EXECUTION VERSION
TRANSFER AGREEMENT
AMONG
EQUICREDIT CORPORATION OF AMERICA
CALIFORNIA/EQUICREDIT CORPORATION
EQUICREDIT CORPORATION OF IN.
EQUICREDIT CORPORATION OF PA.
EQUICREDIT CORPORATION OF SC
TRANSFERORS
EQUICREDIT CORPORATION OF AMERICA
REPRESENTATIVE
AND
EQCC RECEIVABLES CORPORATION
EQCC ASSET BACKED CORPORATION
TRANSFEREES
DATED AS OF SEPTEMBER 1, 1996
EQUICREDIT FUNDING TRUST 1996-A
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01...................................................... 1
ARTICLE II
CONVEYANCE OF THE MORTGAGE LOANS
SECTION 2.01 Conveyance of Mortgage Loans....................... 1
SECTION 2.02 Possession of Mortgage Files....................... 2
SECTION 2.03 Books and Records.................................. 2
SECTION 2.04 Delivery of Mortgage Loan Documents................ 2
SECTION 2.05 Acceptance by Transferees of the Mortgage
Loans; Certain Substitutions; Certification
by the Trustee..................................... 4
SECTION 2.06 Acceptance by Transferees.......................... 6
SECTION 2.07 The Closing........................................ 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the
Representative and the Transferors................. 6
SECTION 3.02 Representations and Warranties as to the
Mortgage Loans and the Mortgage Pool............... 11
SECTION 3.03 Purchase and Substitution.......................... 20
ARTICLE IV
CONDITIONS
SECTION 4.01 Conditions to Obligation of the Transferees........ 22
SECTION 4.02 Conditions To Obligation of the Representative
and each Transferor................................ 23
i
Page
ARTICLE V
THE TRANSFERORS
SECTION 5.01 Third Party Servicers............................. 23
SECTION 5.02 Enforceability; Merger or Consolidation
of the Transferors................................ 24
SECTION 5.03 Mandatory Delivery; Grant of Security Interest.... 24
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 Conflicts With Pooling and Servicing Agreement.... 25
SECTION 6.02 Protection of Title to Trust...................... 25
SECTION 6.03 Other Liens or Interests.......................... 25
SECTION 6.04 Purchase Events................................... 25
SECTION 6.05 Indemnification................................... 26
SECTION 6.06 Trust............................................. 26
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01 Amendment......................................... 26
SECTION 7.02 Waivers........................................... 27
SECTION 7.03 Costs and Expenses................................ 27
SECTION 7.04 Survival.......................................... 27
SECTION 7.05 Confidential Information.......................... 27
SECTION 7.07 Headings and Cross-References..................... 28
SECTION 7.08 Recordation of Agreement.......................... 28
SECTION 7.09 Governing Law..................................... 28
SECTION 7.10 Notices........................................... 28
SECTION 7.11 Counterparts...................................... 28
EXHIBIT A List of Transferors
EXHIBIT B Mortgage Loan Schedules
EXHIBIT C Form of Transferee Receipt
ii
THIS TRANSFER AGREEMENT is made as of September 1, 1996, by
and among THE TRANSFERORS LISTED ON THE SIGNATURE PAGE HERETO (the
"Transferors"), EQUICREDIT CORPORATION OF AMERICA, as representative (the
"Representative") and EQCC ASSET BACKED CORPORATION ("EQBC") and EQCC
RECEIVABLES CORPORATION ("EQC", and collectively with EQBC, the "Transferees").
WHEREAS, Transferors and the Transferees wish to set forth the
terms pursuant to which the Mortgage Loans are to be transferred by the
Transferors to the Transferees in exchange for (i) the delivery of cash from the
Transferees and (ii) the acceptance by EQC of a capital contribution from
EquiCredit Corporation of America;
NOW, THEREFORE, in consideration of the foregoing, the other
good and valuable consideration and the mutual terms and covenants contained
herein, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01 Certain capitalized terms used in this Agreement
are defined in and shall have the respective meanings assigned them in Article I
to the Pooling and Servicing Agreement, dated as of September 1, 1996, among the
Transferees, as Depositors, EquiCredit Corporation of America, as Servicer and
First Bank National Association, as Trustee (the "Pooling and Servicing
Agreement"). All references herein to "the Agreement" or "this Agreement" are to
this Transfer Agreement, and all references herein to Articles, Sections and
subsections are to Articles, Sections or subsections of this Transfer Agreement
unless otherwise specified.
ARTICLE II
CONVEYANCE OF THE MORTGAGE LOANS
SECTION 2.01 Conveyance of Mortgage Loans.
(a) Immediately prior to consummation on the Closing Date of
the transactions contemplated by the Pooling and Servicing Agreement, in
consideration of each Transferee's delivery of the amount of cash and other
consideration to or to the order of the applicable Transferor as set forth on
Exhibit A hereto, each Transferor does hereby transfer, assign, set over and
convey to the related Transferee without recourse, all of the right, title and
interest of such Transferor in and to the Mortgage Loans set forth in the
applicable Mortgage Loan Schedules attached hereto as Exhibit β�-β�, β�-β�, β�-β�, β�-β�
and B-5, together with the Mortgage Files relating thereto and all proceeds
thereof (excepting the Representative's Yield and amounts received on and after
the Cut-off Date in respect of interest accrued on such Mortgage Loans prior to
the Cutoff Date).
1
SECTION 2.02 Possession of Mortgage Files.
(a) Upon the delivery to each Transferor of the consideration
set forth in Section 2.01, the ownership of each Transferor's Mortgage Notes,
related Mortgages and the contents of the related Mortgage Files are vested in
the related Transferee.
(b) Pursuant to Section 2.04, each Transferor has delivered or
caused to be delivered each Transferees' Mortgage File with respect to its
Mortgage Loans to the related Transferee.
SECTION 2.03 Books and Records.
The transfer of each Mortgage Loan to a Transferee shall be
reflected on the Transferors' balance sheets and other financial statements as a
sale of assets by the Representative and each Transferor. The Transferors shall
be responsible for maintaining, and shall maintain, a complete set of books and
records for each Mortgage Loan which shall be clearly marked to reflect the
ownership of each Mortgage Loan by a Transferee.
SECTION 2.04 Delivery of Mortgage Loan Documents.
Each Transferor has delivered or caused to be delivered to the
related Transferee or its designee in accordance with the instructions of such
Transferee, each of the documents referred to in Section 2.04 of the Pooling and
Servicing Agreement, as follows:
(a) (i)(A) The original Mortgage Note, with any intervening
endorsements, endorsed "Pay to the order of The First National Bank of Boston,
as Custodian under the Custodial Agreement dated as of September 1, 1996,
without recourse" and signed, by facsimile or manual signature, in the name of
the applicable Transferor by a Responsible Officer, with all prior and
intervening endorsements showing a complete chain of endorsement from the
originator of such Mortgage Note to the related Transferor, if the applicable
Transferor was not the originator or (B) if such Mortgage Note is a Destroyed
Mortgage Note, an original Destroyed Mortgage Note Affidavit together with a
copy of such Mortgage Note attached hereto, and (ii) with respect to
manufactured housing units, the certificate of title, if any;
(b) Either: (i) the original Mortgage, with evidence of
recording thereon (and, in the case of an Mortgage Loan secured by a Mortgaged
Property held in an Illinois Land Trust, signed by the trustee of such Illinois
Land Trust), (ii) a copy of the Mortgage certified as a true copy (A) by a
Responsible Officer of the applicable Transferor (provided, however, that such
Responsible Officer may complete one or more blanket certificates attaching
copies of one or more Mortgages relating thereto) or (B) by the closing
attorney, or by an officer of the title insurer or agent of the title insurer
which issued the related title insurance policy, or commitment therefor, if the
original has been transmitted for recording until such time as the original is
returned by the public recording office or (iii) a copy of the Mortgage
certified by the public
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recording office in those instances where the original recorded Mortgage has
been lost or not yet returned;
(c) The original Assignment of Mortgage in recordable form
from the applicable Transferor in blank or to the order of the applicable
Transferee;
(d) The original policy of title insurance or a true copy
thereof or, if such policy has not yet been delivered by the insurer, the
commitment or binder to issue same;
(e) All intervening assignments, if any, showing a complete
chain of assignment from the originator thereof to the applicable Transferor,
including any recorded warehousing assignments, with evidence of recording
thereon, certified by a Responsible Officer of the applicable Transferor as a
true copy of the original of such intervening assignments;
(f) A copy of all assumption and modification agreements,
if any, certified as a true copy by a Responsible Officer of the applicable
Transferor;
(g) If the Mortgaged Property is held in an Illinois Land
Trust, the original Assignment of Beneficial Interest, or, if the trustee of
such Illinois Land Trust retains such original Assignment of Beneficial
Interest, a certified true copy of such Assignment of Beneficial Interest so
certified by such trustee;
(h) If the Mortgaged Property is held in an Illinois Land
Trust, an original Reassignment of Assignment of Beneficial Interest from the
applicable Transferor in blank or to the order of the Transferee;
(i) If the Mortgaged Property is held in an Illinois Land
Trust, originals of all intervening Reassignments of Assignment of Beneficial
Interest, showing a complete chain of assignment from the beneficiaries of such
Illinois Land Trust to the applicable Transferor of all of such beneficiaries'
right, title, and interest in, to, and under the trust agreement with respect to
such Illinois Land Trust; and
(j) If the Mortgaged Property is held in an Illinois Land
Trust, (A) a certified copy of the instrument creating the Illinois Land Trust,
(B) a copy of the UCC-1 Financing Statement evidencing the assignment of the
Mortgagor's beneficial interest in the Illinois Land Trust, with evidence of
filing thereon, and (C) the original personal guaranty of the Mortgage Note,
executed by each beneficiary of the Illinois Land Trust.
