Mortgage Loan Contribution Agreement

MORTGAGE LOAN CONTRIBUTION AGREEMENT


BETWEEN


AAMES CAPITAL ACCEPTANCE CORP.
AS TRANSFEROR


AND


AAMES CAPITAL OWNER TRUST 1997-1
AS TRANSFEREE


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Dated as of March 1, 1997


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Mortgage Loan Contribution Agreement


This Mortgage Loan Contribution Agreement (this "Agreement"), dated as of March 1, 1997, is made and entered into by and between Aames Capital Acceptance Corp., a Delaware corporation (the "Transferor") and Aames Capital Owner Trust 1997-1 (the "Transferee"), a Delaware business trust formed pursuant to a Trust Agreement, dated as of March 1, 1997 (the "Trust Agreement"), between the Transferor, as Depositor and Wilmington Trust Company, as Owner Trustee.


Recitals


On the terms and conditions hereinafter provided, the Transferor intends to contribute and convey, and the Transferee intends to accept and acquire, certain Mortgage Loans (hereinafter defined) that the Transferor acquired from Aames Capital Corporation ("ACC") pursuant to that certain Initial Mortgage Loan Conveyance Agreement, dated as of March 1, 1997 (the "Initial Mortgage Loan Conveyance Agreement"). The Transferee intends to pledge the Mortgage Loans to Bankers Trust Company of California, N.A., as trustee (in such capacity, the "Indenture Trustee"), under an Indenture, to be dated as of March 1, 1997 (the "Indenture"), by and between the Transferee and the Indenture Trustee pursuant to which the Transferee's Adjustable Rate Asset-Backed Bonds, Series 1997-1 (the "Bonds") will be issued. The Bonds will be issued to the order of the Transferor in partial consideration of the Mortgage Loans and the related rights thereunder and the rights pursuant to the Initial Mortgage Loan Conveyance Agreement, with the balance of such consideration being deemed a contribution to the capital of the Transferee (collectively, the "Consideration").


Now, therefore, in consideration of the premises and the mutual agreements set forth herein, the parties agree as follows:


Section 1. Agreement to Contribute and Convey. As and for the Transferor's Consideration and subject to the terms and conditions set forth herein, the Transferor agrees to contribute and convey, and the Transferee agrees to accept and acquire, all of the Transferor's right, title and interest in and to the adjustable rate home equity mortgage loans identified on the schedule (the "Mortgage Loan Schedule") annexed hereto as Exhibit A (such loans, together with all related rights, interests and obligations, are collectively referred to herein as the "Mortgage Loans"). The Mortgage Loan Schedule will set forth as to each Mortgage Loan, among other things, (a) its identifying number and the name of the related mortgagor; (b) the street address of the related property securing such Mortgage Loan (the "Mortgaged Property"), including the state, county and zip code; (c) its date of origination; (d) its original principal amount; and (e) the date specified as the "Cut-off Date" with respect to such Mortgage Loan.


The aggregate of the principal balances of the Mortgage Loans being contributed and conveyed pursuant to this Agreement as of the close of business on the applicable Cut-off Dates, after application of all payments of principal received in respect of such Mortgage Loans before


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the applicable Cut-off Dates, is $335,635,754.48 (the "Initial Pool Balance"). Simultaneously with and in consideration of the Transferor's contribution and conveyance of the Mortgage Loans to the Transferee, (i) the Transferee shall cause the Bonds to be issued to the order of the Transferor and (ii) the Transferor shall be deemed automatically and for all purposes to have made a contribution to the capital of the Transferee (which contribution shall be reflected in the value assigned to the certificates evidencing equity interests in the Transferee) in an aggregate amount specified on Exhibit B annexed hereto. The Consideration is equal to the fair market value of the Mortgage Loans as of the Closing Date. The transfer and conveyance of the Mortgage Loans shall take place on March 26, 1997 or such other date as shall be mutually acceptable to the parties hereto (the "Closing Date").


Section 2. Conveyance of Mortgage Loans.


(a) Effective as of the Closing Date, subject only to delivery of the Mortgage File (as defined in the Initial Mortgage Loan Conveyance Agreement) for each Mortgage Loan pursuant to subsection (c) below, the Transferor does hereby contribute, assign, transfer and otherwise convey to Transferee, without recourse, representation or warranty (other than as expressly set forth in Section 3(a) hereof), and the Transferee does hereby accept, assume and acquire, all of the Transferor's right, title and interest in and to the Mortgage Loans identified on the Mortgage Loan Schedule, and the Transferee hereby assumes and agrees to perform and be bound by each and all of the covenants, agreements, duties and obligations of the Transferor arising under or relating to such Mortgage Loans.


