Document:

exv4w1

 

Exhibit 4.1

AEGIS ASSET BACKED SECURITIES CORPORATION,

Depositor

AEGIS MORTGAGE CORPORATION,

Seller

CHASE MANHATTAN MORTGAGE CORPORATION,

Servicer

THE MURRAYHILL COMPANY,

Credit Risk Manager,

and

WELLS FARGO BANK, N.A.,

Trustee

POOLING AND SERVICING AGREEMENT

Dated as of June 1, 2004

AEGIS ASSET BACKED SECURITIES TRUST

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-3

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page

	ARTICLE I DEFINITIONS
	 	 	 	 	25	 
	Section 1.1
	 	Definitions.	 	 	25	 
	Section 1.2
	 	Calculations Respecting Mortgage Loans.	 	 	58	 
	Section 1.3
	 	Calculations Respecting Accrued Interest.	 	 	58	 
	Section 1.4
	 	Rights of the NIMS Insurer.	 	 	58	 
	ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES	 	 	59	 
	Section 2.1
	 	Conveyance of Mortgage Loans.	 	 	59	 
	Section 2.2
	 	Acceptance by Trustee of the Mortgage Loans.	 	 	62	 
	Section 2.3
	 	Representations, Warranties and Covenants of the Servicer, the Seller and the Depositor.	 	 	63	 
	Section 2.4
	 	Delivery of Opinion of Counsel in Connection with Substitutions.	 	 	70	 
	Section 2.5
	 	Execution and Delivery of Certificates.	 	 	70	 
	ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS	 	 	70	 
	Section 3.1
	 	Servicer to Service Mortgage Loans.	 	 	70	 
	Section 3.2
	 	Subservicing; Enforcement of the Obligations of the Servicer.	 	 	71	 
	Section 3.3
	 	Rights of the Depositor and the Trustee in Respect of the Servicer.	 	 	72	 
	Section 3.4
	 	Trustee to Act as Servicer.	 	 	72	 
	Section 3.5
	 	Collection of Mortgage Loan Payments; Collection Account; Distribution Account.	 	 	72	 
	Section 3.6
	 	Collection of Taxes, Assessments and Similar Items; Escrow Accounts.	 	 	75	 
	Section 3.7
	 	Access to Certain Documentation and Information Regarding the Mortgage Loans.	 	 	76	 
	Section 3.8
	 	Permitted Withdrawals from the Collection Account and Distribution Account.	 	 	76	 
	Section 3.9
	 	Maintenance of Hazard Insurance; Maintenance of Primary Insurance Policies.	 	 	78	 
	Section 3.10
	 	Enforcement of Due-on-Sale Clauses; Assumption Agreements.	 	 	79	 
	Section 3.11
	 	Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage Loans.	 	 	81	 
	Section 3.12
	 	Trustee to Cooperate; Release of Mortgage Files.	 	 	84	 
	Section 3.13
	 	Documents, Records and Funds in Possession of Servicer to be Held for the Trustee.	 	 	85	 
	Section 3.14
	 	Servicing Compensation.	 	 	85	 
	Section 3.15
	 	Access to Certain Documentation.	 	 	86	 
	Section 3.16
	 	Annual Statement as to Compliance.	 	 	86	 
	Section 3.17
	 	Annual Independent Public Accountants’ Servicing Statement; Financial Statements.	 	 	86	 
	Section 3.18
	 	Errors and Omissions Insurance; Fidelity Bonds.	 	 	87	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page

	Section 3.19
	 	Advances.	 	 	87	 
	Section 3.20
	 	Advance Facility.	 	 	87	 
	Section 3.21
	 	Prepayment Penalties.	 	 	89	 
	Section 3.22
	 	Actions with Respect to Distressed Mortgage Loans.	 	 	90	 
	Section 3.23
	 	Duties of the Credit Risk Manager.	 	 	90	 
	Section 3.24
	 	Limitation Upon Liability of the Credit Risk Manager.	 	 	90	 
	Section 3.25
	 	Removal of Credit Risk Manager.	 	 	91	 
	ARTICLE IV DISTRIBUTIONS	 	 	91	 
	Section 4.1
	 	Distributions.	 	 	91	 
	Section 4.2
	 	Method of Distribution.	 	 	100	 
	Section 4.3
	 	Allocation of Losses.	 	 	100	 
	Section 4.4
	 	Reports to the Depositor and the Trustee.	 	 	101	 
	Section 4.5
	 	Reports by or on Behalf of the Trustee.	 	 	101	 
	Section 4.6
	 	Basis Risk Reserve Fund.	 	 	104	 
	Section 4.7
	 	Supplemental Interest Trust.	 	 	104	 
	Section 4.8
	 	Rights of Swap Counterparty.	 	 	105	 
	ARTICLE V THE CERTIFICATES	 	 	105	 
	Section 5.1
	 	The Certificates.	 	 	105	 
	Section 5.2
	 	Certificate Register; Registration of Transfer and Exchange of Certificates.	 	 	106	 
	Section 5.3
	 	Mutilated, Destroyed, Lost or Stolen Certificates.	 	 	111	 
	Section 5.4
	 	Persons Deemed Owners.	 	 	112	 
	Section 5.5
	 	Access to List of Certificateholders’ Names and Addresses.	 	 	112	 
	Section 5.6
	 	Maintenance of Office or Agency.	 	 	112	 
	ARTICLE VI THE DEPOSITOR, THE SERVICER, THE SELLER AND THE CREDIT RISK MANAGER	 	 	112	 
	Section 6.1
	 	Respective Liabilities of the Depositor, Servicer, Seller and Credit Risk Manager.	 	 	112	 
	Section 6.2
	 	Merger or Consolidation of the Depositor, Servicer, Seller and Credit Risk Manager.	 	 	112	 
	Section 6.3
	 	Limitation on Liability of the Depositor, the Servicer, the Seller and Others.	 	 	114	 
	Section 6.4
	 	Limitation on Resignation of Servicer.	 	 	114	 
	Section 6.5
	 	Reporting Requirements of the Commission and Indemnification.	 	 	115	 
	ARTICLE VII SERVICER DEFAULT	 	 	115	 
	Section 7.1
	 	Events of Default.	 	 	115	 
	Section 7.2
	 	Notification to Certificateholders.	 	 	118	 
	ARTICLE VIII CONCERNING THE TRUSTEE	 	 	118	 
	Section 8.1
	 	Duties of Trustee.	 	 	118	 
	Section 8.2
	 	Certain Matters Affecting the Trustee.	 	 	120	 
	Section 8.3
	 	Trustee Not Liable for Certificates or Mortgage Loans.	 	 	121	 

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page

	Section 8.4
	 	Trustee May Own Certificates.	 	 	121	 
	Section 8.5
	 	Trustee’s Fees and Expenses.	 	 	121	 
	Section 8.6
	 	Eligibility Requirements for Trustee.	 	 	122	 
	Section 8.7
	 	Resignation and Removal of Trustee.	 	 	123	 
	Section 8.8
	 	Successor Trustee.	 	 	123	 
	Section 8.9
	 	Merger or Consolidation of Trustee.	 	 	124	 
	Section 8.10
	 	Appointment of Co-Trustee or Separate Trustee.	 	 	124	 
	Section 8.11
	 	Tax Matters.	 	 	125	 
	Section 8.12
	 	Filings.	 	 	128	 
	Section 8.13
	 	Reporting Requirements of the Commission and Indemnification	 	 	129	 
	ARTICLE IX TERMINATION
	 	 	130	 
	Section 9.1
	 	Termination upon Liquidation or Purchase of all Mortgage Loans.	 	 	130	 
	Section 9.2
	 	Final Distribution on the Certificates.	 	 	131	 
	Section 9.3
	 	Additional Termination Requirements.	 	 	132	 
	ARTICLE X MISCELLANEOUS PROVISIONS	 	 	133	 
	Section 10.1
	 	Amendment.	 	 	133	 
	Section 10.2
	 	Recordation of Agreement; Counterparts.	 	 	135	 
	Section 10.3
	 	Governing Law.	 	 	135	 
	Section 10.4
	 	Intention of Parties.	 	 	135	 
	Section 10.5
	 	Notices.	 	 	136	 
	Section 10.6
	 	Severability of Provisions.	 	 	137	 
	Section 10.7
	 	Assignment.	 	 	137	 
	Section 10.8
	 	Limitation on Rights of Certificateholders.	 	 	137	 
	Section 10.9
	 	Inspection and Audit Rights.	 	 	138	 
	Section 10.10
	 	Certificates Nonassessable and Fully Paid.	 	 	138	 
	Section 10.11
	 	Limitations on Actions; No Proceedings.	 	 	138	 
	Section 10.12
	 	Mortgage Data.	 	 	139	 
	Section 10.13
	 	Benefits of Agreement; Additional Rights of NIMS Insurer.	 	 	139	 

iii

 

SCHEDULES

	 	 	 
	Schedule I:

	 	Mortgage Loan Schedule

EXHIBITS

	 	 	 
	Exhibit A:

	 	Forms of Certificates
	Exhibit B:

	 	[Reserved]
	Exhibit C:

	 	Form of Initial Certification of Custodian
	Exhibit D:

	 	Form of Final Certification of Custodian
	Exhibit E-1:

	 	Form of Residual Transfer Affidavit (Transferor)
	Exhibit E-2

	 	Form of Residual Transfer Affidavit (Transferee)
	Exhibit F:

	 	Form of Transferor Certificate
	Exhibit G-1:

	 	Form of Investment Letter (Non-Rule 144A)
	Exhibit G-2:

	 	Form of Investment Letter (Rule 144A)
	Exhibit H:

	 	Benefit Plan Affidavit
	Exhibit I:

	 	[Reserved]
	Exhibit J:

	 	Request for Release of Documents
	Exhibit K:

	 	Form of Certification to be Provided to the Depositor by the Servicer
	Exhibit L:

	 	Form of Certification to be Provided to the Depositor by the Trustee
	Exhibit M:

	 	Form of Limited Power of Attorney
	Exhibit N:

	 	Credit Risk Management Agreement
	Exhibit O:

	 	Swap Agreement

iv

 

     THIS POOLING AND SERVICING AGREEMENT dated as of June 1, 2004 (this
“Agreement”), is by and among AEGIS ASSET BACKED SECURITIES CORPORATION, a
Delaware corporation, as depositor (the “Depositor”), AEGIS MORTGAGE
CORPORATION, a Delaware corporation, as seller (the “Seller”), CHASE MANHATTAN
MORTGAGE CORPORATION, a New Jersey corporation, as servicer (the “Servicer”),
THE MURRAYHILL COMPANY, as credit risk manager, (the “Credit Risk Manager”),
and WELLS FARGO BANK, N.A., as trustee (the “Trustee”).