The applicable Transferor shall use its reasonable efforts to
promptly deliver or cause to be delivered to the Transferees: (a) the original
recorded Mortgage in those instances where a copy thereof certified by such
Transferor was delivered to the related Transferee; (b) any intervening
assignments of Mortgage evidencing a complete chain of assignment from the
originator of such Mortgage to the related Transferor in those instances where
copies of such
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assignments certified by such Transferor were delivered to the Transferee; and
(c) the title insurance policy required in Section 2.04 above. The applicable
Transferor shall, within five (5) Business Days after the receipt thereof, and
in any event, within twelve months after the Closing Date, deliver or cause to
be delivered to the Transferees each document described in any of the preceding
clauses (a), (b) and (c); provided, however, that if a document described in the
preceding clause (a) or clause (b) has not been returned from the appropriate
public recording office, the applicable Transferor shall deliver a certified
copy of the Mortgage and a receipted copy of the assignment from the appropriate
recording office prior to the expiration of such twelve-month period.
Notwithstanding anything to the contrary contained in this Section 2.04, the
applicable Transferor shall be deemed to have satisfied its obligations to
deliver a Mortgage or assignment of Mortgage upon delivery to the related
Transferee of a copy of such Mortgage or Assignment of Mortgage, as applicable,
certified by the public recording office to be a true copy of the recorded
original thereof. From time to time the applicable Transferor may forward or
cause to be forwarded to the applicable Transferee additional original documents
evidencing an assumption or modification of an Mortgage Loan. All Mortgage Loan
documents held by a Transferee as to each Mortgage Loan are referred to herein
as the "Transferees' Mortgage File."
All recording required pursuant to this Section 2.04 shall be
accomplished by and at the expense of the Transferors.
SECTION 2.05 Acceptance by Transferees of the Mortgage Loans;
Certain Substitutions; Certification by the Trustee.
(a) Each Transferee agrees to execute and deliver on the
Closing Date an acknowledgment of receipt of, for each Mortgage Loan, the items
listed in Section 2.04 (a), (b), (c), (g) and (h) above, in the form attached as
Exhibit C hereto, and declare that they will hold such documents and any
amendments, replacements or supplements thereto, as well as any other assets
transferred pursuant to the terms hereof. Pursuant to the Pooling and Servicing
Agreement, the Custodial Agreement and this Agreement, the Trustee will, for the
benefit of the Transferees and the Certificate Insurer, review (or cause to be
reviewed) each of the documents set forth in Section 2.04 within 45 days after
the Closing Date (or, with respect to any Qualified Substitute Mortgage Loan,
within 45 days after the delivery thereof) and to deliver a certification in the
form attached to the Pooling and Servicing Agreement as Exhibit F-1 to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), (i) all
documents required to be delivered to it pursuant to this Agreement are in its
possession (other than those described in Section 2.04(a)(ii) and 2.04(f)), (ii)
such documents have been reviewed by it and have not been mutilated, damaged,
torn or otherwise physically altered (handwritten additions, changes or
corrections shall not constitute physical alteration if initialled by the
Mortgagor) and relate to such Mortgage Loan, and (iii) based on its examination
and only as to the foregoing documents, the information set forth on the
Mortgage Loan Schedule (other than items (i), (iv) and (x) of the definition of
Mortgage Loan Schedule) accurately reflects the information set forth in the
Mortgage File. Pursuant to the Pooling and
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Servicing Agreement, the Custodial Agreement and this Agreement, the Trustee
shall be under no duty or obligation to inspect, review or examine any such
documents, instruments, certificates or other papers to determine that they are
genuine, enforceable, or appropriate for the represented purpose or that they
are other than what they purport to be on their face. Within 375 days after the
Closing Date, pursuant to the Pooling and Servicing Agreement, the Trustee shall
deliver (or cause to be delivered) a final certification in the form attached to
the Pooling and Servicing Agreement as Exhibit F-2 evidencing the completeness
of the Mortgage Files.
(b) If the Trustee during the process of reviewing the
Mortgage Files finds any document constituting a part of a Mortgage File which
is not executed, has not been received, is unrelated to the Mortgage Loan
identified in the Mortgage Loan Schedule, or does not conform to the
requirements of Section 2.04 or substantively to the description thereof as set
forth in the Mortgage Loan Schedule, the Trustee is required by the Pooling and
Servicing Agreement to promptly give notice of the same. In performing any such
review, the Trustee may conclusively rely on the applicable Transferor as to the
purported genuineness of any such document and any signature thereon. It is
understood that the scope of the Trustee's review of the Mortgage Files is
limited solely to confirming that the documents listed in Section 2.04 (other
than those described in Section 2.04(f)) have been executed and received and
relate to the Mortgage Files identified in the Mortgage Loan Schedule. The
applicable Transferor agrees to use its reasonable efforts to cause to be
remedied a material defect in a document constituting part of a Mortgage File of
which the Representative is so notified by the Trustee or the Certificate
Insurer. If, however, within 60 days after notice to it respecting such defect,
the applicable Transferor has not caused to be remedied the defect and the
defect materially and adversely affects the interest of the related Transferee
in the Mortgage Loan, upon demand therefor by the Servicer, the Transferor will
on the Payment Date immediately succeeding the end of such 60 day period (i)
substitute, in lieu of such Mortgage Loan, a Qualified Substitute Mortgage Loan
in the manner and subject to the conditions set forth in Section 3.03 or (ii)
purchase such Mortgage Loan at a purchase price equal to the Principal Balance
of such Mortgage Loan as of the date of purchase, plus all accrued and unpaid
interest on such Principal Balance, computed at the Mortgage Interest Rate, net
of the Servicing Fee if the Representative is the Servicer, plus the amount of
any unreimbursed Servicing Advances made by the Servicer with respect to such
Mortgage Loan (after deducting therefrom any amounts received in respect of such
purchased Mortgage Loan or Loans).
(c) Upon receipt by the Trustee of a certification of a
Servicing Officer of the Servicer of such substitution or purchase described
above and receipt of the Mortgage File relating to the purchase price for such
Deleted Mortgage Loan or the Qualified Substitute Mortgage Loan and any
Substitution Adjustment, the Trustee is required to release to the
Representative or to the applicable Transferor the related Mortgage File and
shall execute, without recourse, and deliver such instruments of transfer
necessary to transfer such Mortgage Loan to the Representative or to the
applicable Transferor.
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SECTION 2.06 Acceptance by Transferees.
Each Transferee acknowledges the assignment to it of the
Mortgage Loans being transferred hereby by the related Transferors and the
delivery of the Mortgage Files to it or upon its order and, concurrently with
such delivery, has executed, authenticated and delivered to or upon the order of
the Representative on behalf of the related Transferors, in exchange for such
Mortgage Loans and the related Mortgage Files, cash and other consideration as
set forth in Section 2.01.
SECTION 2.07 The Closing.
