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TRANSFER AGREEMENT
TRANSFER AGREEMENT (this "Agreement"), dated January 30, 1997,
between RFC ASSET HOLDINGS, INC., a Delaware corporation, as transferor (the
"Transferor"), and RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC., as
transferee (the "Depositor").
WHEREAS, the Transferor purchased the Mortgage Loans and the
Related Documents for the home loans indicated on the Mortgage Schedule attached
as Exhibit 1 hereto (collectively, the "Mortgage Loans") including rights to (a)
any property acquired by foreclosure or deed in lieu of foreclosure or
otherwise, and (b) the proceeds of any insurance policies covering the Mortgage
Loans, pursuant to the Mortgage Loan Purchase Agreement.
WHEREAS, the parties hereto desire that the Transferor sell
the Mortgage Loans to the Depositor pursuant to the terms of this Agreement;
Each of the Transferor and the Depositor has duly authorized
the execution, delivery and performance of this Agreement and is entering into
this Agreement for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.
In consideration of the mutual agreements herein contained,
the Transferor and the Depositor agree as follows:
1. All capitalized terms used but not defined herein shall
have the meanings assigned thereto in Appendix A to the indenture dated January
30, 1997 (the "Indenture"), between Home Loan Trust 1997-HI1, as issuer, and The
Chase Manhattan Bank, as indenture trustee.
2. Concurrently with the execution and delivery hereof, the
Transferor does hereby sell, transfer, assign, set over and otherwise convey to
the Depositor, without recourse, all of the Transferor's right, title and
interest in and to the Mortgage Loans and all of the Transferor's rights and
remedies against the Seller as provided in the Mortgage Loan Purchase Agreement.
3. Concurrently with the execution and delivery hereof, the
Depositor shall issue and deliver the Certificates to the Transferor as part of
the consideration to the Transferor by the Depositor pursuant to this Agreement.
In addition, the Depositor concurrently herewith shall pay to the Transferor in
immediately available funds an amount equal to $149,198,941.51 as part of the
consideration payable to the Transferor pursuant to this Agreement; provided
that such payment may be on a net funding basis if agreed by the Transferor and
the Depositor.
4. The parties hereto acknowledge that the Depositor is
acquiring the Mortgage Loans for the purpose of selling the Mortgage Loans to
the Issuer, which Mortgage Loans shall be pledged to the Indenture Trustee to
secure certain Notes to be issued by the Issuer.
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5. It is intended that the conveyance of the Mortgage Loans by
the Transferor to the Depositor as provided in this Agreement be, and be
construed as, an absolute sale of the Mortgage Loans by the Transferor to the
Depositor. Furthermore, it is not intended that such conveyance be deemed a
pledge of the Mortgage Loans by the Transferor to the Depositor to secure a debt
or other obligation of the Transferor. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held to be
property of the Transferor, or if for any reason this Agreement is held or
deemed to create a security interest in the Mortgage Loans, then it is intended
that:
(a) this Agreement shall also be deemed a security agreement
within the meaning of Articles 8 and 9 of the New York Uniform Commercial Code
and the Uniform Commercial Code of any other applicable jurisdiction;
(b) the conveyance provided for in this Agreement shall be
deemed to be a grant by the Transferor to the Depositor of a security interest
in all of the Transferor's right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired in, to and under the
Mortgage Loans;
(c) the possession by the Indenture Trustee or its agent of
the Mortgage Loans or such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party," or possession by a purchaser or a person designated by
such secured party, for purposes of perfecting the security interest pursuant to
the New York Uniform Commercial Code and Uniform Commercial Code of any other
applicable jurisdiction (including, without limitation, Sections 9-305, 8-313 or
8-321 thereof); and
(d) notifications to persons holding such property, and
acknowledgements, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgements, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Indenture Trustee for the purpose of perfecting such security interest under
applicable law.
The Transferor shall, to the extent consistent with this
Agreement, take such reasonable actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans
described above, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement.