WITNESSETH THAT

     In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:

PRELIMINARY STATEMENT

     The Depositor has acquired the Mortgage Loans from the Seller, and at the
Closing Date is the owner of the Mortgage Loans and the other property being
conveyed by it to the Trustee hereunder for inclusion in the Trust Fund. On
the Closing Date, the Depositor will acquire the Certificates from the Trust
Fund, as consideration for its transfer to the Trust Fund of the Mortgage Loans
and the other property constituting the Trust Fund. The Depositor has duly
authorized the execution and delivery of this Agreement to provide for the
conveyance to the Trustee of the Mortgage Loans and the other property
constituting the Trust Fund. All covenants and agreements made by the Seller
in the Sale Agreement and by the Depositor, the Seller, the Servicer, the
Credit Risk Manager and the Trustee herein with respect to the Mortgage Loans
and the other property constituting the Trust Fund are for the benefit of the
Holders from time to time of the Certificates and, to the extent provided
herein, the NIMS Insurer, if any. The Depositor, the Seller, the Servicer, the
Trustee, and the Credit Risk Manager are entering into this Agreement, and the
Trustee is accepting the Trust Fund created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.

     As provided herein, the Trustee shall elect that the Trust Fund (exclusive
of (i) the Swap Agreement, (ii) the right to receive and the obligation to pay
Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls and (iii) the obligation
to pay Class I Shortfalls (collectively, the “Excluded Trust Assets”)) be
treated for federal income tax purposes as comprising four real estate mortgage
investment conduits under Section 860D of the Code (each a “REMIC” or, in the
alternative “REMIC 1,” “REMIC 2,” “REMIC 3” and “REMIC 4,” REMIC 4 also being
referred to as the “Upper Tier REMIC”). Any inconsistencies or ambiguities in
this Agreement or in the administration of this Agreement shall be resolved in
a manner that preserves the validity of such REMIC elections.

     Each Certificate, other than the Class R Certificate, represents ownership
of a regular interest in the Upper Tier REMIC for purposes of the REMIC
Provisions. In addition, each Certificate, other than the Class R, Class X and
Class P Certificates, represents (i) the right to receive payments with respect
to any Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls and (ii) the
obligation to pay Class I Shortfalls. The Class R Certificate represents
ownership of the sole Class of residual interest in each of REMIC 1, REMIC 2,
REMIC 3 and the Upper Tier REMIC for purposes of the REMIC Provisions.

 

 

     The Upper Tier REMIC shall hold as its assets the uncertificated Lower
Tier Interests in REMIC 3, other than the LT3-R interest, and each such Lower
Tier Interest is hereby designated as a regular interest in REMIC 3 for
purposes of the REMIC Provisions. REMIC 3 shall hold as its assets the
uncertificated Lower Tier Interests in REMIC 2, other than the LT2-R interest,
and each such Lower Tier Interest is hereby designated as a regular interest in
REMIC 2 for purposes of the REMIC Provisions. REMIC 2 shall hold as its assets
the uncertificated Lower Tier Interests in REMIC 1, other than the LT1-R
interest, and each such Lower Tier Interest is hereby designated as a regular
interest in REMIC 1. REMIC 1 shall hold as its assets the property of the
Trust Fund other than the Lower Tier Interests in REMIC 1, REMIC 2, REMIC 3 and
the Excluded Trust Assets.

     The startup day for each REMIC created hereby for purposes of the REMIC
Provisions is the Closing Date. In addition, for purposes of the REMIC
Provisions, the latest possible maturity date for each regular interest in each
REMIC created hereby is the Latest Possible Maturity Date.

2

 

REMIC 1:

     The following table sets forth the designations, principal balances and
interest rates for each interest in REMIC 1, each of which (other than the
LT1-R Lower Tier Interest) is hereby designated as a regular interest in REMIC
1 (the “REMIC 1 Regular Interests”):

	 	 	 	 	 	 	 	 	 
	 	 	Initial Principal	 	 
	Class Designation
	 	Balance
	 	Interest Rate

	LT1-I-1A
	 	$	14,120,997.86	 	 	 	(1	)
	LT1-I-1B
	 	$	14,120,997.86	 	 	 	(2	)
	LT1-I-2A
	 	$	13,640,972.49	 	 	 	(1	)
	LT1-I-2B
	 	$	13,640,972.49	 	 	 	(2	)
	LT1-I-3A
	 	$	13,177,366.94	 	 	 	(1	)
	LT1-I-3B
	 	$	13,177,366.94	 	 	 	(2	)
	LT1-I-4A
	 	$	12,729,616.31	 	 	 	(1	)
	LT1-I-4B
	 	$	12,729,616.31	 	 	 	(2	)
	LT1-I-5A
	 	$	12,297,175.16	 	 	 	(1	)
	LT1-I-5B
	 	$	12,297,175.16	 	 	 	(2	)
	LT1-I-6A
	 	$	11,879,516.97	 	 	 	(1	)
	LT1-I-6B
	 	$	11,879,516.97	 	 	 	(2	)
	LT1-I-7A
	 	$	11,476,133.40	 	 	 	(1	)
	LT1-I-7B
	 	$	11,476,133.40	 	 	 	(2	)
	LT1-I-8A
	 	$	11,086,533.67	 	 	 	(1	)
	LT1-I-8B
	 	$	11,086,533.67	 	 	 	(2	)
	LT1-I-9A
	 	$	10,710,243.99	 	 	 	(1	)
	LT1-I-9B
	 	$	10,710,243.99	 	 	 	(2	)
	LT1-I-10A
	 	$	10,346,806.91	 	 	 	(1	)
	LT1-I-10B
	 	$	10,346,806.91	 	 	 	(2	)
	LT1-I-11A
	 	$	9,995,780.82	 	 	 	(1	)
	LT1-I-11B
	 	$	9,995,780.82	 	 	 	(2	)
	LT1-I-12A
	 	$	9,656,739.32	 	 	 	(1	)
	LT1-I-12B
	 	$	9,656,739.32	 	 	 	(2	)
	LT1-I-13A
	 	$	9,329,270.78	 	 	 	(1	)
	LT1-I-13B
	 	$	9,329,270.78	 	 	 	(2	)
	LT1-I-14A
	 	$	9,012,977.77	 	 	 	(1	)
	LT1-I-14B
	 	$	9,012,977.77	 	 	 	(2	)
	LT1-I-15A
	 	$	8,707,476.57	 	 	 	(1	)
	LT1-I-15B
	 	$	8,707,476.57	 	 	 	(2	)
	LT1-I-16A
	 	$	8,412,396.72	 	 	 	(1	)
	LT1-I-16B
	 	$	8,412,396.72	 	 	 	(2	)
	LT1-I-17A
	 	$	8,127,380.53	 	 	 	(1	)
	LT1-I-17B
	 	$	8,127,380.53	 	 	 	(2	)
	LT1-I-18A
	 	$	7,852,082.69	 	 	 	(1	)
	LT1-I-18B
	 	$	7,852,082.69	 	 	 	(2	)
	LT1-I-19A
	 	$	7,586,169.76	 	 	 	(1	)
	LT1-I-19B
	 	$	7,586,169.76	 	 	 	(2	)

3

 

	 	 	 	 	 	 	 	 	 
	 	 	Initial Principal	 	 
	Class Designation
	 	Balance
	 	Interest Rate

	LT1-I-20A
	 	$	7,329,319.84	 	 	 	(1	)
	LT1-I-20B
	 	$	7,329,319.84	 	 	 	(2	)
	LT1-I-21A
	 	$	7,081,222.10	 	 	 	(1	)
	LT1-I-21B
	 	$	7,081,222.10	 	 	 	(2	)
	LT1-I-22A
	 	$	6,841,576.45	 	 	 	(1	)
	LT1-I-22B
	 	$	6,841,576.45	 	 	 	(2	)
	LT1-I-23A
	 	$	6,610,093.18	 	 	 	(1	)
	LT1-I-23B
	 	$	6,610,093.18	 	 	 	(2	)
	LT1-I-24A
	 	$	125,529,020.51	 	 	 	(1	)
	LT1-I-24B
	 	$	125,529,020.51	 	 	 	(2	)
	LT1-I-25A
	 	$	1,869,112.90	 	 	 	(1	)
	LT1-I-25B
	 	$	1,869,112.90	 	 	 	(2	)
	LT1-I-26A
	 	$	1,815,083.58	 	 	 	(1	)
	LT1-I-26B
	 	$	1,815,083.58	 	 	 	(2	)
	LT1-I-27A
	 	$	1,762,616.57	 	 	 	(1	)
	LT1-I-27B
	 	$	1,762,616.57	 	 	 	(2	)
	LT1-I-28A
	 	$	1,711,666.51	 	 	 	(1	)
	LT1-I-28B
	 	$	1,711,666.51	 	 	 	(2	)
	LT1-I-29A
	 	$	1,662,189.36	 	 	 	(1	)
	LT1-I-29B
	 	$	1,662,189.36	 	 	 	(2	)
	LT1-I-30A
	 	$	1,614,142.36	 	 	 	(1	)
	LT1-I-30B
	 	$	1,614,142.36	 	 	 	(2	)
	LT1-I-31A
	 	$	1,567,484.02	 	 	 	(1	)
	LT1-I-31B
	 	$	1,567,484.02	 	 	 	(2	)
	LT1-I-32A
	 	$	1,522,174.04	 	 	 	(1	)
	LT1-I-32B
	 	$	1,522,174.04	 	 	 	(2	)
	LT1-I-33A
	 	$	1,478,173.31	 	 	 	(1	)
	LT1-I-33B
	 	$	1,478,173.31	 	 	 	(2	)
	LT1-I-34A
	 	$	1,435,443.85	 	 	 	(1	)
	LT1-I-34B
	 	$	1,435,443.85	 	 	 	(2	)
	LT1-I-35A
	 	$	1,393,948.83	 	 	 	(1	)
	LT1-I-35B
	 	$	1,393,948.83	 	 	 	(2	)
	LT1-I-36A
	 	$	5,108,697.51	 	 	 	(1	)
	LT1-I-36B
	 	$	5,108,697.51	 	 	 	(2	)
	LT1-I-37A
	 	$	1,177,872.46	 	 	 	(1	)
	LT1-I-37B
	 	$	1,177,872.46	 	 	 	(2	)
	LT1-I-38A
	 	$	1,144,816.43	 	 	 	(1	)
	LT1-I-38B
	 	$	1,144,816.43	 	 	 	(2	)
	LT1-I-39A
	 	$	1,112,679.54	 	 	 	(1	)
	LT1-I-39B
	 	$	1,112,679.54	 	 	 	(2	)
	LT1-I-40A
	 	$	1,081,436.44	 	 	 	(1	)
	LT1-I-40B
	 	$	1,081,436.44	 	 	 	(2	)
	LT1-I-41A
	 	$	1,051,062.43	 	 	 	(1	)
	LT1-I-41B
	 	$	1,051,062.43	 	 	 	(2	)

4

 