The conveyance of the Mortgage Loans shall take place at the
offices of ββββββ, ββββββββββ & βββββββββ�, βββ� βββββ� ββββββ, βββ� ββββ, βββ� ββββ
βββββ�, on the Closing Date, immediately prior to the closing of the transactions
contemplated by the Pooling and Servicing Agreement, the Underwriting Agreement
and the other Basic Documents.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Representations and Warranties of the
Representative and the Transferors.
(1) The Representative hereby represents and warrants to the
Transferees as of the Closing Date:
(a) The Representative is duly organized, validly existing,
and in good standing under the laws of the State of Delaware and has all
licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each Mortgaged Property State if the
laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Representative and perform its obligations
as Representative hereunder; the Representative has the power and authority to
execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the Representative
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action; this Agreement is the valid, binding
and enforceable obligation of the Representative; and all requisite action has
been taken by the Representative to make this Agreement valid, binding and
enforceable upon the Representative in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally or the application of
equitable principles in any proceeding, whether at law or in equity;
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(b) 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 Representative makes no such
representation or warranty), that are necessary in connection with the purchase
and sale of the Certificates and the execution and delivery by such
Representative of the 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, 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 and the other documents on the part
of the Representative and the performance by the Representative of its
obligations as a Representative under this Agreement and such of the other Basic
Documents to which it is a party;
(c) The consummation of the transactions contemplated by this
Agreement will not result in the breach of any terms or provisions of the bylaws
of the Representative or result in the breach of any term or provision of, or
conflict with or constitute a default under or result in the acceleration of any
obligation under, any material agreement, indenture or loan or credit agreement
or other material instrument to which the Representative or its property is
subject, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Representative or its property is subject;
(d) Neither this Agreement nor the Prospectus nor the
Prospectus Supplement nor any statement, report or other document prepared by
the Representative and furnished or to be furnished pursuant to this Agreement
or in connection with the transactions contemplated hereby, by the Pooling and
Servicing Agreement or by any Basic Document contains any untrue statement of
material fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading;
(e) There is no action, suit, proceeding or investigation
pending or, to the best of the knowledge of the Representative, threatened
against the Representative which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Representative or
in any material impairment of the right or ability of the Representative to
carry on its business substantially as now conducted, or in any material
liability on the part of the Representative or which would draw into question
the validity of this Agreement or the Mortgage Loans or of any action taken or
to be taken in connection with the obligations of the Representative
contemplated herein, or which would be likely to impair materially the ability
of the Representative to perform under the terms of this Agreement;
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(f) The Representative is not in default with respect to any
order or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or other) or
operations of the Representative or its properties or might have consequences
that would materially and adversely affect its performance hereunder;
(g) Upon the receipt of each Mortgage File by the Transferees
under this Agreement, the Transferees will have good and indefeasible title to
each Mortgage Loan (other than the Representative's Yield and amounts received
after the Cut-off Date in respect of interest accrued on or prior to the Cut-off
Date) and such other items transferred hereunder, free and clear of any Lien
(other than Liens which will be simultaneously released);
(h) The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Transferor pursuant to this Agreement are not
subject to the bulk transfer laws or any similar statutory provisions in effect
in any applicable jurisdiction;
(i) The origination and collection practices used by the
Representative with respect to each Mortgage Note and Mortgage (other than each
Mortgage Note and Mortgage related to an Acquired Mortgage Loan) have been in
all material respects legal, proper, prudent and customary in the second
mortgage origination and servicing business; and, to the best knowledge of the
Representative, the origination and collection practices used by the originator
with respect to each Mortgage Note and Mortgage related to an Acquired Mortgage
Loan have been in all material respects legal, proper, prudent and customary in
the second mortgage origination and servicing business;
(j) The Representative did not transfer and will not transfer
any Mortgage Loan with any intent to hinder, delay or defraud any of its
creditors;
(k) The Representative is solvent and will not be rendered
insolvent as a result of the transfer of the Mortgage Loans to the Transferees
or the sale of the Certificates; and
(l) The Representative is (i) an approved seller/servicer of
first and second mortgage loans for FNMA and FHLMC in good standing, and (ii) a
mortgagee approved by the Secretary of Housing and Urban Development pursuant to
Section 203 and 211 of the National Housing Act.
(2) Each Transferor hereby represents and warrants to the
Transferees as of the Closing Date:
(a) Such Transferor is duly organized, validly existing, and
in good standing under the laws of the jurisdiction of its incorporation and has
all licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each Mortgaged Property State if the
laws of such state require licensing or qualification in order to
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conduct business of the type conducted by such Transferor and perform its
obligations as a Transferor hereunder; such Transferor has the power and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by such
Transferor and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary action; this Agreement is the
valid, binding and enforceable obligation of such Transferor; and all requisite
action has been taken by such Transferor to make this Agreement valid, binding
and enforceable upon such Transferor in accordance with its terms, subject to
the effect of bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors rights generally or the
application of equitable principles in any proceeding, whether at law or in
equity;
(b) 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 such Transferor makes no such
representation or warranty), that are necessary in connection with the execution
and delivery by such Transferor of the Basic 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, 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 con templated by this Agreement
and the other documents on the part of such Transferor and the performance by
such Transferor of its obligations as a Transferor under this Agreement and such
of the other Basic Documents to which it is a party;
(c) The consummation of the transactions contemplated by this
Agreement will not result in the breach of any terms or provisions of the bylaws
of such Transferor or result in the breach of any term or provision of, or
conflict with or constitute a default under or result in the acceleration of any
obligation under, any material agreement, indenture or loan or credit agreement
or other material instrument to which such Transferor or its property is
subject, or result in the violation of any law, rule, regulation, order,
judgment or decree to which such Transferor or its property is subject;
(d) Neither this Agreement nor the Prospectus nor any
statement, report or other document prepared by the Representative or such
Transferor and furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby, by the Pooling and
Servicing Agreement or by any Basic Document, contains any untrue statement of
material fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading;
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(e) There is no action, suit, proceeding or investigation
pending or, to the best of such Transferor's knowledge, threatened against such
Transferor which, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial condition,
properties or assets of such Transferor or in any material impairment of the
right or ability of such Transferor to carry on its business substantially as
now conducted, or in any material liability on the part of such Transferor or
which would draw into question the validity of this Agreement or the Mortgage
Loans or of any action taken or to be taken in connection with the obligations
of such Transferor contemplated herein, or which would be likely to impair
materially the ability of the Transferor to perform under the terms of this
Agreement;
(f) Such Transferor is not in default with respect to any
order or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or other) or
operations of such Transferor or its properties or might have consequences that
would materially and adversely affect its performance hereunder or under any
Subservicing Agreement;
(g) Upon the receipt of each Mortgage File by the Transferees
under this Agreement, the Transferees will have good and indefeasible title to
each Mortgage Loan (other than the Representative's Yield and amounts received
after the Cut-off Date in respect of interest accrued on or prior to the Cut-off
Date) and such other assets transferred hereunder free and clear of any Lien
(other than Liens which will be simultaneously released);
(h) The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by such Transferor pursuant to this Agreement are not
subject to the bulk transfer laws or any similar statutory provisions in effect
in any applicable jurisdiction;
(i) Such Transferor did not transfer any interest in any
Mortgage Loan with any intent to hinder, delay or defraud any of its respective
creditors;
(j) Such Transferor is solvent and such Transferor will not
be rendered insolvent as a result of the transfer of the Mortgage Loans to the
Transferees; and
(k) The origination and collection practices used by such
Transferor with respect to each Mortgage Note and Mortgage (other than each
Mortgage Note and Mortgage related to an Acquired Mortgage Loan) have been in
all material respects legal, proper, prudent and customary in the second
mortgage origination and servicing business; and, to the best knowledge of such
Transferor, the origination and collection practices used by the originator with
respect to each Mortgage Note and Mortgage related to an Acquired Mortgage Loan
have been in all material respects legal, proper, prudent and customary in the
second mortgage origination and servicing business.
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SECTION 3.02 Representations and Warranties as to the Mortgage
Loans and the Mortgage Pool.
