funds.
(xxxiii) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature.
17
(xxxiv) As of the Cut-Off Date, the percentage of Mortgage Loans stated
in the related Conveyance Agreement were originated pursuant to a
"no-income verification" program.
(xxxv) 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 as reflected on the
Schedule of Mortgage Loans. The consolidated principal amount
does not exceed the Original Principal Amount of the related
Mortgage Loan.
(xxxvi) To the best of the Company's knowledge, there is no proceeding
pending or hreatened for the total or partial condemnation
of any Property, nor is such a proceeding currently occurring,
and each Property is undamaged by waste, fire, earthquake, earth
movement, windstorm (including a hurricane), flood, tornado or
other casualty, except for damage materially covered by policies
of insurance as described in clause (xxviii) above and identified
in Schedule I attached hereto.
(xxxvii) To the best of the Company's knowledge, all of the improvements
which were included for the purposes of determining the Appraised
Value of each Property lie wholly within the boundaries and
building restriction lines of such Property, and no improvements
on adjoining properties encroach upon such Property, except for
minor encroachments and protrusions which do not materially
affect the Appraised Value of the Property.
(xxxviii) To the best of the Company's knowledge, no improvement located on
or being part of any Property is in material violation of any
applicable zoning law or regulation. To the best of Originator's
knowledge, all inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of each
Property and, with respect to the use and occupancy of the same,
have been made or obtained from the appropriate authorities.
(xxxix) 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 Company to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the
related Mortgagor.
(xl) Each Mortgage contains customary and enforceable provisions which
render the rights and remedies of the holder thereof adequate
for the realization
18
against the related 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
to the related Mortgagor which would materially interfere with
the right to sell the related Property at a trustee's sale or
the right to foreclose the related Mortgage.
(xli) To the best of the Originator's knowledge except as disclosed on
the Schedules of Mortgage Loans, there is no default, breach,
violation or event of acceleration existing as of the Cut-Off
Date under any Mortgage or the related 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 Servicer nor
the Originator has waived any default, breach, violation or event
of acceleration which would, but for such waiver, exist on the
Cut-Off Date; except that the Servicer or the Originator may have
heretofore waived late payments or granted extensions of payments
(none of which extensions are material).
(xlii) An appraisal, completed by independent fee appraisers, was
performed with respect to each Mortgage Loan and is contained in
the File, and no appraisal was based solely on a cost approach
analysis.
(xliii) With respect to each Mortgaged Property subject to a ground lease
(i) the current ground lessor has been identified and all ground
rents which previously become due and owing have been paid; (ii)
the ground lease term extends, or is automatically renewable, for
a least five years beyond the maturity date of the related
Mortgage Loan; (iii) the ground lease has been duly executed;
(iv) the amount of the ground rent and any increases therein are
clearly identified in the lease and are for predetermined amounts
at predetermined times; (v) the Trust has the right to cure
defaults on the ground lease; and (vi) the terms and conditions
of the leasehold do not prevent the free and absolute
marketability of the Mortgaged Property. As of the Cut-Off Date,
the Principal Balance of Mortgage Loans with related Mortgaged
Properties subject to ground leases does not exceed the
percentage of the Original Principal Balance stated in the
related Conveyance Agreement.
(xliv) As of the Cut-Off Date, no more than the percentage of the
Original Aggregate Loan Balance stated in the related Conveyance
Agreement is secured by investor-owned Properties.
(xlv) The Originator has no actual knowledge that there exist on any
Property, any hazardous substances, hazardous wastes or solid
wastes, as such terms are defined in the Comprehensive
Environmental Response Compensation
19
and Liability Act, the Resource Conservation and Recovery Act
of 1976, or other federal, state or local environmental
legislation. For purposes of this clause, actual knowledge of
the Originator means actual knowledge of an officer of the
Originator involved in the servicing of the relevant Mortgage
Loan. Actual knowledge of the Originator does not include
knowledge imputable by virtue of the availability of or
accessibility to information relating to environmental or
hazardous waste sites or the locations thereof.
(xlvi) To the best of the Originator's knowledge, except for payments in
the nature of escrow payments, including, without limitation,
taxes and insurance payments, or payments for protection and
preservation of the Property; including the cost of legal
proceedings against the Property, the Servicer has not advanced
funds directly or indirectly, for the payment of any amount
required by the Mortgage.