	 	 	 	 	 	 	 	 	 
	 	 	Initial Principal	 	 
	Class Designation
	 	Balance
	 	Interest Rate

	LT1-I-42A
	 	$	1,021,533.49	 	 	 	(1	)
	LT1-I-42B
	 	$	1,021,533.49	 	 	 	(2	)
	LT1-I-43A
	 	$	992,826.28	 	 	 	(1	)
	LT1-I-43B
	 	$	992,826.28	 	 	 	(2	)
	LT1-I-44A
	 	$	964,918.09	 	 	 	(1	)
	LT1-I-44B
	 	$	964,918.09	 	 	 	(2	)
	LT1-I-45A
	 	$	937,786.86	 	 	 	(1	)
	LT1-I-45B
	 	$	937,786.86	 	 	 	(2	)
	LT1-I-46A
	 	$	911,411.08	 	 	 	(1	)
	LT1-I-46B
	 	$	911,411.08	 	 	 	(2	)
	LT1-I-47A
	 	$	885,769.89	 	 	 	(1	)
	LT1-I-47B
	 	$	885,769.89	 	 	 	(2	)
	LT1-I-48A
	 	$	860,842.96	 	 	 	(1	)
	LT1-I-48B
	 	$	860,842.96	 	 	 	(2	)
	LT1-I-49A
	 	$	836,610.55	 	 	 	(1	)
	LT1-I-49B
	 	$	836,610.55	 	 	 	(2	)
	LT1-I-50A
	 	$	813,053.45	 	 	 	(1	)
	LT1-I-50B
	 	$	813,053.45	 	 	 	(2	)
	LT1-I-51A
	 	$	790,152.97	 	 	 	(1	)
	LT1-I-51B
	 	$	790,152.97	 	 	 	(2	)
	LT1-I-52A
	 	$	767,890.95	 	 	 	(1	)
	LT1-I-52B
	 	$	767,890.95	 	 	 	(2	)
	LT1-I-53A
	 	$	746,249.73	 	 	 	(1	)
	LT1-I-53B
	 	$	746,249.73	 	 	 	(2	)
	LT1-I-54A
	 	$	725,212.12	 	 	 	(1	)
	LT1-I-54B
	 	$	725,212.12	 	 	 	(2	)
	LT1-I-55A
	 	$	704,761.41	 	 	 	(1	)
	LT1-I-55B
	 	$	704,761.41	 	 	 	(2	)
	LT1-I-56A
	 	$	684,881.36	 	 	 	(1	)
	LT1-I-56B
	 	$	684,881.36	 	 	 	(2	)
	LT1-I-57A
	 	$	665,556.16	 	 	 	(1	)
	LT1-I-57B
	 	$	665,556.16	 	 	 	(2	)
	LT1-I-58A
	 	$	646,770.45	 	 	 	(1	)
	LT1-I-58B
	 	$	646,770.45	 	 	 	(2	)
	LT1-I-59A
	 	$	628,509.29	 	 	 	(1	)
	LT1-I-59B
	 	$	628,509.29	 	 	 	(2	)
	LT1-I-60A
	 	$	611,016.70	 	 	 	(1	)
	LT1-I-60B
	 	$	611,016.70	 	 	 	(2	)
	LT1-I-61A
	 	$	593,748.72	 	 	 	(1	)
	LT1-I-61B
	 	$	593,748.72	 	 	 	(2	)
	LT1-I-62A
	 	$	576,963.36	 	 	 	(1	)
	LT1-I-62B
	 	$	576,963.36	 	 	 	(2	)
	LT1-I-63A
	 	$	560,647.23	 	 	 	(1	)
	LT1-I-63B
	 	$	560,647.23	 	 	 	(2	)

5

 

	 	 	 	 	 	 	 	 	 
	 	 	Initial Principal	 	 
	Class Designation
	 	Balance
	 	Interest Rate

	LT1-I-64A
	 	$	544,787.32	 	 	 	(1	)
	LT1-I-64B
	 	$	544,787.32	 	 	 	(2	)
	LT1-I-65A
	 	$	529,370.98	 	 	 	(1	)
	LT1-I-65B
	 	$	529,370.98	 	 	 	(2	)
	LT1-I-66A
	 	$	514,385.91	 	 	 	(1	)
	LT1-I-66B
	 	$	514,385.91	 	 	 	(2	)
	LT1-I-67A
	 	$	499,820.15	 	 	 	(1	)
	LT1-I-67B
	 	$	499,820.15	 	 	 	(2	)
	LT1-I-68A
	 	$	485,662.05	 	 	 	(1	)
	LT1-I-68B
	 	$	485,662.05	 	 	 	(2	)
	LT1-I-69A
	 	$	16,369,623.97	 	 	 	(1	)
	LT1-I-69B
	 	$	16,369,623.97	 	 	 	(2	)
	LT1-Pool
	 	$	2,095.55	 	 	 	(3	)
	LT1-R
	 	 	(4 )	 	 	 	(4	)

	(1)	 	This Lower Tier Interest shall bear interest at a per annum rate equal to
the weighted average Net Mortgage Rate of the Mortgage Loans multiplied by
2, subject to a maximum rate of 6.74%.

	(2)	 	This Lower Tier Interest shall bear interest at a per annum rate equal to
the excess, if any, of (i) 2 multiplied by the weighted average Net
Mortgage Rate of the Mortgage Loans over (ii) 6.74%.

	(3)	 	This Lower Tier Interest shall bear interest at a per annum rate equal to
the weighted average Net Mortgage Rate of the Mortgage Loans.

	(4)	 	The LT1-R interest shall not have a principal amount and shall not bear
interest. The LT1-R interest is hereby designated as the sole class of
residual interest in REMIC 1.

     On each Distribution Date, the Trustee shall first pay or charge as an
expense of REMIC 1 all expenses of the Trust for such Distribution Date other
than the Credit Risk Manager’s Fee.

     On each Distribution Date, interest distributable in respect of the
Mortgage Loans for such Distribution Date shall be deemed to be distributed to
the Lower Tier Interests in REMIC 1 at the rates shown above.

     On each Distribution Date, Realized Losses and payments of principal in
respect of the Mortgage Loans shall be allocated as follows:

	(i)	 	first, to the Class LT1-Pool Lower Tier Interest until the
principal balance of such Lower Tier Interest is reduced to zero;
and

	(ii)	 	second, to the outstanding Lower Tier Interest in REMIC 1
with the lowest numerical denomination until such interest is
reduced to zero, provided that, for Lower Tier Interests with the
same numerical denomination, such Realized Losses and payments of
principal shall be allocated pro rata between such Lower Tier
Interests.

6

 

     On each Distribution Date, the Trustee shall be deemed to have distributed
the Prepayment Penalties collected during the preceding Prepayment Period, in
the case of Principal Prepayments in full, or during the related Collection
Period, in the case of Principal Prepayments in part, to the Class LT1-I-69A
Lower Tier Interest.

REMIC 2:

     The following table sets forth the designations, principal balances and
interest rates for each interest in REMIC 2, each of which (other than the
Class LT2-R Lower Tier Interest) is hereby designated as a regular interest in
REMIC 2 (the “REMIC 2 Regular Interests”):

	 	 	 	 	 	 	 	 	 
	 	 	Initial Principal	 	 
	Class Designation
	 	Balance
	 	Interest Rate

	LT2-I-1A
	 	$	14,120,997.86	 	 	 	(1	)
	LT2-I-1B
	 	$	14,120,997.86	 	 	 	(2	)
	LT2-I-2A
	 	$	13,640,972.49	 	 	 	(1	)
	LT2-I-2B
	 	$	13,640,972.49	 	 	 	(2	)
	LT2-I-3A
	 	$	13,177,366.94	 	 	 	(1	)
	LT2-I-3B
	 	$	13,177,366.94	 	 	 	(2	)
	LT2-I-4A
	 	$	12,729,616.31	 	 	 	(1	)
	LT2-I-4B
	 	$	12,729,616.31	 	 	 	(2	)
	LT2-I-5A
	 	$	12,297,175.16	 	 	 	(1	)
	LT2-I-5B
	 	$	12,297,175.16	 	 	 	(2	)
	LT2-I-6A
	 	$	11,879,516.97	 	 	 	(1	)
	LT2-I-6B
	 	$	11,879,516.97	 	 	 	(2	)
	LT2-I-7A
	 	$	11,476,133.40	 	 	 	(1	)
	LT2-I-7B
	 	$	11,476,133.40	 	 	 	(2	)
	LT2-I-8A
	 	$	11,086,533.67	 	 	 	(1	)
	LT2-I-8B
	 	$	11,086,533.67	 	 	 	(2	)
	LT2-I-9A
	 	$	10,710,243.99	 	 	 	(1	)
	LT2-I-9B
	 	$	10,710,243.99	 	 	 	(2	)
	LT2-I-10A
	 	$	10,346,806.91	 	 	 	(1	)
	LT2-I-10B
	 	$	10,346,806.91	 	 	 	(2	)
	LT2-I-11A
	 	$	9,995,780.82	 	 	 	(1	)
	LT2-I-11B
	 	$	9,995,780.82	 	 	 	(2	)
	LT2-I-12A
	 	$	9,656,739.32	 	 	 	(1	)
	LT2-I-12B
	 	$	9,656,739.32	 	 	 	(2	)
	LT2-I-13A
	 	$	9,329,270.78	 	 	 	(1	)
	LT2-I-13B
	 	$	9,329,270.78	 	 	 	(2	)
	LT2-I-14A
	 	$	9,012,977.77	 	 	 	(1	)
	LT2-I-14B
	 	$	9,012,977.77	 	 	 	(2	)
	LT2-I-15A
	 	$	8,707,476.57	 	 	 	(1	)
	LT2-I-15B
	 	$	8,707,476.57	 	 	 	(2	)
	LT2-I-16A
	 	$	8,412,396.72	 	 	 	(1	)
	LT2-I-16B
	 	$	8,412,396.72	 	 	 	(2	)
	LT2-I-17A
	 	$	8,127,380.53	 	 	 	(1	)

7

 