The Transferors hereby represent and warrant to the
Transferees, jointly and severally, with respect to each Mortgage Loan, as of
the Closing Date:
(a) The information with respect to each Mortgage Loan set
forth in the Mortgage Loan Schedule is true and correct;
(b) All of the original or certified documentation set forth
in Section 2.04 (including all material documents related thereto) has been or
will be delivered to the Transferees on the Closing Date or as otherwise
provided in Section 2.04;
(c) (i) Each Mortgage Loan is principally secured by Mortgaged
Property. Each Mortgaged Property is improved by a one- to four-family
Residential Dwelling, which, to the best of such Depositor's knowledge, does not
include (A) cooperatives, (B) mobile homes, other than permanently affixed
mobile homes which do not constitute other than real property under state law,
or (C) manufactured housing units, as defined in the FNMA Selling Guide, which
constitute more than approximately 0.97% of the Mortgage Loans in the Fixed Rate
Group and approximately 0.49% of the Mortgage Loans in the Adjustable Rate
Group, and which constitute other than real property under state law;
(ii) With respect to each Mortgage Loan involving property
improved by a manufactured or mobile home, the Originator has taken all action
necessary to create a valid and perfected first or second priority (as reflected
in the Mortgage Loan Schedule) lien and security interest in such manufactured
or mobile home and the related Mortgaged Property, including, without
limitation, the filing of UCC financing statements or notations on certificates
of title if necessary, under applicable state law;
(iii) Approximately 7.27% of the Mortgage Loans in the Fixed
Rate Group and approximately 0.55% of the Mortgage Loans in the Adjustable Rate
Group are secured by Mortgaged Properties located in 18 North Carolina counties
declared eligible for federal disaster assistance as a result of damage
inflicted in September 1996 by Hurricane ββββ;
(d) Each Mortgage Loan is being serviced by the Servicer or
one or more Subservicers;
(e) The Mortgage Note related to each Mortgage Loan bears a
fixed Mortgage Interest Rate;
(f) Approximately 26.59% of the Mortgage Loans in the Fixed
Rate Group, approximately 6.72% of the Mortgage Loans in the Adjustable Rate
Group and approximately 25.05% of all the Mortgage Loans are balloon loans which
will provide for a final Monthly
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Payment substantially greater than the preceding Monthly Payments. Approximately
0.16%, 1.90%, 0.03%, 0.05% and 24.46% of the Mortgage Loans in the Fixed Rate
Group are balloon loans based on a 30-year amortization schedule and a single
payment of the remaining loan balance 5, 7, 8, 10 and 15 years after
origination, respectively. Approximately 2.17%, 0.58% and 3.97% of the Mortgage
Loans in the Adjustable Rate Group are balloon loans based on approximately a
30-year amortization schedule and a single payment of the remaining loan balance
approximately 7, 10 and 15 years after origination, respectively. All of such
balloon loans provide for Monthly Payments based on an amortization schedule
specified in the related Mortgage Note and have a final balloon payment no
earlier than 60 months following origination and no later than 180 months
following origination. Each other Mortgage Note will provide for a schedule of
substantially equal Monthly Payments which are, if timely paid, sufficient to
fully amortize the principal balance of such Mortgage Note on or before its
maturity date;
(g) Each Mortgage relating to a Mortgage Loan in the Fixed
Rate Group is a valid and subsisting first or more junior lien on the Mortgaged
Property subject, in the case of any second Mortgage Loan, only to a First Lien
on such Mortgaged Property, and each Mortgage relating to a Mortgage Loan in the
Adjustable Rate Group is a valid and subsisting First Lien on the Mortgaged
Property, and subject in all cases to the exceptions to title set forth in the
title insurance policy or the other evidence of title enumerated in Section
2.04(d), with respect to the related Mortgage Loan, which exceptions are
generally acceptable to second mortgage lending companies, and such other
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. If the Mortgaged
Property is held in an Illinois Land Trust (a "Land Trust Mortgage"), (i) a
natural person is the beneficiary of such Illinois Land Trust, and either is a
party to the Mortgage Note or is a guarantor thereof, in either case, in an
individual capacity, and not in the capacity of trustee or otherwise, and, if a
party to the Mortgage Note, is jointly and severally liable under the Mortgage
Note; (ii) the Mortgagor is the trustee of such Illinois Land Trust, is a party
to the Mortgage Note and is the mortgagor under the Mortgage in its capacity as
such trustee and not otherwise; (iii) a land trust trustee, duly qualified under
applicable law to serve as such, has been properly designated and currently so
serves and is named as such in the land trust agreement and such trustee is
named in the Land Trust Mortgage as Mortgagor; (iv) all fees and expenses of the
land trust trustee which have previously become due or owing have been paid and
no such fees or expenses are or will become payable by the Certificateholders or
the Trust Fund; (v) the beneficiary is solely obligated to pay any fees and
expenses of the land trust trustee and the priority of the lien of the Land
Trust Mortgage is not and will not be subject or subordinate to any amounts
owing to the land trust trustee; (vi) the Mortgaged Property is occupied by the
beneficiary under the land (if indicated to be owner occupied on the Mortgage
Loan Schedule) trust agreement and, if such land trust agreement terminates, the
beneficiary will become the owner of the Mortgaged Property; (vii) the
beneficiary is obligated to make payments under the related Mortgage Note and
(subject to applicable law) will have personal liability for deficiency
judgments; (viii) the Land Trust Mortgages and assignments of beneficial
interest relating to land trusts in the Mortgage Pool were made in compliance
with their respective land trust agreements, were validly entered into
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by their respective land trust trustee or beneficiary and did not, do not
currently, and will not in the future, violate any provision of their respective
land trust agreement; (ix) a UCC financing statement has been filed, continued,
and will be continued, without intervening liens, as the first lien upon the
beneficial interest in the Land Trust Mortgage; (x) each assignment of
beneficial interest with respect to Land Trust Mortgages in the Mortgage Pool
was at the time of respective assignment the only assignment of such beneficial
interest in the land trust, such assignment was accepted by the respective land
trust trustee, to the best of the Depositors' knowledge, subsequent assignments
of the beneficial interest in whole or in part have not been made, and such
subsequent assignments of the beneficial interest or any part thereof are not
permitted pursuant to a written agreement between the respective beneficiary and
the Mortgagee, until the expiration of the Mortgage Note in each respective land
trust; (xi) the Land Trust Mortgages are the first or second liens on the
Mortgaged Properties; no liens are in place against the beneficial interests, or
any part thereof, of any Land Trust Mortgage or collateral assignment of
beneficial interest, which liens are superior to the interest held by the
related Depositor; and the beneficiary or land trust trustee is forbidden,
pursuant to a written agreement between the beneficiary or the land trust
trustee (as applicable) and the Mortgagee, from using the land trust property or
beneficial interest, or any part of either, as security for any other debt of
the same priority as or senior to such Land Trust Mortgage until the expiration
date of its respective Mortgage Note; and (xii) the terms and conditions of the
land trust agreement do not prevent the free and absolute marketability of the
Mortgaged Property. As of the Cut-off Date, the Principal Balance of the
Mortgage Loans in the Fixed Rate Group and the Adjustable Rate Group related to
Land Trust Mortgages does not exceed approximately 0% and 0%, respectively, of
the Mortgage Loans;
(h) Except with respect to liens released immediately prior to
the transfer herein contemplated, immediately prior to the transfer and
assignment herein contemplated, the applicable Transferor held good and
indefeasible title to, and was the sole owner of, each Mortgage Loan conveyed by
such Transferor subject to no liens, charges, mortgages, encumbrances or rights
of others; and immediately upon the transfer and assignment herein contemplated,
the applicable Transferee will hold good and indefeasible title, to, and be the
sole owner of, each Mortgage Loan (other than the Representative's Yield and
amounts received on or after the Cut-off Date in respect of interest accrued
prior to the Cut-off Date) subject to no liens, charges, mortgages, encumbrances
or rights of others;
(i) None of the Mortgage Loans, other than Bankruptcy Loans,
are 30 to 59 days contractually delinquent; none of the Mortgage Loans in the
Mortgage Pool, other than Bankruptcy Loans, are 60 to 89 days contractually
delinquent; none of the Mortgage Loans in the Mortgage Pool (excluding
Bankruptcy Loans) are more than 89 days contractually delinquent; none of the
Mortgage Loans in the Mortgage Pool (excluding Bankruptcy Loans) have been 30 or
more days contractually delinquent more than once in the 12 months preceding the
Cut-off Date. For purposes of this representation and warranty "30 to 59 days
contractually delinquent" means that a Monthly Payment due on a Due Date was
unpaid as of the end of the month of the next succeeding Due Date and "60 to 89
days contractually delinquent" means that a Monthly Payment due on a Due Date
was unpaid as of the end of the month of the second Due Date
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following the Due Date on which such Monthly Payment was due. Approximately
0.42% of the Mortgage Loans in the Fixed Rate Group and none of the Mortgage
Loans in the Adjustable Rate Group are Bankruptcy Loans. None of the Mortgage
Loans are Bankruptcy Loans which are 30 days or more contractually delinquent.