(xlvii) Any Mortgage Loan in which the related Mortgagor is subject to a
bankruptcy proceeding filed after the Mortgage Loan was
originated is current under the terms of the bankruptcy payment
plan.
(xlviii) Each Mortgage Loan bears a fixed rate of interest (except that,
with respect to Program Loans bearing a fixed rate of interest,
the related Mortgage Rate may be reduced by as much as 1.50% in
accordance with the terms of the related Note), except for the
number of Mortgage Loans bearing rates of interest that adjust at
periodic intervals, if any, stated in the related Conveyance
Agreement.
(xlix) With respect to each Mortgage Loan which is or has been the
subject of bankruptcy or insolvency proceedings, (a) as of the
Cut-Off Date, the Mortgagor is not contractually Delinquent more
than 30 days with respect to any payment due under the related
plan, (b) the current Combined Loan-to-Value Ratio is less than
or equal to 85%, and (c) either (i) if the current Combined
Loan-to-Value Ratio is between 70% and 85% as of the Cut-Off
Date, the Mortgagor has made at least six consecutive payments
under the related Plan or (ii) if the current Combined
Loan-to-Value Ratio is less than 70% as of the Cut-Off Date, the
Mortgagor has made at least three consecutive payments under the
related plan.
(l) To the best knowledge of the Originator, the proceeds of any
Mortgage Loan made to a Mortgagor in bankruptcy at the time of
origination of such Mortgage Loan were applied in a manner
consistent with the related bankruptcy plan.
20
(li) The maturity date of each Mortgage Loan that is a junior lien
loan is at least twelve months prior to the maturity date of the
related first mortgage loan if such related first mortgage loan
provides for a balloon payment.
(lii) The Mortgagor has not notified the Originator of and the
Originator has no knowledge of any relief requested or allowed to
the Mortgagor under the Soldiers and Sailors Civil Relief Act of
1940.
(liii) (a) To the best of the Originator's knowledge, no action, error,
omission, misrepresentation, negligence, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the
part of any person, including without limitation the Mortgagor,
any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan or in the
application of any insurance in relation to such Mortgage Loan,
that would have a material adverse effect on the Mortgage Loan,
except in the case of a Mortgage Loan with respect to which
information contained in an appraisal, Mortgagor income
verification report or other document related to the origination
of the Mortgage Loan has been determined to be incorrect or
incomplete and such information has been corrected or completed
as of the related Cut-Off Date, and (b) the Originator has no
knowledge of any action that has been taken or failed to have
been taken, or of any event that has occurred, or state of facts
that exists or has existed on or prior to the related Cut-Off
Date (whether or not known to the Originator on or prior to such
date) which occurrence described in clause (a) and clause (b) of
this subsection (liii) has resulted or will result in an
exclusion from, denial of, or defense to coverage under any
primary Insurance Policy or pool policy certification (including,
without limitation, any exclusions, denials or defenses which
would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the
insured) whether arising out of actions, representations, errors,
omissions, negligence, or fraud of a seller, the Originator, the
related Mortgagor or any party involved in the application for
such coverage, including the appraisal, plans and specifications
and other exhibits or documents submitted therewith to the
insurer under such Insurance Policy, or for any other reason
under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such
Insurance Policy or such insurer's financial inability to pay.
(liv) The Originator has no knowledge of any circumstance or condition
with respect to the Property, Mortgagor or the Mortgagor's credit
standing that can reasonably be expected to materially adversely
affect the value of the Mortgage Loan.
21
The representations and warranties of this paragraph (b) shall survive the
transfer and assignment of the Mortgage Loans to the Company. The
representations and warranties of this paragraph (b) shall survive the transfer
and assignment of the Mortgage Loans by the Company to EquiVantage Trusts. Upon
discovery by the Company of a breach of any of the representations and
warranties of this paragraph (b), without regard to any limitation set forth in
such representation or warranty concerning the knowledge of the Originator or
the Company as to the facts stated therein, which breach, in the opinion of the
Company, the Certificate Insurer or the Trustee, materially and adversely
affects the interests of the Company, the Owners or of the Certificate Insurer
in the related Mortgage Loan or Mortgage Loans, the party discovering such
breach shall give prompt written notice to the other parties, and the Originator
shall be required to take the remedial actions required by the related Pooling
and Servicing Agreement within the time periods required thereto, which in no
case shall be less than 30 days.