	 	 	 	 	 	 	 	 	 
	 	 	Initial Principal	 	 
	Class Designation
	 	Balance
	 	Interest Rate

	LT2-I-17B
	 	$	8,127,380.53	 	 	 	(2	)
	LT2-I-18A
	 	$	7,852,082.69	 	 	 	(1	)
	LT2-I-18B
	 	$	7,852,082.69	 	 	 	(2	)
	LT2-I-19A
	 	$	7,586,169.76	 	 	 	(1	)
	LT2-I-19B
	 	$	7,586,169.76	 	 	 	(2	)
	LT2-I-20A
	 	$	7,329,319.84	 	 	 	(1	)
	LT2-I-20B
	 	$	7,329,319.84	 	 	 	(2	)
	LT2-I-21A
	 	$	7,081,222.10	 	 	 	(1	)
	LT2-I-21B
	 	$	7,081,222.10	 	 	 	(2	)
	LT2-I-22A
	 	$	6,841,576.45	 	 	 	(1	)
	LT2-I-22B
	 	$	6,841,576.45	 	 	 	(2	)
	LT2-I-23A
	 	$	6,610,093.18	 	 	 	(1	)
	LT2-I-23B
	 	$	6,610,093.18	 	 	 	(2	)
	LT2-I-24A
	 	$	125,529,020.51	 	 	 	(1	)
	LT2-I-24B
	 	$	125,529,020.51	 	 	 	(2	)
	LT2-I-25A
	 	$	1,869,112.90	 	 	 	(1	)
	LT2-I-25B
	 	$	1,869,112.90	 	 	 	(2	)
	LT2-I-26A
	 	$	1,815,083.58	 	 	 	(1	)
	LT2-I-26B
	 	$	1,815,083.58	 	 	 	(2	)
	LT2-I-27A
	 	$	1,762,616.57	 	 	 	(1	)
	LT2-I-27B
	 	$	1,762,616.57	 	 	 	(2	)
	LT2-I-28A
	 	$	1,711,666.51	 	 	 	(1	)
	LT2-I-28B
	 	$	1,711,666.51	 	 	 	(2	)
	LT2-I-29A
	 	$	1,662,189.36	 	 	 	(1	)
	LT2-I-29B
	 	$	1,662,189.36	 	 	 	(2	)
	LT2-I-30A
	 	$	1,614,142.36	 	 	 	(1	)
	LT2-I-30B
	 	$	1,614,142.36	 	 	 	(2	)
	LT2-I-31A
	 	$	1,567,484.02	 	 	 	(1	)
	LT2-I-31B
	 	$	1,567,484.02	 	 	 	(2	)
	LT2-I-32A
	 	$	1,522,174.04	 	 	 	(1	)
	LT2-I-32B
	 	$	1,522,174.04	 	 	 	(2	)
	LT2-I-33A
	 	$	1,478,173.31	 	 	 	(1	)
	LT2-I-33B
	 	$	1,478,173.31	 	 	 	(2	)
	LT2-I-34A
	 	$	1,435,443.85	 	 	 	(1	)
	LT2-I-34B
	 	$	1,435,443.85	 	 	 	(2	)
	LT2-I-35A
	 	$	1,393,948.83	 	 	 	(1	)
	LT2-I-35B
	 	$	1,393,948.83	 	 	 	(2	)
	LT2-I-36A
	 	$	5,108,697.51	 	 	 	(1	)
	LT2-I-36B
	 	$	5,108,697.51	 	 	 	(2	)
	LT2-I-37A
	 	$	1,177,872.46	 	 	 	(1	)
	LT2-I-37B
	 	$	1,177,872.46	 	 	 	(2	)
	LT2-I-38A
	 	$	1,144,816.43	 	 	 	(1	)
	LT2-I-38B
	 	$	1,144,816.43	 	 	 	(2	)
	LT2-I-39A
	 	$	1,112,679.54	 	 	 	(1	)

8

 

	 	 	 	 	 	 	 	 	 
	 	 	Initial Principal	 	 
	Class Designation
	 	Balance
	 	Interest Rate

	LT2-I-39B
	 	$	1,112,679.54	 	 	 	(2	)
	LT2-I-40A
	 	$	1,081,436.44	 	 	 	(1	)
	LT2-I-40B
	 	$	1,081,436.44	 	 	 	(2	)
	LT2-I-41A
	 	$	1,051,062.43	 	 	 	(1	)
	LT2-I-41B
	 	$	1,051,062.43	 	 	 	(2	)
	LT2-I-42A
	 	$	1,021,533.49	 	 	 	(1	)
	LT2-I-42B
	 	$	1,021,533.49	 	 	 	(2	)
	LT2-I-43A
	 	$	992,826.28	 	 	 	(1	)
	LT2-I-43B
	 	$	992,826.28	 	 	 	(2	)
	LT2-I-44A
	 	$	964,918.09	 	 	 	(1	)
	LT2-I-44B
	 	$	964,918.09	 	 	 	(2	)
	LT2-I-45A
	 	$	937,786.86	 	 	 	(1	)
	LT2-I-45B
	 	$	937,786.86	 	 	 	(2	)
	LT2-I-46A
	 	$	911,411.08	 	 	 	(1	)
	LT2-I-46B
	 	$	911,411.08	 	 	 	(2	)
	LT2-I-47A
	 	$	885,769.89	 	 	 	(1	)
	LT2-I-47B
	 	$	885,769.89	 	 	 	(2	)
	LT2-I-48A
	 	$	860,842.96	 	 	 	(1	)
	LT2-I-48B
	 	$	860,842.96	 	 	 	(2	)
	LT2-I-49A
	 	$	836,610.55	 	 	 	(1	)
	LT2-I-49B
	 	$	836,610.55	 	 	 	(2	)
	LT2-I-50A
	 	$	813,053.45	 	 	 	(1	)
	LT2-I-50B
	 	$	813,053.45	 	 	 	(2	)
	LT2-I-51A
	 	$	790,152.97	 	 	 	(1	)
	LT2-I-51B
	 	$	790,152.97	 	 	 	(2	)
	LT2-I-52A
	 	$	767,890.95	 	 	 	(1	)
	LT2-I-52B
	 	$	767,890.95	 	 	 	(2	)
	LT2-I-53A
	 	$	746,249.73	 	 	 	(1	)
	LT2-I-53B
	 	$	746,249.73	 	 	 	(2	)
	LT2-I-54A
	 	$	725,212.12	 	 	 	(1	)
	LT2-I-54B
	 	$	725,212.12	 	 	 	(2	)
	LT2-I-55A
	 	$	704,761.41	 	 	 	(1	)
	LT2-I-55B
	 	$	704,761.41	 	 	 	(2	)
	LT2-I-56A
	 	$	684,881.36	 	 	 	(1	)
	LT2-I-56B
	 	$	684,881.36	 	 	 	(2	)
	LT2-I-57A
	 	$	665,556.16	 	 	 	(1	)
	LT2-I-57B
	 	$	665,556.16	 	 	 	(2	)
	LT2-I-58A
	 	$	646,770.45	 	 	 	(1	)
	LT2-I-58B
	 	$	646,770.45	 	 	 	(2	)
	LT2-I-59A
	 	$	628,509.29	 	 	 	(1	)
	LT2-I-59B
	 	$	628,509.29	 	 	 	(2	)
	LT2-I-60A
	 	$	611,016.70	 	 	 	(1	)
	LT2-I-60B
	 	$	611,016.70	 	 	 	(2	)
	LT2-I-61A
	 	$	593,748.72	 	 	 	(1	)

9

 

	 	 	 	 	 	 	 	 	 
	 	 	Initial Principal	 	 
	Class Designation
	 	Balance
	 	Interest Rate

	LT2-I-61B
	 	$	593,748.72	 	 	 	(2	)
	LT2-I-62A
	 	$	576,963.36	 	 	 	(1	)
	LT2-I-62B
	 	$	576,963.36	 	 	 	(2	)
	LT2-I-63A
	 	$	560,647.23	 	 	 	(1	)
	LT2-I-63B
	 	$	560,647.23	 	 	 	(2	)
	LT2-I-64A
	 	$	544,787.32	 	 	 	(1	)
	LT2-I-64B
	 	$	544,787.32	 	 	 	(2	)
	LT2-I-65A
	 	$	529,370.98	 	 	 	(1	)
	LT2-I-65B
	 	$	529,370.98	 	 	 	(2	)
	LT2-I-66A
	 	$	514,385.91	 	 	 	(1	)
	LT2-I-66B
	 	$	514,385.91	 	 	 	(2	)
	LT2-I-67A
	 	$	499,820.15	 	 	 	(1	)
	LT2-I-67B
	 	$	499,820.15	 	 	 	(2	)
	LT2-I-68A
	 	$	485,662.05	 	 	 	(1	)
	LT2-I-68B
	 	$	485,662.05	 	 	 	(2	)
	LT2-I-69A
	 	$	16,369,623.97	 	 	 	(1	)
	LT2-I-69B
	 	$	16,369,623.97	 	 	 	(2	)
	LT2-I-1-IO
	 	 	(3	)	 	 	(3	)
	LT2-I-2-IO
	 	 	(4	)	 	 	(4	)
	LT2-I-3-IO
	 	 	(5	)	 	 	(5	)
	LT2-I-4-IO
	 	 	(6	)	 	 	(6	)
	LT2-I-5-IO
	 	 	(7	)	 	 	(7	)
	LT2-I-6-IO
	 	 	(8	)	 	 	(8	)
	LT2-I-7-IO
	 	 	(9	)	 	 	(9	)
	LT2-I-8-IO
	 	 	(10	)	 	 	(10	)
	LT2-I-9-IO
	 	 	(11	)	 	 	(11	)
	LT2-I-10-IO
	 	 	(12	)	 	 	(12	)
	LT2-I-11-IO
	 	 	(13	)	 	 	(13	)
	LT2-I-12-IO
	 	 	(14	)	 	 	(14	)
	LT2-I-13-IO
	 	 	(15	)	 	 	(15	)
	LT2-I-14-IO
	 	 	(16	)	 	 	(16	)
	LT2-I-15-IO
	 	 	(17	)	 	 	(17	)
	LT2-I-16-IO
	 	 	(18	)	 	 	(18	)
	LT2-I-17-IO
	 	 	(19	)	 	 	(19	)
	LT2-I-18-IO
	 	 	(20	)	 	 	(20	)
	LT2-I-19-IO
	 	 	(21	)	 	 	(21	)
	LT2-I-20-IO
	 	 	(22	)	 	 	(22	)
	LT2-I-21-IO
	 	 	(23	)	 	 	(23	)
	LT2-I-22-IO
	 	 	(24	)	 	 	(24	)
	LT2-I-23-IO
	 	 	(25	)	 	 	(25	)
	LT2-I-24-IO
	 	 	(26	)	 	 	(26	)
	LT2-I-25-IO
	 	 	(27	)	 	 	(27	)
	LT2-I-26-IO
	 	 	(28	)	 	 	(28	)
	LT2-I-27-IO
	 	 	(29	)	 	 	(29	)

10

 