(b) The Transferee and its assignees shall be entitled to receive all payments of principal and interest received or deemed to be received by the Transferor on or with respect to the Mortgage Loans on or after the applicable Cut-off Dates, and all other recoveries of principal and interest collected on or after the applicable Cut-off Dates (other than in respect of interest that accrued on such Mortgage Loan during periods prior to the applicable Cut-off Dates), and each of the rights of the Transferor pursuant to representations, warranties and indemnities in favor of the Transferor contained in the Initial Mortgage Loan Conveyance Agreement. All payments of interest due before the applicable Cut-off Dates but collected after the applicable Cut-off Dates, and recoveries of principal and interest collected before the applicable Cut-off Dates (other than amounts representing interest that accrued on the Mortgage Loans during any period on or after the applicable Cut-off Dates), shall belong to, and be promptly remitted to, the Transferor.


(c) In connection with its contribution and conveyance of the Mortgage Loans pursuant to subsection (a) above, the Transferor shall deliver to and deposit with, or cause to be delivered to and deposited with, the Transferee or its designee, on or before the Closing Date, the Mortgage File for each Mortgage Loan identified on the Mortgage Loan Schedule. In addition, the Transferor shall bear all recording and/or filing costs related to the transfer and conveyance by the Transferor of the Mortgage Loans to the Transferee or its designee. If any document or instrument in the Mortgage File is indicated as being required to be recorded or filed, as the case


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may be, is lost or returned unrecorded or unfiled, as the case may be, because of a defect therein, the Transferor shall promptly prepare or cause to be prepared a substitute therefor or cure such defect, as the case may be. If the Transferor is unable to deliver the original Mortgage or any intervening mortgage assignment with evidence of recording thereon because it has not received same from ACC, the provisions of Section 3(c) of the Initial Mortgage Loan Conveyance Agreement shall govern.


(d) All documents and records relating to the Mortgage Loans that are held by or on behalf of the Transferor, but not required to be a part of a Mortgage File, shall be delivered to the Transferee or its designee on or before the Closing Date.


(e) In connection with its conveyance of the Mortgage Loans pursuant to subsection (a) above, the Transferor shall deliver to the Transferee or its designee in respect of such Mortgage Loans, on or before the Closing Date, all amounts, if any, received on each Mortgage Loan on or after the applicable Cut-off Date (other than amounts representing interest that accrued during any period prior to the applicable Cut-off Date) held by or on behalf of the Transferor.


(f) The Transferor confirms to the Transferee that it has caused its computer records relating to the Mortgage Loans to indicate by a code that the Mortgage Loans have been sold to the Transferee and that the Transferor will treat the transaction contemplated by such conveyance as a sale in accordance with generally accepted accounting principles and will reflect such sale on its primary account records.


(g) The Transferor shall, at any time upon the request of the Transferee, without limiting the obligations of the Transferor under this Agreement, execute, acknowledge and deliver all such additional documents and instruments and all such further assurances and will do or cause to be done all such further acts and things as may be proper or reasonably necessary to carry out the intent of this Agreement.


Section 3. Representations, Warranties and Covenants of Transferor and Transferee.


(a) The Transferor hereby represents and warrants to and covenants with the Transferee, as of the date hereof, and shall be deemed to have represented and warranted to and covenanted with the Transferee, as of the Closing Date, that:


(i) the Transferor is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware;


(ii) the execution and delivery of this Agreement by the
Transferor, the consummation of the transactions contemplated in this
Agreement by the Transferor and the performance and compliance with the
terms of this Agreement by the Transferor will not violate the
Transferor's certificate of incorporation or bylaws or constitute a
default


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(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material
agreement or other instrument to which it is a party or which is
applicable to it or any of its assets, or result in the imposition of
any lien, charge or encumbrance upon any of its assets pursuant to any
such agreement, and all board resolutions and consents of shareholders
necessary for the Transferor to enter into and consummate all
transactions contemplated by this Agreement have been obtained;


(iii) the Transferor has the full corporate power and
authority to enter into and consummate all transactions contemplated by
this Agreement, has duly authorized the execution, delivery and
performance of this Agreement, and has duly executed and delivered this
Agreement;


(iv) this Agreement, assuming due authorization, execution and
delivery by the Transferee, constitutes a valid, legal and binding
obligation of the Transferor, enforceable against the Transferor in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
the ...