6. The Transferor hereby represents and warrants to the Depositor that:
(a) The Transferor is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has the corporate power to own its assets and to transact
the business in which it is currently engaged. The Transferor is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
transacted by it or
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properties owned or leased by it requires such qualification and in
which the failure to so qualify would have a material adverse effect on
the business, properties, assets or condition (financial or other) of
the Transferor;
(b) The Transferor has the power and authority to make,
execute, deliver and perform its obligations under this Agreement and
all of the transactions contemplated under this Agreement, and has
taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of the Transferor enforceable in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies;
(c) The Transferor is not required to obtain the
consent of any other Person or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, license, approvals or
authorization, or registration or declaration, as shall have been
obtained or filed, as the case may be;
(d) The execution and delivery of this Agreement and
the performance of the transactions contemplated hereby by the
Transferor will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the
Transferor or any provision of the Certificate of Incorporation or
Bylaws of the Transferor, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the
Transferor is a party or by which the Transferor may be bound; and
(e) No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Transferor threatened, against the
Transferor or any of its properties or with respect to this Agreement
or the Certificates which in the opinion of the Transferor has a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement.
(f) This Agreement constitutes a legal, valid and
binding obligation of the Transferor, enforceable against the
Transferor in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);
(g) This Agreement constitutes a valid transfer and
assignment to the Depositor of all right, title and interest of the
Transferor in and to the Mortgage Loans, all monies due or to become
due with respect thereto, and all proceeds of such Cut-off
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Date Loan Balances with respect to the Mortgage Loans and such funds as
are from time to time deposited in the Custodial Account (excluding any
investment earnings thereon) as assets of the Trust and all other
property specified in the definition of "Trust" as being part of the
corpus of the Trust conveyed to the Depositor by the Transferor;
(h) The Transferor is not in default with respect to
any order or decree of any court or any order, regulation or demand or
any federal, state, municipal or governmental agency, which default
might have consequences that would materially and adversely affect the
condition (financial or other) or operations of the Master Servicer or
its properties or might have consequences that would materially
adversely affect its performance hereunder;
(i) Immediately prior to the assignment of the Mortgage
Loans, the Transferor was the sole beneficial owner of each Mortgage
Loan, free and clear of any pledge, lien, security interest or other
encumbrance, and such assignment validly transfers ownership of the
Mortgage Loans free and clear of any pledge, lien, security interest or
other encumbrance; and
(j) The Transferor has no notice of any adverse claims
with respect to the Mortgage Loans and acquired all of its right, title
and interest in, to and under the Mortgage Loans for value, in good
faith and without notice of any such advsere claims.
In the event of any material breach of the Transferor's representations
under clause (i) above as to any Mortgage Loan, which breach has a material
adverse effect on the Mortgage Loan and which is not cured in all material
respects within 90 days of written notice hereof, the Transferor shall either
repurchase or substitute for such Mortgage Loan as provided in Section 3.1(c) of
the Mortgage Loan Purchase Agreement.
It is understood and agreed that the representations, warranties and
obligations set forth in this Section 6 shall survive the delivery of the
Mortgage Loans by the Transferor to the Depositor and by the Depositor to the
Issuer, and the pledge of such Mortgage Loans by the Issuer to the Indenture
Trustee under the Indenture.
7. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns, and no
other person shall have any right or obligation hereunder.
8. All demands and notices hereunder shall be in writing and
shall be deemed effective upon receipt when delivered to (a) in the case of the
Transferor, RFC Asset Holdings, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ or such other address
as may hereafter be furnished to the Depositor and the Indenture Trustee in
writing by the Transferor, and (b) in the case of the Depositor, Residential
Funding Mortgage Securities II, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Investor Relations, Home Loan Trust
1997-HI1, or such other address as may hereafter be furnished to the Transferor
in writing by the Depositor,
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with a copy to Residential Funding Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Investor Relations, Home
Loan Trust 1997-HI1.
9. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
10. Neither this Agreement nor any term hereof may be changed,
waived discharged or terminated except by a writing signed by the party against
whom enforcement of such change, waiver, discharge or termination is sought.
This Agreement may be signed in any number of counterparts, each of which shall
be deemed an original, which taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the Transferor and the Depositor have
caused this Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
RFC ASSET HOLDINGS, INC.
Transferor
By:_____________________________________________
Name:
Title:
RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC.
Depositor
By:_____________________________________________
Name:
Title:
EXHIBIT 1
MORTGAGE LOAN SCHEDULE
TO BE PROVIDED UPON REQUEST