The Originator acknowledges that a breach of any representation or warranty
relating to (x) title sufficient to transfer indefeasible title to a Mortgage
Loan or (y) enforceability of the Mortgage Loan against the related Mortgagor or
Property constitutes breach of a representation or warranty of this Section 5
which "materially and adversely affects the interests of the Owners or of the
Certificate Insurer" in such Mortgage Loan. For purposes of this Agreement the
representations and warranties made in this Section 5 limited to the
Originator's knowledge shall be limited to the actual knowledge of the officers
executing this Agreement.
Section 6. Covenants of the Originator to Take Certain Actions with
Respect to the Mortgage Loans in Certain Situations. (a) Upon the earliest to
occur of the Originator's discovery, its receipt of notice of breach from any
one of the other parties to the related Pooling and Servicing Agreement or from
the Certificate Insurer or such time as a breach of any representation and
warranty in Section 5 hereof materially and adversely affects the interests of
the Owners or of the Certificate Insurer as set forth above, the Originator
hereby covenants and warrants that it shall promptly cure such breach in all
material respects or it shall, subject to the further requirements of this
paragraph, on the second Remittance Date next succeeding such discovery, receipt
of notice or such other time (i) substitute in lieu of each Mortgage Loan which
has given rise to the requirement for action by the Originator a Qualified
Replacement Mortgage and deliver to the Servicer for deposit in the Principal
and Interest Account the Substitution Amount applicable thereto, together with
the aggregate amount of all Delinquency Advances and Servicing Advances
theretofore made with respect to such Mortgage Loan, to the Servicer for deposit
in the Principal and Interest Account or (ii) purchase such Mortgage Loan from
the Trust at a purchase price equal to the Loan Purchase Price thereof, which
purchase price shall be delivered to the Servicer for deposit in the Principal
and Interest Account. In connection with any such proposed purchase or
substitution, the Originator at its expense, shall cause to be delivered to the
Trustee and to the Certificate Insurer an opinion of counsel experienced in
federal income tax matters stating whether or not such a proposed purchase or
substitution would constitute a Prohibited Transaction for the Trust or would
jeopardize the status of the Trust as a REMIC, and the Originator shall only be
required to take either such action to the extent such action would not
constitute a Prohibited Transaction for the Trust or would not jeopardize the
22
status of the Trust as a REMIC. Any required purchase or substitution, if
delayed by the absence of such opinion shall nonetheless occur upon the earlier
of (i) the occurrence of a default or imminent default with respect to the
Mortgage Loan or (ii) the delivery of such opinion. The obligation of the
Originator to cure the defect, or substitute for, or purchase any Mortgage Loan
as to which a representation or warranty is untrue in any material respect and
has not been remedied shall constitute the sole remedy against the Originator
with respect to such breach available to the Owners, the Trustee or the
Certificate Insurer.
(b) In the event that any Qualified Replacement Mortgage is delivered by
the Originator, the Originator shall be obligated to take the actions described
in this Section 6 with respect to such Qualified Replacement Mortgage upon the
discovery by any of the Owners, the Company, the Servicer, the Certificate
Insurer, or the Trustee that the representations and warranties set forth in
Section 5 hereof are untrue with respect to such Qualified Replacement Mortgage
in any material respect on the date such Qualified Replacement Mortgage is
conveyed to the related EquiVantage Trust such that the interests of the Owners
or the Certificate Insurer in the related Qualified Replacement Mortgage are
materially and adversely affected; provided, however, that for the purposes of
this paragraph (b) the representations and warranties in Section 5 hereof
referring to items "as of the Cut-Off Date" or "as of the Startup Day" shall be
deemed to refer to such items as of the date such Qualified Replacement Mortgage
is conveyed to the related EquiVantage Trust.
(c) The covenants set forth in this Section 6 shall survive delivery of
the respective Mortgage Loans (including Qualified Replacement Mortgage Loans)
to the Trustee.
Section 7. Term of Agreement. This Agreement shall terminate upon (i)
the final payment or other liquidation of the last Mortgage Loan required
pursuant to this Agreement or included in an EquiVantage Trust under this
Agreement or (ii) the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan.