Except for the Mortgage Loans listed on Exhibit G, to the best of such
Depositor's knowledge, none of the Mortgage Loans is subject to a Plan. Except
for the Bankruptcy Loans and the Mortgage Loans listed on Exhibit S, as of the
Cut-off Date none of the Mortgage Loans is 30 or more days contractually
delinquent. Exhibit S accurately sets forth the number of days that each
Mortgage Loan listed therein was contractually delinquent as of the Cut-off
Date;
(j) To the best of such Transferor's knowledge, (i) there is
no delinquent tax or assessment lien on any Mortgaged Property and (ii) each
Mortgaged Property is free of material damage and is in average repair;
(k) No Mortgage Loan is subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(l) To the best of such Transferor's knowledge, there is no
mechanics' lien or claim for work, labor or material affecting any Mortgaged
Property which is or may be a lien prior to, or equal with, the lien of such
Mortgage except those which are insured against by the title insurance policy
referred to in Section 3.02(n) below;
(m) Each Mortgage Loan, at the time it was made, complied in
all material respects with applicable state and federal laws and regulations,
including, without limitation, usury, equal credit opportunity and disclosure
laws;
(n) With respect to each Mortgage Loan, a written commitment
for a lender's title insurance policy, issued in standard American Land Title
Association or California Land Title Association form, or other form acceptable
in a particular jurisdiction, by a title insurance company acceptable to FNMA
and FHLMC and authorized to transact business in the state in which the related
Mortgaged Property is situated, together with a condominium endorsement, if
applicable, in an amount at least equal to the original Principal Balance 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 Mortgage, subject only to exceptions of the
character referred to in Section 3.02(g) above, was effective on the date of the
origination of such Mortgage Loan, and, as of the Closing Date, such commitment
will be valid and thereafter the policy issued pursuant to such commitment shall
continue in full force and effect;
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(o) The improvements upon each Mortgaged Property are covered
by a valid and existing hazard insurance policy with a generally acceptable
carrier that provides for fire and extended coverage representing coverage
described in Sections 5.07 and 5.08 of the Pooling and Servicing Agreement;
(p) A flood insurance policy is in effect with respect to each
Mortgaged Property with a generally acceptable carrier in an amount representing
coverage described in Sections 5.07 or 5.08 of the Pooling and Servicing
Agreement, if and to the extent required by Section 5.07 or 5.08 of the Pooling
and Servicing Agreement;
(q) Each Mortgage and Mortgage Note is the legal, valid and
binding obligation of the maker thereof and is enforceable in accordance with
its terms, except only as such enforce ment 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 all
parties to each Mortgage Loan had full legal capacity to execute all Mortgage
Loan documents and convey the estate therein purported to be conveyed;
(r) The applicable Transferor has directed the Servicer to
perform any and all acts required to be performed to preserve the rights and
remedies of the Transferees in any insurance policies applicable to the Mortgage
Loans including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of co-insured,
joint loss payee and mortgagee rights in favor of the Transferees;
(s) No more than approximately 0.24% of the Mortgage Loans in
the Fixed Rate Group, and no more than approximately 2.45% of the Mortgage Loans
in the Adjustable Rate Group, are secured by Mortgaged Properties located within
any single zip code area within the State of California; no more than
approximately 0.57% of the Mortgage Loans in the Fixed Rate Group, and no more
than approximately 3.02% of the Mortgage Loans in the Adjustable Rate Group, are
secured by Mortgaged Properties located within any single zip code area outside
the State of California;
(t) At least approximately 96.01% and approximately 94.03% of
the Mortgage Loans in the Fixed Rate Group and the Adjustable Rate Group,
respectively, are secured by Owner Occupied Mortgaged Property;
(u) The terms of the Mortgage Note and the Mortgage have not
been impaired, altered or modified in any material respect, except by a written
instrument which has been recorded or is in the process of being recorded, if
necessary, to protect the interest of the Transferees and which has been or will
be delivered to the Transferees. The substance of any such alteration or
modification is reflected on the Mortgage Loan Schedule. Each original Mortgage
was recorded, and all subsequent assignments of the original Mortgage have been
recorded in the appropriate jurisdictions wherein such recordation is necessary
to perfect the lien
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thereof as against creditors of the Transferors (or, subject to Section 2.04
hereof, are in the process of being recorded);
(v) No instrument of release or waiver has been executed in
connection with the Mortgage Loan, and no Mortgagor has been released, in whole
or in part;
(w) To the best of such Transferor's knowledge, all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. Except for payments in the nature of
escrow payments, including without limitation, taxes and insurance payments, the
Transferor has not advanced funds, or induced, solicited or knowingly received
any advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required by the Mortgage, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage proceeds, whichever is greater, to the day which precedes by one
month the Due Date of the first installment of principal and interest. With
respect to Mortgaged Properties that are the subject of a ground lease, to the
best of the such Transferor's knowledge, all lease rents, other payments or
assessments that have become due have been paid and the Mortgagor is not in
material default under any other provisions of the lease and the lease is valid,
in good standing and in full force and effect;
(x) To the best of the such Transferor's knowledge, there is
no proceeding pending or threatened for the total or partial condemnation of the
Mortgaged Property, nor is such a proceeding currently occurring, and such
property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty, so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended;
(y) To the best of such Transferor's knowledge, all of the
improvements which were included for the purpose of determining the appraised
value of the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining properties
encroach upon the Mortgaged Property;
(z) To the best of such Transferor's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation. To the best of such Transferor's knowledge,
all inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities and the Mortgaged Property is lawfully occupied
under applicable law;
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(aa) The proceeds of the Mortgage Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to make
future advances thereunder. Any and all requirements as to completion of any
on-site or off-site improvements and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses incurred in
making or closing or recording the Mortgage Loans were paid;
(bb) The related Mortgage Note is not and has not been secured
by any collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(cc) No Mortgage Loan was originated under a buydown plan;
(dd) There is no obligation on the part of the applicable
Transferor or any other party to make payments in addition to those made by the
Mortgagor;
(ee) 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 Transferees to the trustee
under such deed of trust, except in connection with a trustee's sale after
default by the Mortgagor. If the Mortgaged Property is held in an Illinois Land
Trust, the trustee thereof is duly qualified under applicable law to serve as
such, and has been properly designated and currently so serves, and no fees or
expenses are or will become payable by the Transferees to such trustee;
(ff) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;
(gg) With respect to each Mortgage Loan secured by a second
priority lien, the related First Lien requires equal monthly payments, or if it
bears an adjustable interest rate, the monthly payments for the related First
Lien may be adjusted not more frequently than once every six months;
(hh) With respect to each Mortgage Loan secured by a second
priority lien, either (i) no consent for the Mortgage Loan is required by the
holder of the related First Lien or (ii) such consent has been obtained and is
contained in the Mortgage File;
(ii) The maturity date of each Mortgage Loan secured by a
second priority lien is prior to the maturity date of the related First Lien if
such First Lien provides for a balloon payment; and with respect to any First
Lien that provides for negative amortization or deferred interest, the balance
of such First Lien used to calculate the Combined Loan-to-Value Ratio for the
Mortgage Loan is based on the maximum amount of negative amortization possible
under such First Lien;
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(jj) All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) (1) in compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located, and (2)(A) organized under the laws
of such state, or (B) qualified to do business in such state, or (C) federal
savings and loan associations or national banks having principal offices in such
state, or (D) not doing business in such state so as to require qualification or
licensing;
(kk) The Mortgage contains a customary provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event the related security for the Mortgage Loan is sold without the