	 	 	 	 	 	 	 	 	 
	 	 	Initial Principal	 	 
	Class Designation
	 	Balance
	 	Interest Rate

	LT2-I-28-IO
	 	 	(30	)	 	 	(30	)
	LT2-I-29-IO
	 	 	(31	)	 	 	(31	)
	LT2-I-30-IO
	 	 	(32	)	 	 	(32	)
	LT2-I-31-IO
	 	 	(33	)	 	 	(33	)
	LT2-I-32-IO
	 	 	(34	)	 	 	(34	)
	LT2-I-33-IO
	 	 	(35	)	 	 	(35	)
	LT2-I-34-IO
	 	 	(36	)	 	 	(36	)
	LT2-I-35-IO
	 	 	(37	)	 	 	(37	)
	LT2-I-36-IO
	 	 	(38	)	 	 	(38	)
	LT2-I-37-IO
	 	 	(39	)	 	 	(39	)
	LT2-I-38-IO
	 	 	(40	)	 	 	(40	)
	LT2-I-39-IO
	 	 	(41	)	 	 	(41	)
	LT2-I-40-IO
	 	 	(42	)	 	 	(42	)
	LT2-I-41-IO
	 	 	(43	)	 	 	(43	)
	LT2-I-42-IO
	 	 	(44	)	 	 	(44	)
	LT2-I-43-IO
	 	 	(45	)	 	 	(45	)
	LT2-I-44-IO
	 	 	(46	)	 	 	(46	)
	LT2-I-45-IO
	 	 	(47	)	 	 	(47	)
	LT2-I-46-IO
	 	 	(48	)	 	 	(48	)
	LT2-I-47-IO
	 	 	(49	)	 	 	(49	)
	LT2-I-48-IO
	 	 	(50	)	 	 	(50	)
	LT2-I-49-IO
	 	 	(51	)	 	 	(51	)
	LT2-I-50-IO
	 	 	(52	)	 	 	(52	)
	LT2-I-51-IO
	 	 	(53	)	 	 	(53	)
	LT2-I-52-IO
	 	 	(54	)	 	 	(54	)
	LT2-I-53-IO
	 	 	(55	)	 	 	(55	)
	LT2-I-54-IO
	 	 	(56	)	 	 	(56	)
	LT2-I-55-IO
	 	 	(57	)	 	 	(57	)
	LT2-I-56-IO
	 	 	(58	)	 	 	(58	)
	LT2-I-57-IO
	 	 	(59	)	 	 	(59	)
	LT2-I-58-IO
	 	 	(60	)	 	 	(60	)
	LT2-I-59-IO
	 	 	(61	)	 	 	(61	)
	LT2-I-60-IO
	 	 	(62	)	 	 	(62	)
	LT2-I-61-IO
	 	 	(63	)	 	 	(63	)
	LT2-I-62-IO
	 	 	(64	)	 	 	(64	)
	LT2-I-63-IO
	 	 	(65	)	 	 	(65	)
	LT2-I-64-IO
	 	 	(66	)	 	 	(66	)
	LT2-I-65-IO
	 	 	(67	)	 	 	(67	)
	LT2-I-66-IO
	 	 	(68	)	 	 	(68	)
	LT2-I-67-IO
	 	 	(69	)	 	 	(69	)
	LT2-I-68-IO
	 	 	(70	)	 	 	(70	)
	LT2-I-69-IO
	 	 	(71	)	 	 	(71	)
	LT2-Pool
	 	$	2,095.55	 	 	 	(72	)
	LT2-R
	 	 	(73	)	 	 	(73	)

11

 

	(1)	 	This Lower Tier Interest shall bear interest at a per annum rate equal to
the weighted average Net Mortgage Rate of the Mortgage Loans multiplied by
2, subject to a maximum rate of 6.74%, provided that, on each Distribution
Date on which interest is distributable on the Corresponding REMIC 2 IO
for this Lower Tier Interest, this interest shall bear interest at a per
annum rate equal to LIBOR multiplied by 2, computed on an actual/360 basis
and subject to a maximum rate equal to the lesser of (i) the weighted
average Net Mortgage Rate of the Mortgage Loans multiplied by 2 and (ii)
6.74%.

	(2)	 	This Lower Tier Interest shall bear interest at a per annum rate equal to
the excess, if any, of (i) 2 multiplied by the weighted average Net
Mortgage Rate of the Mortgage Loans over (ii) 6.74%.

	(3)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For the first Distribution Date, this Lower
Tier Interest shall be entitled to receive interest that accrues on the
Class LT1-I-1A Lower Tier Interest at a rate equal to the excess, if any,
of (i) the interest rate of the Class LT1-I-1A over (ii) 2 times LIBOR,
computed on an actual/360 basis.

	(4)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the first two Distribution
Dates, this Lower Tier Interest shall be entitled to receive interest that
accrues on the Class LT1-I-2A Lower Tier Interest at a rate equal to the
excess, if any, of (i) the interest rate of the Class LT1-I-2A over (ii) 2
times LIBOR, computed on an actual/360 basis.

	(5)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the first three Distribution
Dates, this Lower Tier Interest shall be entitled to receive interest that
accrues on the Class LT1-I-3A Lower Tier Interest at a rate equal to the
excess, if any, of (i) the interest rate of the Class LT1-I-3A over (ii) 2
times LIBOR, computed on an actual/360 basis.

	(6)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the four Distribution Dates,
this Lower Tier Interest shall be entitled to receive interest that
accrues on the Class LT1-I-4A Lower Tier Interest at a rate equal to the
excess, if any, of (i) the interest rate of the Class LT1-I-4A over (ii) 2
times LIBOR, computed on an actual/360 basis.

	(7)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the five Distribution Dates,
this Lower Tier Interest shall be entitled to receive interest that
accrues on the Class LT1-I-5A Lower Tier Interest at a rate equal to the
excess, if any, of (i) the interest rate of the Class LT1-I-5A over (ii) 2
times LIBOR, computed on an actual/360 basis.

	(8)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the six Distribution Dates,
this Lower Tier Interest shall be entitled to receive interest that
accrues on the Class LT1-I-6A Lower Tier Interest at a rate equal to the
excess, if any, of (i) the interest rate of the Class LT1-I-6A over (ii) 2
times LIBOR, computed on an actual/360 basis.

	(9)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the seven Distribution Dates,
this Lower Tier Interest shall be entitled to receive interest that
accrues on the Class LT1-I-7A Lower Tier Interest at a rate equal to the
excess, if any, of (i) the interest rate of the Class LT1-I-7A over (ii) 2
times LIBOR, computed on an actual/360 basis.

	(10)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the eight Distribution Dates,
this Lower Tier Interest shall be entitled to receive interest that
accrues on the Class LT1-I-8A Lower Tier Interest at a rate equal to the
excess, if any, of (i) the interest rate of the Class LT1-I-8A over (ii) 2
times LIBOR, computed on an actual/360 basis.

	(11)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the nine Distribution Dates,
this Lower Tier Interest shall be entitled to receive interest that
accrues

12

 

on the Class LT1-I-9A Lower Tier Interest at a rate equal to the excess,
if any, of (i) the interest rate of the Class LT1-I-9A over (ii) 2 times
LIBOR, computed on an actual/360 basis.

	(12)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 10 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-10A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-10A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(13)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 11 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-11A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-11A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(14)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 12 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-12A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-12A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(15)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 13 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-13A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-13A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(16)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 14 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-14A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-14A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(17)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 15 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-15A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-15A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(18)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 16 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-16A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-16A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(19)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 17 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-17A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-17A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(20)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 18 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-18A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-18A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(21)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 19 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-19A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-19A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(22)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 20 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues

13

 

on the Class LT1-I-20A Lower Tier Interest at a rate equal to the excess,
if any, of (i) the interest rate of the Class LT1-I-20A over (ii) 2 times
LIBOR, computed on an actual/360 basis.

	(23)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 21 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-21A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-21A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(24)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 22 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-22A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-22A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(25)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 23 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-23A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-23A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(26)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 24 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-24A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-24A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(27)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 25 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-25A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-25A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(28)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 26 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-26A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-26A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(29)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 27 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-27A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-27A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(30)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 28 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-28A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-28A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(31)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 29 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-29A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-29A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(32)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 30 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-30A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-30A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(33)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 31 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues

14

 

on the Class LT1-I-31A Lower Tier Interest at a rate equal to the excess,
if any, of (i) the interest rate of the Class LT1-I-31A over (ii) 2 times
LIBOR, computed on an actual/360 basis.

	(34)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 32 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-32A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-32A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(35)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 33 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-33A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-33A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(36)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 34 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-34A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-34A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(37)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 35 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-35A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-35A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(38)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 36 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-36A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-36A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(39)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 37 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-37A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-37A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(40)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 38 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-38A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-38A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(41)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 39 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-39A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-39A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(42)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 40 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-40A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-40A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(43)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 41 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-41A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-41A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(44)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 42 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues

15

 

on the Class LT1-I-42A Lower Tier Interest at a rate equal to the excess,
if any, of (i) the interest rate of the Class LT1-I-42A over (ii) 2 times
LIBOR, computed on an actual/360 basis.

	(45)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 43 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-43A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-43A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(46)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 44 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-44A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-44A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(47)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 45 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-45A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-45A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(48)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 46 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-46A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-46A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(49)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 47 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-47A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-47A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(50)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 48 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-48A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-48A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(51)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 49 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-49A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-49A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(52)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 50 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-50A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-50A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(53)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 51 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I -51A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I -51A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(54)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 52 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I -52A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I -52A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(55)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 53 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues

16

 

on the Class LT1-I -53A Lower Tier Interest at a rate equal to the
excess, if any, of (i) the interest rate of the Class LT1-I -53A over
(ii) 2 times LIBOR, computed on an actual/360 basis.

	(56)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 54 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I -54A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I -54A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(57)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 55 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-55A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-55A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(58)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 56 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-56A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-56A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(59)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 57 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-57A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-57A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(60)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 58 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-58A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-58A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(61)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 59 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-59A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-59A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(62)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 60 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-60A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-60A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(63)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 61 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-61A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-61A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(64)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 62 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-62A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-62A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(65)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 63 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-63A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-63A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(66)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 64 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues

17

 

on the Class LT1-I-64A Lower Tier Interest at a rate equal to the excess,
if any, of (i) the interest rate of the Class LT1-I-64A over (ii) 2 times
LIBOR, computed on an actual/360 basis.

	(67)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 65 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-65A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-65A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(68)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 66 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-66A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-66A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(69)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 67 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-67A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-67A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(70)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 68 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-68A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-68A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(71)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. For each of the 69 Distribution Dates, this
Lower Tier Interest shall be entitled to receive interest that accrues on
the Class LT1-I-69A Lower Tier Interest at a rate equal to the excess, if
any, of (i) the interest rate of the Class LT1-I-69A over (ii) 2 times
LIBOR, computed on an actual/360 basis.
	 
	(72)	 	The LT2-R Lower Tier Interest shall not have a principal amount and shall
not bear interest. The LT2-R Lower Tier Interest is hereby designated as
the sole class of residual interest in REMIC 2.

     On each Distribution Date, interest distributable in respect of the
Mortgage Loans for such Distribution Date shall be distributed to the Lower
Tier Interests in REMIC 2 at the rates shown above.

     On each Distribution Date, Realized Losses and payments of principal in
respect of the Mortgage Loans shall be allocated to the outstanding LT2-I Lower
Tier Interest with the lowest numerical denomination until such interest is
reduced to zero, provided that, for LT2-I Lower Tier Interests with the same
numerical denomination, such Realized Losses and payments of principal shall be
allocated pro rata between such Lower Tier Interests.