Section 8. Authorized Representatives. The names of the officers of
the Originator and of the Company 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 Originator and of the Company
("Authorized Representatives") are set forth in Exhibit B, along with the
specimen signature of each such officer. From time to time, the Originator and
the Company may, by delivering to the Trustee and the Certificate Insurer a
revised exhibit, change the information previously given, but the Trustee shall
be entitled to rely conclusively on the last exhibit until receipt of a
superseding exhibit.
Section 9. Notices. All demands, notices and communications relating
to this Agreement shall be in writing and shall be deemed to have been duly
given 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
23
be deemed to have been received on the date delivered to or received at the
premises of the addressee.
If to the Company:
EquiVantage Acceptance Corp.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
EquiVantage Acceptance Corp.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Originator:
EquiVantage Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
EquiVantage Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
24
If to the Trustee:
Norwest Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Servicer
Asset-Backed Administration
Re: EquiVantage Home Equity Loan Trust 1997-2
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Certificate Insurer:
Financial Guaranty Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Surveillance Department
Re: EquiVantage Acceptance Corp. Home Equity Loan Trust 1997-2
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Section 10. 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 rules applied in the State of New York.
Section 11. 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.
Section 12. 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.
Section 13. Amendment. This Agreement may be amended from time to time
by the Originator and the Company only by a written instrument executed by such
parties and with the prior written consent of the Certificate Insurer.
Section 14. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
25
Section 15. No Agency; No Partnership or Joint Venture. Neither the
Originator nor the Company is the agent or representative of the other (except
with respect to Mortgage Loans originated or acquired by the Company in its
capacity as Originator), and nothing in this Agreement shall be construed to
make either the Originator or the Company liable to any third party for services
performed by it or for debts or claims accruing to it against the other party.
Nothing contained herein nor the acts of the parties hereto shall be construed
to create a partnership or joint venture between the Company and the Originator.
Section 16. Further Assurances. The Originator and Company agree to
cooperate reasonably and in good faith with one another in the performance of
this Agreement.
Section 17. The Certificate Insurer and the Trustee. The Certificate
Insurer and the Trustee are third-party beneficiaries of this Agreement. The
Trustee and the Certificate Insurer shall have the right to enforce the
representations and warranties set forth in this Agreement through the Company
or directly. Any right conferred to the Certificate Insurer shall be suspended
during any period in which the Certificate Insurer is in default in its payment
obligations under the Certificate Insurance Policy. During any period of
suspension, the Certificate Insurer's rights hereunder shall vest in the Owners
of the related Offered Certificates and shall be exercisable by the Owners of at
least a majority in Percentage Interest of the related Offered Certificates then
Outstanding. At such time as the related Offered Certificates are no longer
Outstanding under the related Pooling and Servicing Agreement and the
Certificate Insurer has been reimbursed for all Insured Payments to which it is
entitled under the related Pooling and Servicing Agreement, the Certificate
Insurer's rights hereunder shall terminate.
26
IN WITNESS WHEREOF, the Company and the Originator have caused this Master
Transfer Agreement to be duly executed by their respective officers, all as of
the day and year first above written.
EQUIVANTAGE ACCEPTANCE CORP.,
the Company
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
EQUIVANTAGE INC.
the Originator
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Exhibit A
FORM OF CONVEYANCE AGREEMENT
THIS CONVEYANCE AGREEMENT, dated ______, 199_, is between EquiVantage
Acceptance Corp. (the "Company") and EquiVantage Inc. (the "Originator").
Pursuant to the Master Loan Transfer Agreement dated as of June __, 1997 between
the Company and the Originator (the "Mortgage Transfer Agreement"), the parties
hereto hereby confirm their understanding with respect to the sale by the
Originator and the purchase by the Company of those Mortgage Loans listed on the
Schedule of Mortgage Loans attached hereto (the "Transferred Mortgage Loans").