prior consent of the mortgagee thereunder;
(ll) Any future advances made prior to (and excluding) the
Cut-off Date have been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on the Mortgage
Loan Schedule (or single method of determining the Mortgage Interest Rate if
such Mortgage Loan is in the Adjustable Rate Group and is not a Convertible
Mortgage Loan). Each Convertible Mortgage bears a single fixed Mortgage Interest
Rate during its FixedRate Period and has a single method of determining its
adjustable Mortgage Interest Rate following its conversion to an adjustable rate
loan. The consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan. The Mortgage Note does not permit or obligate the
Servicer to make future advances to the Mortgagor at the option of the
Mortgagor;
(mm) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial or non-judicial
foreclosure. There is no homestead or other exemption available to the Mortgagor
which would materially interfere with the right to sell the Mortgaged Property
at a trustee's sale or the right to foreclose the Mortgage except as set forth
in the Prospectus;
(nn) Except for bankruptcy-related defaults under the
Bankruptcy Loans, there is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of
acceleration; and neither the Servicer nor the Transferor has waived any
default, breach, violation or event of acceleration;
(oo) All parties to the Mortgage Note and the Mortgage had
legal capacity to execute the Mortgage Note and the Mortgage and each Mortgage
Note and Mortgage have been duly and properly executed by such parties;
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(pp) All amounts received by the Transferors on and after the
Cut-off Date with respect to the Mortgage Loans that are required to be paid to
the Transferees have been transferred to the Transferees;
(qq) All of the Mortgage Loans were purchased and
re-underwritten by the Representative or by a wholly-owned subsidiary of the
Representative;
(rr) As of the Cut-off Date, each Mortgage Loan conforms, and
all Mortgage Loans in the aggregate conform, in all material respects, to the
description thereof set forth in the Prospectus dated September 18, 1996,
including all statistical data provided therein in tabular format or otherwise;
(ss) The Mortgage Loans were not selected by the
Representative or the Transferors for transfer to the Transferees on any basis
intended to adversely affect the Transferees;
(tt) A full interior inspection appraisal was performed in
connection with each Mortgaged Property;
(uu) The Mortgage Interest Rate for each Mortgage Loan in the
Fixed Rate Group is not less than 6.875% per annum, and the Mortgage Interest
Rate for each Mortgage Loan in the Fixed Rate Group is not more than 18.000% per
annum; the weighted average minimum and weighted average maximum Mortgage
Interest Rates for Mortgage Loans in the Adjustable Rate Group are 9.54% and
15.97%, respectively, with minimum Mortgage Interest Rates that range from
approximately 6.12% to 13.000% and maximum Mortgage Interest Rates that range
from approximately 12.13% to 23.88%; approximately 1.86% of the Mortgage Loans
in the Fixed Rate Group have Mortgage Interest Rates less than 8.35%;
(vv) The gross margin for each Mortgage Loan in the Adjustable
Rate Group is not less than 2.75% per annum and not more than 8.19% per annum;
approximately 58.90%, 28.63% and 12.47% of the Mortgage Loans in the Adjustable
Rate Group have periodic rate adjustment caps of 1.00%, to 1.50%, and 3.00%,
respectively; as of the Cut-off Date, approximately 6.06% and 15.55% of the
Mortgage Loans in the Adjustable Rate Group are 1998 Convertible Mortgage Loans
and 1999 Convertible Mortgage Loans, respectively;
(ww) Each hazard insurance policy required to be maintained
under Section 5.07 of the Pooling and Servicing Agreement with respect to such
Mortgage Loan is a valid, binding, enforceable and subsisting insurance policy
of its respective kind and is in full force and effect;
(xx) If the Mortgaged Property consists of a leasehold estate,
the Mortgage covers property improvements and the Mortgagor's leasehold interest
in the land upon which such improvements are situated; at origination of the
Mortgage Loan the term of the leasehold estate was scheduled to last for at
least ten years beyond the maturity date of the Mortgage or
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provided for perpetual renewal covenants; the leasehold estate is assignable by
the Mortgagee; and the lease is valid and in full force and effect;
(yy) To the best of such Transferor's knowledge, no Mortgaged
Property was, at origination, located within a 1 mile radius of any site with
environmental or hazardous waste risks;
(zz) With respect to each Bankruptcy Loan, (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 CLTV is
less than or equal 85%, and (c) either (i) if the Current CLTV is between 60%
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 CLTV is less than 60%, as
of the Cut-off Date, the Mortgagor has made at least three consecutive payments
under the related Plan;
(aaa) No Mortgage Loan was originated in the State of
Alabama;
(bbb) With respect to each Mortgage Loan in the Fixed Rate
Group, the CLTV does not exceed 101.28%, and with respect to each Mortgage Loan
in the Adjustable Rate Group, the CLTV does not exceed 90%; and
(ccc) Except for the Mortgage Loans listed on Exhibit T to the
Pooling and Servicing Agreement, as of the Cut-off Date no Mortgage Loan is
subject to The Home Ownership and Equity Protection Act of 1994; all notices
required to be delivered to the related Mortgagor pursuant to the Home Ownership
and Equity Protection Act of 1994 have been delivered with respect to each
Mortgage Loan listed on Exhibit T to the Pooling and Servicing Agreement and all
other requirements of that Act have been complied with for each such Mortgage
Loan.
SECTION 3.03 Purchase and Substitution.
It is understood and agreed that the representations and
warranties set forth in Sections 3.01 and 3.02 shall survive delivery of the
Mortgage Loans to the Transferees. Upon discovery by the Trustee, the
Representative, any Transferee, the Servicer, any Subservicer, the Certificate
Insurer or the Custodian of a breach of any of such representations and
warranties which materially and adversely affects the value of Mortgage Loans or
the interest of the Transferees, or which materially and adversely affects the
interests of the Transferees in the case of a representation and warranty
relating to a particular Mortgage Loan (notwithstanding that such representation
and warranty was made to the Representative's or the Transferors' best
knowledge), the party discovering such breach shall give prompt written notice
to the others. Within 60 days of the earlier of its discovery or its receipt of
notice of any breach of a representation or warranty, the Representative shall
(a) promptly cure, or cause the applicable Transferor to cure, such breach in
all material respects, or (b) purchase, or cause the applicable
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Transferor to purchase, such Mortgage Loan by remitting to the Servicer for
deposit in the Principal and Interest Account, on the next succeeding
Determination Date relating to a Payment Date, in the manner and at the price
specified in Section 2.05(b), or by substituting, or causing the applicable
Transferor to substitute, one or more Qualified Substitute Mortgage Loans,
provided such substitution is effected not later than the date which is two
years after the Closing Date. Any such substitution shall be accompanied by
payment by the Representative or applicable Transferor of the Substitution
Adjustment.
In addition, the Servicer shall notify the Transferors and the
Transferees upon any Mortgage Loan becoming an Unpaid Mortgage Loan. Upon such
Mortgage Loan becoming an Unpaid Mortgage Loan, the Servicer shall purchase, or
cause the applicable Transferor to purchase, such Mortgage Loan by depositing in
the Principal and Interest Account, on the next succeeding Determination Date,
in the manner and at the price specified in Section 2.06(b), or by causing the
applicable Transferor to substitute, one or more Qualified Substitute Mortgage
Loans, provided such substitution is effected not later than the date which is
two years after the Closing Date. Any such substitution shall be accompanied by
payment of the Substitution Adjustment, if any, to be deposited in the Principal
and Interest Account.
As to any Deleted Mortgage Loan for which a Transferor
substitutes a Qualified Substitute Mortgage Loan or Loans, the Representative
shall effect such substitution by delivering to the applicable Transferee a
certification in the form attached to the Pooling and Servicing Agreement as
Exhibit F, and delivering to the applicable Transferee the documents
constituting the Mortgage File for such Qualified Substitute Mortgage Loan or
Loans.
The Servicer is required to deposit in the Principal and
Interest Account all payments received in connection with such Qualified
Substitute Mortgage Loan or Loans after the date of such substitution; provided,
however, that any amounts received after the date of substitution in respect of
interest accrued on or prior to the date of substitution on such Qualified
Substitute Mortgage Loan will constitute the property of the applicable
Transferor. Monthly Payments received with respect to Qualified Substitute
Mortgage Loans on or before the date of substitution will be retained by the
Representative on behalf of the applicable Transferor. The applicable Transferee
will own all payments received on the Deleted Mortgage Loan on or before the
date of substitution, and the Representative on behalf of the Transferors shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Deleted Mortgage Loan. The Representative shall amend the Mortgage Loan
Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of
this Agreement and the substitution of the Qualified Substitute Mortgage Loan.
Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall
be subject to the terms of this Agreement in all respects, and the
Representative and the Transferors shall be deemed to have made with respect to
such Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the covenants, representations and warranties set forth in
Sections 3.01 and 3.02. On the date of such substitution, the Representative
will remit to the applicable Transferee an amount equal to the Substitution
Adjustment, if any.
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It is understood and agreed that the obligations of the
Representative or any Transferor set forth in Sections 2.05 and 3.03 to cure,
purchase or substitute for a defective Mortgage Loan as provided in Sections
2.05 and 3.03 constitute the sole remedies of the Transferees respecting a
breach of the foregoing representations and warranties or an Unpaid Mortgage
Loan.
Any cause of action against the Representative or any
Transferor relating to or arising out of a defect in a Mortgage File as
contemplated by Section 2.05, the breach of any representations and warranties
made in Sections 3.01 or 3.02 or any Unpaid Mortgage Loan shall arise as to any
Mortgage Loan upon the occurrence of not less than all of the following events:
(i) discovery of such defect or breach by the Certificate Insurer or any party
and notice thereof to the Representative or notice thereof by the Representative
to the Transferees, (ii) failure by the Representative to cure such defect or
breach or purchase or substitute such Mortgage Loan as specified above, and
(iii) demand upon the Representative by the Certificate Insurer or any
Transferee for all amounts payable in respect of such Mortgage Loan. The party
delivering such notice shall also deliver a copy thereof to the Certificate
Insurer.
ARTICLE IV
CONDITIONS
SECTION 4.01 Conditions to Obligation of the Transferees. The
obligation of the Transferees to purchase the Mortgage Loans is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties True. The representations
and warranties of the Representative and the Transferors hereunder shall be true
and correct on the Closing Date with the same effect as if then made, and the
Representative and the Transferors shall have performed all obligations to be
performed by them hereunder on or prior to the Closing Date.
(b) Documents to be Delivered By the Representative and
the Transferors at the Closing.
(i) Final Mortgage Loan Schedule specifying the
Mortgage Loans to be Transferred hereunder, one copy to be
attached to each counterpart to the Pooling and Servicing
Agreement as the Mortgage Loan Schedule thereto;
(ii) Officer's Certificate dated as of the Closing Date,
in the form attached to the Underwriting Agreement with
respect to the Representative and each Transferor, and
attached thereto the resolutions of the Representative or such
Transferor, as the case may be, authorizing the transactions
contemplated by this Agreement and the other Basic Documents,
together with copies of the charter, by-laws and a Certificate
of Good Standing dated as of recent date (acceptable to
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the Transferees and their counsel) of the Representative or
such Transferor, as the case may be;
(iii) Opinion of Counsel to the Representative and each
Transferor dated as of the Closing Date in the form attached
to the Underwriting Agreement and any Opinion of Counsel
required to be delivered to any Rating Agency or the
Certificate Insurer;
(iv) Certificate or other evidence of merger or changes of
name, signed or stamped by the applicable regulatory
authority, if any of the Mortgage Loans were acquired by the
applicable Transferor by merger or acquired or originated by
the applicable Transferor while conducting business under a
name other than its present name.
(c) Other Documents. At the Closing, the Representative and
the Transferors shall provide such other documents as either Transferee may
reasonably request.
(d) Other Transactions. The transactions contemplated
by the Pooling and Servicing Agreement and the other Basic Documents shall be
consummated on the Closing Date.
SECTION 4.02 Conditions To Obligation of the Representative
and each Transferor.
The obligation of the Representative and the Transferors to
transfer the Mortgage Loans to the Transferees is subject to the satisfaction of
the condition that at the Closing Date, each Transferee shall deliver to its
related Transferor or Transferors the amount of cash set forth on Exhibit A
hereto, as provided in Section 2.01 and EQC shall accept a capital contribution
from EquiCredit Corporation of America in an amount set forth on Exhibit A
hereto, as provided in Section 2.01.
ARTICLE V
THE TRANSFERORS
SECTION 5.01 Third Party Servicers.
As of the Closing Date, the Representative and the Transferors
have represented to the Transferees that the Mortgage Loans are serviced by the
Servicer or the Transferors and are not subject to servicing agreements with
third parties. It is understood and agreed between the Representative and the
Transferors and the Transferees that the Mortgage Loans which are the subject of
this Agreement are to be delivered free and clear of any servicing agreements
with third party servicers. The Representative and the Transferor, without
reimbursement from the Transferees, shall pay any fees or penalties required by
any third party servicer for releasing the
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Mortgage Loans from any such servicing agreement and shall arrange for the
orderly transfer of such servicing from any such third party servicer to the
Transferees.
SECTION 5.02 Enforceability; Merger or Consolidation of the
Transferors.
(a) The Transferors will keep in full effect its respective
existence, rights and franchises as a corporation, and will obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the other Basic Documents, the Pooling and
Servicing Agreement, and any of the Mortgage Loans and to perform its duties
under such agreements.
(b) Any Person into which any Transferor may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which any Transferor shall be a party, or any Person succeeding
to the business of any Transferor, shall be the successor of any Transferor
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 5.03 Mandatory Delivery; Grant of Security Interest.
The transfer and delivery on the Closing Date by each
Transferor of its Mortgage Loans is mandatory, it being specifically understood
and agreed that each Mortgage Loan is unique and identifiable on the date hereof
and that an award of money damages would be insufficient to compensate the
applicable Transferee for the loss and damages incurred by such Transferee
(including damages to prospective purchasers of the Certificates) in the event
of such Transferor's failure to deliver the Mortgage Loans on or before the
Closing Date. Each Transferor hereby grants to its applicable Transferee a lien
on and continuing security interest in each Mortgage Loan and each document and
instrument evidencing such Mortgage Loan to secure the performance by such
Transferors of their obligations hereunder, and such Transferors agree that it
holds each Mortgage Loan in custody for the Transferees subject to the
Transferees' (i) right to reject any Mortgage Loan under the terms of this
Agreement and (ii) obligation to deliver cash and other consideration as set
forth in Section 2.01 for the Mortgage Loans. All rights and remedies of the
Transferees under this Agreement are distinct from, and cumulative with, any
other rights or remedies under this Agreement or afforded by law or equity, and
all such rights and remedies may be exercised concurrently, independently or
successively.
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ARTICLE VI
ADDITIONAL AGREEMENTS
The Transferors agree with the Transferees as follows:
SECTION 6.01 Conflicts With Pooling and Servicing Agreement.
To the extent that any provision of Sections 6.02 through 6.04
of this Agreement conflicts with any provision of the Pooling and Servicing
Agreement, the Pooling and Servicing Agreement shall govern.
SECTION 6.02 Protection of Title to Trust.
(a) The Transferors shall from time to time execute and
deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, and shall take such other action necessary or advisable to:
(i) maintain or preserve the transfer evidenced by this
Agreement or carry out more effectively the purposes hereof; or
(ii) preserve and defend the Transferees' title to the Mortgage
Loans and the rights of the Transferees in such assets against the
claims of all persons and parties, and the Transferors hereby designate
each Transferee, its agent and attorney-in-fact to execute any
financing statement, continuation statement or other instrument
required by the Transferees pursuant to this Section 6.02.
SECTION 6.03 Other Liens or Interests.
Except for the conveyances hereunder and pursuant to this
Agreement and the other Basic Documents, the Transferors shall not sell, pledge,
assign or transfer the Mortgage Loans to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on any interest therein, and the
Transferors shall defend the right, title and interest of the Transferees in, to
and under such Mortgage Loans against all claims of third parties claiming
through or under the Transferors.
SECTION 6.04 Purchase Events.
The Transferors and the Representative acknowledge that the
Transferees have assigned all of their right, title and interest in, to and
under this Agreement, including the Transferees' right to cause the
Representative or the Transferors to purchase the Mortgage Loans from the
Transferees under certain circumstances, to the Issuer pursuant to Section 2.01
of the
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Pooling and Servicing Agreement, and the Issuer has granted to the Trustee a
security interest in and Lien on the Mortgage Loans and its right, title and
interest in this Agreement. The Transferors and the Representative hereby
covenant and agree with the Transferees for the benefit of the Transferees, the
Trustee, the Certificateholders and the Certificate Insurer that the occurrence
of a breach of any of the Representative's or the Transferor's representations
and warranties contained in Section 3.02 hereof shall constitute events
obligating the Transferor and the Representative, to the extent specified in
Section 3.03 of the Pooling and Servicing Agreement, and without further notice
from the Transferees hereunder, to purchase an Mortgage Loan from the Trustee (a
"Purchase Event"). It is understood and agreed that the obligation of the
Representative or the Transferors to purchase any Mortgage Loan as to which a
breach has occurred and is continuing shall, if such obligation is fulfilled,
constitute the sole remedy against the Transferors and the Representative for
such breach available to the Trustee, the Certificateholders or the Certificate
Insurer.
