Exhibit 4.3
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MASTER LOAN TRANSFER AGREEMENT
Dated as of September 1, 1997
by and between
EQUIVANTAGE ACCEPTANCE CORP.,
the Company
and
EQUIVANTAGE INC.,
the Originator
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TABLE OF CONTENTS
Page
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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
THIS MASTER LOAN TRANSFER AGREEMENT, dated as of September 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.
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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.
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
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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.
Second Mortgage Loan: A Mortgage Loan secured by a second priority
mortgage lien with respect to the related Property.
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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, that 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 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.
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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 that, 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 that 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.
(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
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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 that 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.
(x) The transactions contemplated by this Agreement are in the ordinary
course of business of the Originator.
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(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 that 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 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
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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 that, 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 that 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 otherwise) or
operations of the Company or its properties or might have consequences
that would materially and adversely affect its performance
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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 that 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.
(ix) The transactions contemplated by this Agreement are in the ordinary
course of business of the Company.
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(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 that 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 that 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.
(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
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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 that 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, 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
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(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 that 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.
(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.
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(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
that 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.
(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
14
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 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 that 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 that
will be released simultaneously with such transfer and assignment.
(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 that is or may have a priority over, be a lien prior to, or
equal with, the lien of the related Mortgage,
15
except those liens for
which funds sufficient to discharge such liens are held in escrow by
the Servicer or by an escrow agent, or that 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 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
16
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
that has been recorded, if necessary, to protect the interest of
the Trustee, as assignee of the Company, and that 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.
(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.
17
(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 threatened 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
that 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 that 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 that
render the rights and remedies of the holder thereof adequate for
the realization 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 relate Mortgagor that would materially interfere
with the right to sell the
18
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 that, 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
that 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 that 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 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.
19
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 that 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.
(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.
20
(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 that 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.
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
21
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 that "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 that 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 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
22
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 be deemed to have been received on the date delivered to or received at
the premises of the addressee.
23
If to the Company:
EquiVantage Acceptance Corp.
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
EquiVantage Acceptance Corp.
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Originator:
EquiVantage Inc.
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
EquiVantage Inc.
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
24
If to the Trustee:
Norwest Bank Minnesota, National Association
Xxxxx Xxxxxx & Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Servicer
Asset-Backed Administration
Re: EquiVantage Home Equity Loan Trust 1997-3
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Certificate Insurer:
Financial Guaranty Insurance Company
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance Department
Re: EquiVantage Acceptance Corp. Home Equity Loan Trust 1997-3
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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/ Xxxxxxxxx Xxxx
-----------------------------
Name: Xxxxxxxxx Xxxx
Title: Senior Vice President
EQUIVANTAGE INC.
the Originator
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
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 September __, 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 that 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 Loans
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 that 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 September 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
---- ----- ---------
Xxxx X. Xxxxx President
__________________________
Xxxxx X. Xxxxxxxx Senior Vice President
and Secretary __________________________
IN WITNESS WHEREOF, I, ____________________, hereby certify that the above
signatures are true and correct as of this ____ day of ____________________.
---------------------------------
Name:
Title:
B-1
The following are the Company's Authorized Representatives for purposes
of the Agreement:
Specimen
Name Title Signature
---- ----- ----------
Xxxx X. Xxxxx President ___________________
Xxxxx X. Xxxxxxxx Senior Vice President ___________________
and Secretary
IN WITNESS WHEREOF, I, _____________________, hereby certify that the above
signatures are true and correct as of this ____ day of _____________________.
-----------------------------
Name:
Title:
B-2
SCHEDULE I
LOAN NO. LAST NAME ADDRESS CITY STATE ZIP CODE LOAN AMT.
-------- --------- ------- ---- ----- -------- ---------
[None.]