     On each Distribution Date, the Trustee shall be deemed to have distributed
the Prepayment Penalties collected during the preceding Prepayment Period, in
the case of Principal Prepayments in full, or during the related Collection
Period, in the case of Principal Prepayments in part, to the Class LT2-I-69A
Lower Tier Interest.

REMIC 3:

     The following table sets forth the designations, principal balances and
interest rates for each interest in REMIC 3, each of which (other than the
Class LT3-R interest) is hereby designated as a regular interest in REMIC 3
(the “REMIC 3 Regular Interests”):

18

 

	 	 	 	 	 	 	 	 	 
	REMIC 3	 	REMIC 3	 	 	 	 	 	Corresponding Class
	Lower Tier Class	 	Lower Tier	 	Initial Class	 	of Certificate(s)
	Designation
	 	Interest Rate
	 	Principal Amount
	 	or Component

	Class LT3-A1
	 	(1)	 	$	169,255,000.00	 	 	A1
	Class LT3-A2-A
	 	(1)	 	$	132,585,000.00	 	 	A2-A
	Class LT3-A2-B
	 	(1)	 	$	36,670,000.00	 	 	A2-B
	Class LT3-M1
	 	(1)	 	$	25,700,000.00	 	 	M1
	Class LT3-M2
	 	(1)	 	$	21,940,000.00	 	 	M2
	Class LT3-M3
	 	(1)	 	$	5,225,000.00	 	 	M3
	Class LT3-B1
	 	(1)	 	$	5,225,000.00	 	 	B1
	Class LT3-B2
	 	(1)	 	$	5,225,000.00	 	 	B2
	Class LT3-B3
	 	(1)	 	$	4,180,000.00	 	 	B3
	Class LT3-Q
	 	(1)	 	 	(2)	 	 	N/A
	Class LT3-I
	 	(3)	 	 	(3)	 	 	N/A
	Class LT3-R
	 	(4)	 	 	(4)	 	 	R

	(1)	 	The interest rate with respect to any Distribution Date (and the related
Accrual Period) for each of these REMIC 3 Lower Tier Interests is a per
annum rate equal to the weighted average of the interest rates of the
regular interests in REMIC 2 other than any such interest that is an
interest-only interest.
	 
	(2)	 	This Lower Tier Interest shall have an initial principal balance equal to
the excess of (i) the Pool Balance as of the Cut-Off Date over (ii) the
aggregate principal balance of remaining Lower Tier Interests in REMIC 3.
	 
	(3)	 	This Lower Tier Interest is an interest-only Lower Tier Interest and does
not have a principal balance. On each Distribution Date, this Lower Tier
Interest shall be entitled to receive all interest distributable on each
REMIC 2 Regular Interest with the term “IO” in its class designation.
	 
	(4)	 	The Class LT3-R interest is the sole class of residual interests in REMIC
3. It does not have an interest rate or a principal balance.

     On each Distribution Date, interest shall be deemed to have been
distributed with respect to each of the Lower Tier Interests in REMIC 3 based
on the above-described interest rates, provided, however, that interest that
accrues on the Class LT3-Q Lower Tier Interest shall be deemed to be deferred
to the extent necessary to make the principal distributions described below for
such Distribution Date. Any interest so deferred shall itself bear interest at
the interest rate for the Class LT3-Q Lower Tier Interest.

     On each Distribution Date, principal shall be deemed to have been
distributed (together with an amount equal to the interest deferred on the
Class LT3-Q Lower Tier Interest for such Distribution Date), and Realized
Losses shall be allocated, among the Lower Tier Interests in REMIC 3 in the
following order of priority:

(i) first, to the Class LT3-A1 Lower Tier Interest until the principal
balance equals one-half of the Class Principal Amount of the Class A1
Certificates immediately after such Distribution Date;

19

 

(ii) second, to the Class LT3-A2-A Lower Tier Interest until the
principal balance equals one-half of the Class Principal Amount of the
Class A2-A Certificates immediately after such Distribution Date;

(iii) third, to the Class LT3-A2-B Lower Tier Interest until the
principal balance equals one-half of the Class Principal Amount of the
Class A2-B Certificates immediately after such Distribution Date;

(iv) fourth, to the Class LT3-M1 Lower Tier Interest until the principal
balance equals one-half of the Class Principal Amount of the Class M1
Certificates immediately after such Distribution Date;

(v) fifth, to the Class LT3-M2 Lower Tier Interest until the principal
balance equals one-half of the Class Principal Amount of the Class M2
Certificates immediately after such Distribution Date;

(vi) sixth, to the Class LT3-M3 Lower Tier Interest until the principal
balance equals one-half of the Class Principal Amount of the Class M3
Certificates immediately after such Distribution Date;

(vii) seventh, to the Class LT3-B1 Lower Tier Interest until the
principal balance equals one-half of the Class Principal Amount of the
Class B1 Certificates immediately after such Distribution Date;

(viii) eighth, to the Class LT3-B2 Lower Tier Interest until the
principal balance equals one-half of the Class Principal Amount of the
Class B2 Certificates immediately after such Distribution Date;

(ix) ninth, to the Class LT3-B3 Lower Tier Interest until the principal
balance equals one-half of the Class Principal Amount of the Class B3
Certificates immediately after such Distribution Date; and

(x) finally, to the Class LT3-Q Lower Tier Interest, any remaining
amounts.

     On each Distribution Date, the Trustee shall be deemed to have distributed
the Prepayment Penalties collected during the preceding Prepayment Period, in
the case of Principal Prepayments in full, or during the related Collection
Period, in the case of Principal Prepayments in part, to the Class LT3-Q Lower
Tier Interest.

REMIC 4:

     The following table sets forth the designations, principal balances and
interest rates for each interest in REMIC 4, each of which (other than the
Class LT4-R interest) is hereby designated as a regular interest in REMIC 4
(the “REMIC 4 Regular Interests”):

20

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Corresponding
	 	 	 	 	 	 	 	 	 	 	Class of
	 	 	 	 	 	 	Initial Class	 	Certificate(s)
	Class Designation	 	Interest Rate
	 	Principal Amount
	 	or Component

	Class LT4-A1
	 	 	(1	)	 	$	338,510,000.00	 	 	 	A1	 
	Class LT4-A2-A
	 	 	(1	)	 	$	265,170,000.00	 	 	 	A2-A	 
	Class LT4-A2-B
	 	 	(1	)	 	$	73,340,000.00	 	 	 	A2-B	 
	Class LT4-M1
	 	 	(1	)	 	$	51,400,000.00	 	 	 	M1	 
	Class LT4-M2
	 	 	(1	)	 	$	43,880,000.00	 	 	 	M2	 
	Class LT4-M3
	 	 	(1	)	 	$	10,450,000.00	 	 	 	M3	 
	Class LT4-B1
	 	 	(1	)	 	$	10,450,000.00	 	 	 	B1	 
	Class LT4-B2
	 	 	(1	)	 	$	10,450,000.00	 	 	 	B2	 
	Class LT4-B3
	 	 	(1	)	 	$	8,360,000.00	 	 	 	B3	 
	Class LT4-P
	 	 	(1	)	 	$	100.00	 	 	 	P	 
	Class LT4-I
	 	 	(2	)	 	 	(2)	 	 	 	N/A	 
	Class LT4-X
	 	 	(3	)	 	 	(3)	 	 	 	X	 
	Class LT4- R
	 	 	(4	)	 	 	(4)	 	 	 	R	 

	(1)	 	This interest shall bear interest at the lesser of (i) the Interest Rate
(determined without regard to the Net Funds Cap) for the Corresponding
Class of Certificates for such interest and (ii) the weighted average of
the interest rates of the REMIC 3 Regular Interests other than the Class
LT3-I Lower Tier Interests, weighted on the principal balances of such
Lower Tier Interests (the “REMIC 4 Net WAC Rate”).

	(2)	 	This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date, this interest shall be entitled to
receive all interest distributable on the Class LT3-I Lower Tier Interest.
This interest shall be held as an asset of the Supplemental Interest
Trust.

	(3)	 	The Class X Certificate shall have an initial principal amount of
$23,824,564.10. The Class X Certificate also comprises a notional
component, which is also a regular interest in the Upper Tier REMIC. The
Class X Certificates have a notional principal balance that at all times
will equal the aggregate of the principal balances of the Class LT3-A1,
LT3-A2-A, LT3-A2-B, Class LT3-M1, Class LT3-M2, Class LT3-M3, Class
LT3-B1, Class LT3-B2, Class LT3-B3, and Class LT3-Q Lower Tier Interests
(i.e., the Pool Balance). For each Distribution Date (and the related
Accrual Period), the notional component shall bear interest at a rate
equal to the excess of (a) (i) the weighted average of the interest rates
on the Class LT3-A1, Class LT3-A2-A, Class LT3-A2-B, Class LT3-M1, Class
LT3-M2, Class LT3-M3, Class LT3-B1, Class LT3-B2, Class LT3-B3, and Class
LT3-Q Lower Tier Interests weighted on the basis of the principal balance
of each such Lower Tier Interest (i.e., the REMIC 4 Net WAC Rate), minus
(ii) the Credit Risk Manager’s Fee Rate, over (b) the Adjusted Lower Tier
WAC. For any Distribution Date, interest that accrues on the Class X
Certificates shall be deferred to the extent of any increase in the
Overcollateralization Amount on such date. Such deferred interest shall
not itself bear interest.

	(4)	 	The Class LT4-R interest is the sole class of residual interests in REMIC
4. It does not have an interest rate or a principal balance.

     On each Distribution Date, interest distributable in respect of the REMIC
3 Regular Interests for such Distribution Date shall be deemed to be
distributed to the interests in REMIC 4 at the rates shown above, provided that
the Class LT4-I interest shall be entitled to receive interest before any other
interest in REMIC 4.

21

 

     On each Distribution Date, all Realized Losses and all payments of
principal shall be allocated to the REMIC 4 Regular Interests until the
outstanding principal balance of each such interest equals the outstanding
principal balance of the Corresponding Class of Certificates for such interest
as of such Distribution Date.

     On each Distribution Date, the Trustee shall be deemed to have distributed
the Prepayment Penalties collected during the preceding Prepayment Period, in
the case of Principal Prepayments in full, or during the related Collection
Period, in the case of Principal Prepayments in part, to the Class LT4-P
interest.