Conveyance of Transferred Mortgage Loans. The Originator, concurrently
with the execution and delivery of this Conveyance Agreement, does hereby
irrevocably transfer, sell, assign, set over and otherwise convey to the
Company, without recourse (except as otherwise explicitly provided for herein)
all of its right, title and interest in and to the Transferred Mortgage Loans
being conveyed by it, including specifically, without limitation, the Mortgages,
the Files and all other documents, materials and properties appurtenant thereto
and the Notes, including all interest and principal received by the Originator
on or with respect to such Transferred Mortgage Loans on or after the related
Cut-Off Date, together with all of its right, title and interest in and to the
proceeds received on or after the related Cut-Off Date of any related insurance
policies on behalf of the Company. It is the intention of the parties hereto
that the conveyance by the Originator of the Transferred Mortgage Loans to the
Company shall constitute a purchase and sale of such Transferred Mortgage Loans
and not a loan. If the Originator cannot deliver the original Mortgage or
mortgage assignment with evidence of recording thereon concurrently with the
execution and delivery of this Conveyance Agreement solely because of a delay
caused by the public recording office where such original Mortgage or mortgage
assignment has been delivered for recordation, the Originator shall promptly
deliver to the Trustee on behalf of the Company such original Mortgage or
mortgage assignment with evidence of recording indicated thereon upon receipt
thereof from the public recording official, as soon as possible but in no event
later than 12 months from the Startup Day.
The costs relating to the delivery of the documents specified in this
Conveyance Agreement shall be borne by the Originator.
The Originator hereby makes the representations and warranties set forth in
Section 5(a) of the Master Transfer Agreement with respect to the Transferred
Mortgage Loans. The "Cut-Off Date" with respect to such Transferred Mortgage
Loans shall be the close of business on [INSERT DATE] or, if any Transferred
Mortgage Loan was originated subsequent to [INSERT DATE], but prior to the
Startup Day, the date of origination of such Transferred Mortgage Loan.
A-1
Except as set forth immediately below, all terms and conditions of the
Mortgage Transfer Agreement are hereby incorporated herein; provided that, in
the event of any conflict, the provisions of this Conveyance Agreement shall
control over the conflicting provisions of the Mortgage Transfer Agreement.
(i) With respect to each Transferred Mortgage Loan involving property
improved by a manufactured home, such manufactured home constitutes
real property under applicable state law and the Originator has
taken all action necessary to create a valid and perfected first
or second priority lien and security interest in such manufactured
home and the related Property, including, without limitation, the
filing of a Uniform Commercial Code financing statement or notations
on certificates of title, if necessary under applicable state law.
(ii) As of its date of origination, no Transferred Mortgage Loan had a
Combined Loan-to-Value Ratio in excess of [INSERT PERCENTAGE].
(iii) No Transferred Mortgage Loan is a Third Mortgage Loan.
(iv) No more than [INSERT PERCENTAGE] of the Transferred Mortgage Loans
were originated under any "no-income verification" program.
(v) The Note related to each Transferred Mortgage Loan bears a minimum
Coupon Rate of at least [INSERT PERCENTAGE] per annum.
(vi) Each Note for a fixed rate Transferred Mortgage Loan that is not a
Balloon Loan provides for a schedule of substantially level and
equal monthly scheduled payments which are sufficient to amortize
fully the principal balance of such Note on or before its maturity
date, which maturity date is not more than [INSERT NUMBER] years
from the date of origination of such Transferred Mortgage Loan.
Each Balloon Loan has an original term to stated maturity of not
more than [INSERT NUMBER] years and an amortization schedule based
on not more than [INSERT NUMBER] years.
(vii) No more than [INSERT PERCENTAGE] of the Transferred Mortgage
oans is more than 30 days Delinquent (assuming a 30-day month).
(viii) No Transferred Mortgage Loan had a Loan Balance less than [INSERT
DOLLAR AMOUNT] as of the Cut-Off Date or greater than [INSERT
DOLLAR AMOUNT] as of the Cut-Off Date.
(ix) The Primary Parcel of each Property is located in the state
identified in the Schedule of Mortgage Loans attached hereto; no
more than [INSERT PERCENTAGE] of the aggregate Loan Balance as of
the Cut-Off Date is
A-2
secured by mortgaged Properties located within any single postal
zip code area; and each Property consists of one or more parcels
of real property with a residential dwelling erected on the
Primary Parcel.
(x) As of the Cut-Off Date, no more than [INSERT PERCENTAGE] of the
aggregate Loan Balance is secured by condominiums; no Transferred
Mortgage Loan relates to a cooperative.