SECTION 6.05 Indemnification.
The Transferors shall indemnify the Transferees for any
liability as a result of the failure of an Mortgage Loan to be originated in
compliance with all requirements of law. This indemnity obligation shall be in
addition to any obligation that the Transferors may otherwise have.
SECTION 6.06 Trust.
The Transferors acknowledge that the Transferees shall,
pursuant to the Pooling and Servicing Agreement, transfer the Mortgage Loans to
the Trustee (for the benefit of the Certificateholders), and the Transferees
assign their rights hereunder to the Trustee (for the benefit of the
Certificateholders) as set forth in the Pooling and Servicing Agreement.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01 Amendment.
This Agreement may be amended from time to time (upon prior
notice to each of the Rating Agencies and with the prior written consent of the
Certificate Insurer) by a written amendment duly executed and delivered by the
Transferors, the Representative and the Transferees, provided, however, that any
such amendment that materially adversely affects the rights of the
Certificateholders under the Pooling and Servicing Agreement must be consented
to by a Majority in Voting Interest of the Certificates.
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SECTION 7.02 Waivers.
No failure or delay on the part of the Transferees in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other or further exercise thereof or the exercise
of any other power, right or remedy.
SECTION 7.03 Costs and Expenses.
The Transferors agree to pay all reasonable out-of-pocket
costs and expenses of the Transferees, including fees and expenses of counsel,
in connection with the perfection as against third parties of the Transferees'
right, title and interest in, to and under the Mortgage Loans and the
enforcement of any obligation of the Transferors or the Representative
hereunder.
SECTION 7.04 Survival.
The representations, warranties and covenants of the
Transferor and the Representative set forth in Sections 3.01 and 3.02 and
Article V of this Agreement shall remain in full force and effect and shall
survive the closing under Section 2.07 and the transfers contemplated by
Sections 6.04 and 6.06.
SECTION 7.05 Confidential Information.
The Transferees agree that it shall neither use nor disclose
to any person the names and addresses of the Mortgagors, except in connection
with the enforcement of the Transferees' rights (i) hereunder, (ii) under the
Mortgage Loans, (iii) under the Basic Documents or (iv) as required by law.
SECTION 7.06 Severability Clause.
Any part, provision, representation or warranty of this
Agreement which is prohibited or which is held to be void or unenforceable shall
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
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SECTION 7.07 Headings and Cross-References.
The various headings in this Agreement are included for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement.
SECTION 7.08 Recordation of Agreement.
To the extent permitted by applicable law, the Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Transferors at the Transferors' expense on direction of the
Transferees accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Transferees.
SECTION 7.09 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
ITS CONFLICT OF LAWS PROVISIONS AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 7.10 Notices.
All demands, notices and communications under this Agreement
shall be in writing, personally delivered or mailed by certified mail with
return receipt requested, and shall be deemed to have been duly given upon
receipt at the appropriate address set forth in the Pooling and Servicing
Agreement.
SECTION 7.11 Counterparts.
This Agreement may be executed in two or more counterparts and
by different parties on separate counterparts, each of which shall be an
original, but all of which together shall constitute one and the same
instrument.
SECTION 7.12 The Certificate Insurer.
Any right conferred to the Certificate Insurer hereunder shall
be suspended during any period in which the Certificate Insurer is in default in
its payment obligations under the Insurance Policy. At such time as the
Certificates are no longer outstanding under the Pooling and Servicing
Agreement, and no amounts owed to the Certificate Insurer under any Basic
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Document remain unpaid, the Certificate Insurer's rights hereunder shall
terminate. The Certificate Insurer is an intended third-party beneficiary of
this Agreement.
IN WITNESS WHEREOF, the parties hereby have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date and year first above written.
EQUICREDIT CORPORATION OF AMERICA,
as Representative
By:_____________________________________
Name: βββββββ� β�. ββββ
Title: Senior Vice President
TRANSFEREES
EQCC RECEIVABLES CORPORATION
By:_______________________________
Name: βββββββ� β�. ββββ
Title: President
EQCC ASSET BACKED CORPORATION
By:_________________________________
Name: βββββββ� β�. ββββ
Title: President
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TRANSFERORS
EQUICREDIT CORPORATION OF AMERICA
By:_______________________________
Name: βββββββ� β�. ββββ
Title: Senior Vice President
CALIFORNIA/EQUICREDIT CORPORATION
By:_______________________________
Name: βββββββ� β�. ββββ
Title: Senior Vice President
EQUICREDIT CORPORATION OF IN.
By:_______________________________
Name: βββββββ� β�. ββββ
Title: Senior Vice President
EQUICREDIT CORPORATION OF PA.
By:_______________________________
Name: βββββββ� β�. ββββ
Title: Senior Vice President
EQUICREDIT CORPORATION OF SC
By:___________________________
Name: βββββββ� β�. ββββ
Title: Senior Vice President
-30-
EXHIBIT A
AMOUNTS TRANSFERRED BY TRANSFEREES
TO TRANSFERORS
EQCC RECEIVABLES CORPORATION
HAS TRANSFERRED THE FOLLOWING AMOUNT:
$139,879,420.11 to EquiCredit Corporation of America*
EQCC ASSET BACKED CORPORATION
HAS TRANSFERRED THE FOLLOWING AMOUNTS:
a) $2,774,754.60 to EquiCredit Corporation of Pa.
b) $5,454,543.67 to EquiCredit Corporation of SC
c) $22,479,317.97 to California/EquiCredit Corporation
d) $275,667.82 to EquiCredit Corporation of In.
-------------
* EQCC Receivables Corporation has transferred cash to EquiCredit Corporation of
America in an amount equal to $137,354,867.64 and has accepted a capital
contribution from EquiCredit Corporation of America in an amount equal to
$2,524,552.47.
β�-β�
βββββββ� β�-β�
MORTGAGE LOANS TRANSFERRED BY
EQUICREDIT CORPORATION OF AMERICA
B-1
EXHIBIT B-2
MORTGAGE LOANS TRANSFERRED BY
EQUICREDIT CORPORATION OF PA
B-2
EXHIBIT B-3
MORTGAGE LOANS TRANSFERRED BY
EQUICREDIT CORPORATION OF SC
B-3
EXHIBIT B-4
MORTGAGE LOANS TRANSFERRED BY
CALIFORNIA/EQUICREDIT CORPORATION
B-4
EXHIBIT B-5
MORTGAGE LOANS TRANSFERRED BY
EQUICREDIT CORPORATION OF IN.
B-5
EXHIBIT C-1
FORM OF TRANSFEREE RECEIPT
______ __, 19__
EquiCredit Corporation of America
California/EquiCredit Corporation
EquiCredit Corporation of In.
EquiCredit Corporation of Pa.
EquiCredit Corporation of SC
Re: Transfer Agreement (the "Transfer Agreement"),
EquiCredit Funding Asset Backed Certificates, Series
1996-A, Class A-1, Class A-2, Class β�- β�, Class A-4,
Class A-5 and Class A-6 dated as of September 1, 1996
among the Transferors and the Transferees listed
therein
--------------------------------------------------
Gentlemen:
In accordance with Section 2.05 of the Transfer Agreement, the
undersigned hereby certifies that, except as noted on the attachment hereto, if
any (the "Loan Exception Report"), it or the Custodian on its behalf has
received, with respect to each Mortgage Loan, the documents specified in
Sections 2.04(a), (b), (c), (g) and (h) of the Transfer Agreement, as
applicable, a Mortgage, or a certified copy thereof, Assignment of Mortgage, or
a certified copy thereof, and a Mortgage Note with respect to each Mortgage Loan
listed in the Transfer Agreement and the documents contained therein appear to
bear original signatures or copies of originals if the originals have not yet
been delivered.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Transfer Agreement.
[EQCC ASSET BACKED CORPORATION]
[EQCC RECEIVABLES CORPORATION]
By:_______________________________
Name: βββββββ� β�. ββββ
Title: President
C-1