Certificates:

     The following table sets forth (or describes) the Class designation,
Certificate Interest Rate, initial Class Principal Amount and minimum
denomination for each Class of Certificates comprising interests in the Trust
Fund created hereunder.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Class	 	Certificate Interest	 	Initial Class	 	Minimum
	 	Designation
	 	Rate
	 	Principal Amount
	 	Denomination

	 	Class A1	 	 	(1	)	 	$	338,510,000.00	 	 	$	25,000	 
	 	Class A2-A	 	 	(2	)	 	$	265,170,000.00	 	 	$	25,000	 
	 	Class A2-B	 	 	(3	)	 	$	73,340,000.00	 	 	$	25,000	 
	 	Class M1	 	 	(4	)	 	$	51,400,000.00	 	 	$	100,000	 
	 	Class M2	 	 	(5	)	 	$	43,880,000.00	 	 	$	100,000	 
	 	Class M3	 	 	(6	)	 	$	10,450,000.00	 	 	$	100,000	 
	 	Class B1	 	 	(7	)	 	$	10,450,000.00	 	 	$	100,000	 
	 	Class B2	 	 	(8	)	 	$	10,450,000.00	 	 	$	100,000	 
	 	Class B3	 	 	(9	)	 	$	8,360,000.00	 	 	$	100,000	 
	 	Class P	 	 	(10	)	 	$	100.00	 	 	 	(11	)
	 	Class X	 	 	(12	)	 	 	(12)	 	 	 	(11	)
	 	Class R	 	 	(13	)	 	 	(13)	 	 	 	(13	)

	(1)	 	The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class A1 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 0.360% and (ii) the Net Funds
Cap for such Distribution Date; provided that if the Mortgage Loans and
related property are not purchased pursuant to Section 8.1(a) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class A1 Certificates will be LIBOR plus 0.720%.
For purposes of the REMIC Provisions, Class A1 shall represent beneficial
ownership of the Class LT4-A1 Lower Tier Interest in REMIC 4. Any amount
distributed on Class A1 on any Distribution Date in excess of the amount
distributable on the LT4-A1 Lower Tier Interest on such Distribution Date
shall be treated as having been paid from the Basis Risk Reserve Fund or
Supplemental Interest Trust, as applicable, and any amount distributable
on the Class LT4-A1 Lower Tier Interest in REMIC 4 on such Distribution
Date in excess of the amount distributable on Class A1 on such
Distribution Date shall be treated as having been paid to the Supplemental
Interest Trust, all pursuant to and as further provided in Section 8.11(c)
hereof.
	 
	(2)	 	The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class A2-A Certificates is the per
annum rate equal to the lesser of (i) LIBOR plus 0.200% and (ii) the Net
Funds Cap for such Distribution Date; provided that if the Mortgage Loans
and related property are not purchased pursuant to Section 8.1(a) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class A2-A Certificates will be LIBOR plus
0.400%. For purposes of the REMIC Provisions, Class A2-A shall represent
beneficial ownership

22

 

	 	 	of the Class LT4-A2-A Lower Tier Interest in REMIC 4. Any amount
distributed on Class A2-A on any Distribution Date in excess of the
amount distributable on the LT4-A2-A Lower Tier Interest on such
Distribution Date shall be treated as having been paid from the Basis
Risk Reserve Fund or Supplemental Interest Trust, as applicable, and any
amount distributable on the Class LT4-A2-A Lower Tier Interest in REMIC 4
on such Distribution Date in excess of the amount distributable on Class
A2-A on such Distribution Date shall be treated as having been paid to
the Supplemental Interest Trust, all pursuant to and as further provided
in Section 8.11(c) hereof.
	 
	(3)	 	The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class A2-B Certificates is the per
annum rate equal to the lesser of (i) LIBOR plus 0.550% and (ii) the Net
Funds Cap for such Distribution Date; provided that if the Mortgage Loans
and related property are not purchased pursuant to Section 8.1(a) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class A2-B Certificates will be LIBOR plus
1.100%. For purposes of the REMIC Provisions, Class A2-B shall represent
beneficial ownership of the Class LT4-A2-B Lower Tier Interest in REMIC 4.
Any amount distributed on Class A2-B on any Distribution Date in excess
of the amount distributable on the LT4-A2-B Lower Tier Interest on such
Distribution Date shall be treated as having been paid from the Basis Risk
Reserve Fund or Supplemental Interest Trust, as applicable, and any amount
distributable on the Class LT4-A2-B Lower Tier Interest in REMIC 4 on such
Distribution Date in excess of the amount distributable on Class A2-B on
such Distribution Date shall be treated as having been paid to the
Supplemental Interest Trust, all pursuant to and as further provided in
Section 8.11(c) hereof.
	 
	(4)	 	The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class M1 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 0.600% and (ii) the Net Funds
Cap for such Distribution Date; provided that if the Mortgage Loans and
related property are not purchased pursuant to Section 8.1(a) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class M1 Certificates will be LIBOR plus 0.900%.
For purposes of the REMIC Provisions, Class M1 shall represent beneficial
ownership of the Class LT4-M1 Lower Tier Interest in REMIC 4. Any amount
distributed on Class M1 on any Distribution Date in excess of the amount
distributable on the LT4-M1 Lower Tier Interest on such Distribution Date
shall be treated as having been paid from the Basis Risk Reserve Fund or
Supplemental Interest Trust, as applicable, and any amount distributable
on the Class LT4-M1 Lower Tier Interest in REMIC 4 on such Distribution
Date in excess of the amount distributable on Class M1 on such
Distribution Date shall be treated as having been paid to the Supplemental
Interest Trust, all pursuant to and as further provided in Section 8.11(c)
hereof.
	 
	(5)	 	The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class M2 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 1.250% and (ii) the Net Funds
Cap for such Distribution Date; provided that if the Mortgage Loans and
related property are not purchased pursuant to Section 8.1(a) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class M2 Certificates will be LIBOR plus 1.875%.
For purposes of the REMIC Provisions, Class M2 shall represent beneficial
ownership of the Class LT4-M2 Lower Tier Interest in REMIC 4. Any amount
distributed on Class M2 on any Distribution Date in excess of the amount
distributable on the LT4-M2 Lower Tier Interest on such Distribution Date
shall be treated as having been paid from the Basis Risk Reserve Fund or
Supplemental Interest Trust, as applicable, and any amount distributable
on the Class LT4-M2 Lower Tier Interest in REMIC 4 on such Distribution
Date in excess of the amount distributable on Class M2 on such
Distribution Date shall be treated as having been paid to the Supplemental
Interest Trust, all pursuant to and as further provided in Section 8.11(c)
hereof.
	 
	(6)	 	The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class M3 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 1.400% and (ii) the Net Funds
Cap for such Distribution Date; provided that if the Mortgage Loans and
related property are not purchased pursuant to Section 8.1(a) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class M3 Certificates will be LIBOR plus 2.100%.
For purposes of the REMIC Provisions, Class M3 shall

23

 

	 	 	represent beneficial ownership of the Class LT4-M3 Lower Tier Interest in
REMIC 4. Any amount distributed on Class M3 on any Distribution Date in
excess of the amount distributable on the LT4-M3 Lower Tier Interest on
such Distribution Date shall be treated as having been paid from the
Basis Risk Reserve Fund or Supplemental Interest Trust, as applicable,
and any amount distributable on the Class LT4-M3 Lower Tier Interest in
REMIC 4 on such Distribution Date in excess of the amount distributable
on Class M3 on such Distribution Date shall be treated as having been
paid to the Supplemental Interest Trust, all pursuant to and as further
provided in Section 8.11(c) hereof.
	 
	(7)	 	The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class B1 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 1.900% and (ii) the Net Funds
Cap for such Distribution Date; provided that if the Mortgage Loans and
related property are not purchased pursuant to Section 8.1(a) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class B1 Certificates will be LIBOR plus 2.850%.
For purposes of the REMIC Provisions, Class B1 shall represent beneficial
ownership of the Class LT4-B1 Lower Tier Interest in REMIC 4. Any amount
distributed on Class B1 on any Distribution Date in excess of the amount
distributable on the LT4-B1 Lower Tier Interest on such Distribution Date
shall be treated as having been paid from the Basis Risk Reserve Fund or
Supplemental Interest Trust, as applicable, and any amount distributable
on the Class LT4-B1 Lower Tier Interest in REMIC 4 on such Distribution
Date in excess of the amount distributable on Class B1 on such
Distribution Date shall be treated as having been paid to the Supplemental
Interest Trust, all pursuant to and as further provided in Section 8.11(c)
hereof.
	 
	(8)	 	The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class B2 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 2.100% and (ii) the Net Funds
Cap for such Distribution Date; provided that if the Mortgage Loans and
related property are not purchased pursuant to Section 8.1(a) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class B2 Certificates will be LIBOR plus 3.150%.
For purposes of the REMIC Provisions, Class B2 shall represent beneficial
ownership of the Class LT4-B2 Lower Tier Interest in REMIC 4. Any amount
distributed on Class B2 on any Distribution Date in excess of the amount
distributable on the LT4-B2 Lower Tier Interest on such Distribution Date
shall be treated as having been paid from the Basis Risk Reserve Fund or
Supplemental Interest Trust, as applicable, and any amount distributable
on the Class LT4-B2 Lower Tier Interest in REMIC 4 on such Distribution
Date in excess of the amount distributable on Class B2 on such
Distribution Date shall be treated as having been paid to the Supplemental
Interest Trust, all pursuant to and as further provided in Section 8.11(c)
hereof.
	 
	(9)	 	The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class B3 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus 4.350% and (ii) the Net Funds
Cap for such Distribution Date; provided that if the Mortgage Loans and
related property are not purchased pursuant to Section 8.1(a) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class B3 Certificates will be LIBOR plus 6.525%.
For purposes of the REMIC Provisions, Class B3 shall represent beneficial
ownership of the Class LT4-B3 Lower Tier Interest in REMIC 4. Any amount
distributed on Class B3 on any Distribution Date in excess of the amount
distributable on the LT4-B3 Lower Tier Interest on such Distribution Date
shall be treated as having been paid from the Basis Risk Reserve Fund or
Supplemental Interest Trust, as applicable, and any amount distributable
on the Class LT4-B3 Lower Tier Interest in REMIC 4 on such Distribution
Date in excess of the amount distributable on Class B3 on such
Distribution Date shall be treated as having been paid to the Supplemental
Interest Trust, all pursuant to and as further provided in Section 8.11(c)
hereof.
	 
	(10)	 	The Class P Certificates will not bear interest at a stated rate but
shall entitle the Holder thereof to receive Prepayment Penalties paid with
respect to the Mortgage Loans as provided in Section 4.1(e).
	 
	(11)	 	The Class P and the Class X Certificates shall each be issued in minimum
Percentage Interests of 100%.

24

 

	(12)	 	For purposes of the REMIC Provisions, Class X shall represent (i)
beneficial ownership of the LT4-X Lower Tier Interest in REMIC 4; (ii)
beneficial ownership of the Basis Risk Reserve Fund; (iii) beneficial
ownership of the Supplemental Interest Trust, including the Swap
Agreement, and (iv) an interest in the notional principal contracts
provided in Section 8.11(c) hereof.
	 
	(13)	 	The Class R Certificates will be issued without a Certificate Principal
Amount and will not bear interest at a stated rate. The Class R
Certificates represent ownership of the residual interest in the Upper
Tier REMIC, as well as ownership of the Class LT1-R Lower Tier Interest.
The Class R Certificates shall be issued as two separate certificates, one
having a Percentage Interest of 99.99999% and the Tax Matters Person
Certificate having a Percentage Interest of 0.00001%.