(xi) With respect to each Mortgaged Property subject to a ground lease
(i) the current ground lessor has been identified and all ground
rents that previously become due and owing have been paid; (ii)
the ground lease term extends, or is automatically renewable, for
at least five years beyond the maturity date of the related
Transferred Mortgage Loan; (iii) the ground lease has been duly
executed and recorded; (iv) the amount of the ground rent and any
increases therein are clearly identified in the lease and are for
predetermined amounts at predetermined times; (v) the Trust has
the right to cure defaults on the ground lease; and (vi) the
terms and conditions of the leasehold do not prevent the free and
absolute marketability of the Mortgaged Property. As of the
Cut-Off Date, the Principal Balance of Transferred Mortgage Loans
with related Mortgaged Properties subject to ground leases does
not exceed [INSERT PERCENTAGE] of the Original Principal Balance.
(xii) As of the Cut-Off Date, no more than [INSERT PERCENTAGE] of the
Original Aggregate Loan Balance is secured by investor-owned
Properties.
(xiii) With respect to each Transferred Mortgage Loan which is or has
been the subject of bankruptcy or insolvency proceedings, (a) as
of the Cut-Off Date, the Mortgagor is not contractually
delinquent more than 30 days with respect to any payment due
under the related plan, (b) the current Combined Loan-to-Value
Ratio is less than or equal to [INSERT PERCENTAGE], and (c)
either (i) if the current Combined Loan-to-Value Ratio is between
[INSERT PERCENTAGE] and [INSERT PERCENTAGE] as of the Cut-Off
Date, the Mortgagor has made at least six consecutive payments
under the related Plan or (ii) if the current Combined
Loan-to-Value Ratio is less than [INSERT PERCENTAGE] as of the
Cut-Off Date, the Mortgagor has made at least three consecutive
payments under the related plan.
(xiv) Not more than [INSERT PERCENTAGE] of the Transferred Mortgage
Loans are subject to Section 32 of the federal Truth-in-Lending
Act.
(xv) As of the Cut-Off Date, [INSERT PERCENTAGE] of the outstanding
principal balance of the Transferred Mortgage Loans are fixed rate
mortgage loans (except [INSERT PERCENTAGE] thereof that, as
Program Loans, bear
A-3
fixed rates of interest that under the terms of the related
Mortgage Notes may be reduced by as much as 1.50% during the
first three years of such Program Loans) and [INSERT PERCENTAGE]
of the outstanding principal balance of the Transferred Mortgage
Loans are adjustable rate mortgage loans.
(xvi) With respect to Transferred Mortgage Loans that are adjustable
rate mortgage loans, as of the Cut-Off Date, all interest rate
adjustments have been performed correctly in accordance with the
terms of the related Mortgage.
For purposes of this Conveyance Agreement, the "related Pooling and
Servicing Agreement" is the Pooling and Servicing Agreement relating to the
EquiVantage Home Equity Loan Trust [INSERT SERIES].
Terms capitalized herein and not defined herein shall have their respective
meanings as set forth in the Mortgage Transfer Agreement.
IN WITNESS WHEREOF, the Company and the Originator have caused this
Conveyance Agreement to be duly executed by their respective officers thereunto
duly authorized, all as of the day and year first above written.
EQUIVANTAGE ACCEPTANCE CORP.,
the Company
By:
--------------------------------
Name:
Title:
EQUIVANTAGE INC.
the Originator
By:
--------------------------------
Name:
Title:
A-4
SCHEDULE OF MORTGAGE LOANS
A-5
Exhibit B
AUTHORIZED REPRESENTATIVES
Reference is hereby made to the Master Loan Transfer Agreement, dated as
of June 1, 1997 (the "Agreement"), among EquiVantage Acceptance Corp. (the
"Company") and EquiVantage Inc., as Originator:
The following are the Originator's Authorized Representatives for purposes
of the Agreement:
Specimen
Name Title Signature
▇▇▇▇ ▇. ▇▇▇▇▇ President /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Senior Vice President /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and Secretary ------------------------
IN WITNESS WHEREOF, I, ▇▇▇▇▇▇ ▇▇▇▇▇▇, hereby certify that the above
signatures are true and correct as of this 27th day of June, 1997.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Secretary
B-1
The following are the Company's Authorized Representatives for purposes of
the Agreement:
Specimen
Name Title Signature
▇▇▇▇ ▇. ▇▇▇▇▇ President /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Senior Vice President /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
and Secretary ------------------------
IN WITNESS WHEREOF, I, ▇▇▇▇▇▇ ▇▇▇▇▇▇, hereby certify that the above
signatures are true and correct as of this 27th day of June 1997.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Secretary
B-2
SCHEDULE I
[Omitted from this filing on Form 8-K]