     As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $835,834,564.10.

     In consideration of the mutual agreements herein contained, the Depositor,
the Seller, the Credit Risk Manager, the Seller and the Trustee hereby agree as
follows:

ARTICLE I

DEFINITIONS

     Section 1.1 Definitions. The following words and phrases, unless
the context otherwise requires, shall have the following meanings:

     Account: The Collection Account or the Distribution Account, as
the context may require.

     Accountant: A person engaged in the practice of accounting who
(except when this Agreement provides that an Accountant must be Independent)
may be employed by or affiliated with the Depositor or an Affiliate of the
Depositor.

     Accrual Period: With respect to any Distribution Date and any
Class of LIBOR Certificates, the period beginning on the Distribution Date in
the calendar month immediately preceding the month in which the related
Distribution Date occurs (or, in the case of the first Distribution Date,
beginning on the Closing Date) and ending on the day immediately preceding the
related Distribution Date. With respect to any Distribution Date and the Class
X Certificates and each Class of Lower Tier Interests, the calendar month
immediately preceding the month in which such Distribution Date occurs.

     Adjustable Rate Mortgage Loan: Any Mortgage Loan as to which the
related Mortgage Note provides for the adjustment of the Mortgage Rate
applicable thereto.

     Adjusted Lower Tier WAC: For any Accrual Period, the product of
(a) two, and (b) the weighted average of the interest rates on the Class LT3-Q,
Class LT3-A1, LT3-A2-A, LT3-A2-B, Class LT3-M1, Class LT3-M2, Class LT3-M3,
Class LT3-B1, Class LT3-B2 and Class LT3-B3 Interests determined for this
purpose by first subjecting the rate payable on the Class LT3-Q Interest to a
cap of zero, and subjecting the rate payable on each of the Class LT3-A1,
LT3-A2-A, LT3-A2-B, Class LT3-M1, Class LT3-M2, Class LT3-M3, Class LT3-B1,
Class LT3-B2 and Class LT3-B3 Interests to a cap that corresponds to the
Certificate Interest Rate for the

25

 

Corresponding Class of Certificates for such Accrual Period, provided
that the REMIC 4 Net WAC Rate shall be substituted for the Net Funds Cap in
determining the Certificate Interest Rate for each such Corresponding Class of
Certificates.

     Advance: An advance of the aggregate of payments of principal and
interest (net of the Servicing Fee) on one or more Mortgage Loans that were due
on a Due Date in the related Collection Period and not received as of the close
of business on the related Determination Date, required to be made by the
Servicer (or by the Trustee as successor servicer) pursuant to Section 3.19.

     Advance Facility: As defined in Section 3.20.

     Advance Facility Counterparty: As defined in Section 3.20.

     Advance Reimbursement Rights: As defined in Section 3.20.

     Adverse REMIC Event: Either (i) loss of status as a REMIC, within
the meaning of Section 860D of the Code, for any group of assets identified as
a REMIC in the Preliminary Statement to this Agreement, or (ii) imposition of
any tax, including the tax imposed under Section 860F(a)(1) on prohibited
transactions, and the tax imposed under Section 860G(d) on certain
contributions to a REMIC, on any REMIC created hereunder to the extent such tax
would be payable from assets held as part of the Trust Fund.

     Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, “control” when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

     Aggregate Expense Rate: With respect to any Mortgage Loan, the sum
of the Servicing Fee Rate, the Trustee Fee Rate and the applicable Insurance
Fee Rate, in the case of any Mortgage Loan covered by a Bulk PMI Policy.

     Aggregate Overcollateralization Release Amount: With respect to
any Distribution Date, the lesser of (x) the Principal Remittance Amount for
such Distribution Date and (y) the amount, if any, by which (i) the
Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the Principal Remittance Amount for such
Distribution Date is applied on such date in reduction of the aggregate of the
Certificate Principal Amounts of the Certificates, exceeds (ii) the Targeted
Overcollateralization Amount for such Distribution Date.

     Agreement: This Pooling and Servicing Agreement and all amendments
and supplements hereto.

     Anniversary Year: The one-year period beginning on the Closing
Date and ending on the first anniversary thereof, and each subsequent one-year
period beginning on the day after the end

26

 

of the preceding Anniversary Year and ending on next
succeeding anniversary of the Closing Date.

     Applied Loss Amount: With respect to any Distribution Date, the
amount, if any, by which (x) the aggregate Certificate Principal Amount of the
Certificates after giving effect to all distributions on such Distribution
Date, but before giving effect to any application of the Applied Loss Amount
with respect to such date, exceeds (y) the Pool Balance for such Distribution
Date.

     Appraised Value: With respect to any Mortgage Loan, the amount set
forth in an appraisal made in connection with the origination of such Mortgage
Loan as the value of the related Mortgaged Property.

     Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Trustee, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Mortgage Loans secured by Mortgaged Properties located
in the same jurisdiction, if permitted by law; provided, however, that neither
the Custodian nor the Trustee shall be responsible for determining whether any
such assignment is in recordable form.

     Authorized Officer: Any Person who may execute an Officer’s
Certificate on behalf of the Depositor.

     B1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event has not
occurred with respect to such Distribution Date, the amount, if any, by which
(x) the sum of (i) the aggregate Class Principal Amount of the Class A1, Class
A2-A, Class A2-B, Class M1, Class M2 and Class M3 Certificates, in each case
after giving effect to distributions on such Distribution Date, and (ii) the
Class Principal Amount of the Class B1 Certificates immediately prior to such
Distribution Date exceeds (y) the B1 Target Amount.

     B1 Target Amount: With respect to any Distribution Date, an amount
equal to the lesser of (a) the product of (i) 89.80% and (ii) the Pool Balance
for such Distribution Date and (b) the amount, if any, by which (i) the Pool
Balance for such Distribution Date exceeds (ii) 0.50% of the Cut-off Date
Balance.

     B2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event has not
occurred with respect to such Distribution Date, the amount, if any, by which
(x) the sum of (i) the aggregate Class Principal Amount of the Class A1, Class
A2-A, Class A2-B, Class M1, Class M2, Class M3 and Class B1 Certificates, in
each case after giving effect to distributions on such Distribution Date, and
(ii) the Class Principal Amount of the Class B2 Certificates immediately prior
to such Distribution Date exceeds (y) the B2 Target Amount.

     B2 Target Amount: With respect to any Distribution Date, an amount
equal to the lesser of (a) the product of (i) 92.30% and (ii) the Pool Balance
for such Distribution Date and (b) the

27

 

amount, if any, by which (i) the Pool Balance for such
Distribution Date exceeds (ii) 0.50% of the Cut-off Date Balance.

     B3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event has not
occurred with respect to such Distribution Date, the amount, if any, by which
(x) the sum of (i) the aggregate Class Principal Amount of the Class A1, Class
A2-A, Class A2-B, Class M1, Class M2, Class M3, Class B1 and Class B2
Certificates, in each case after giving effect to distributions on such
Distribution Date, and (ii) the Class Principal Amount of the Class B3
Certificates immediately prior to such Distribution Date exceeds (y) the B3
Target Amount.

     B3 Target Amount: With respect to any Distribution Date, an amount
equal to the lesser of (a) the product of (i) 94.30% and (ii) the Pool Balance
for such Distribution Date and (b) the amount, if any, by which (i) the Pool
Balance for such Distribution Date exceeds (ii) 0.50% of the Cut-off Date
Balance.

     Balloon Mortgage Loan: Any Mortgage Loan having an original term
to maturity that is shorter than its amortization schedule, and a final
Scheduled Payment that is disproportionately large in comparison to other
Scheduled Payments.

     Balloon Payment: The final Scheduled Payment in respect of a
Balloon Mortgage Loan.

     Bankruptcy: With respect to any Person, the making of an
assignment for the benefit of creditors, the filing of a voluntary petition in
bankruptcy, adjudication as a bankrupt or insolvent, the entry of an order for
relief in a bankruptcy or insolvency proceeding, the seeking of reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief, or seeking, consenting to or acquiescing in the appointment of a
trustee, receiver or liquidator, dissolution, or termination, as the case may
be, of such Person pursuant to the provisions of either the United States
Bankruptcy Code of 1986, as amended, or any other similar state laws.

     Bankruptcy Code: The United States Bankruptcy Code of 1986, as
amended.

     Basis Risk Payment: With respect to any Distribution Date, an
amount equal to the sum of (i) any Basis Risk Shortfall for such Distribution
Date, (ii) any Unpaid Basis Risk Shortfall for such Distribution Date and (iii)
any Required Reserve Fund Amount for such Distribution Date. The amount of the
Basis Risk Payment for any Distribution Date cannot exceed the amount of
Monthly Excess Cashflow otherwise available for distribution pursuant to
Section 4.1(d) of this Agreement.

     Basis Risk Reserve Fund: A fund created as part of the Trust Fund
pursuant to Section 4.6 of this Agreement but which is not an asset of any of
the REMICs.

     Basis Risk Shortfall: With respect to any Distribution Date and
any Class of LIBOR Certificates, the amount by which the amount of interest
calculated at the Certificate Interest Rate applicable to such Class for such
date, determined without regard to the Net Funds
Cap for such date but subject to a cap equal to the Maximum Interest Rate,
exceeds the amount of interest calculated at the Net Funds Cap.

28

 

     Book-Entry Certificates: Beneficial interests in Certificates
designated as “Book-Entry Certificates” in this Agreement, ownership and
transfers of which shall be evidenced or made through book entries by a
Depository; provided that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer permitted and Definitive
Certificates are to be issued to Certificate Owners, such Book-Entry
Certificates shall no longer be “Book-Entry Certificates.” As of the Closing
Date, the following Classes of Certificates constitute Book-Entry Certificates:
the Class A1, Class A2-A, Class A2-B, Class M1, Class M2, Class M3, Class B1,
Class B2 and Class B3 Certificates.

     Bulk PMI Policy: Not applicable.

     Business Day: Any day other than (i) a Saturday or a Sunday, (ii)
a day on which banking institutions in New York, New York or, if other than New
York, any city in which the Corporate Trust Office of the Trustee is located,
or (iii) the States of Arizona, California, Maryland, New Jersey, Colorado or
Texas are closed.

     Carryforward Interest: With respect to any Distribution Date and
each Class of Certificates (other than the Class X, Class P and Class R
Certificates), the sum of (i) the amount, if any, by which (x) the sum of (A)
Current Interest for such Class for the immediately preceding Distribution Date
and (B) any unpaid Carryforward Interest for such Class from previous
Distribution Dates exceeds (y) the amount distributed in respect of interest on
such Class on such immediately preceding Distribution Date, and (ii) interest
on such amount for the related Accrual Period at the applicable Certificate
Interest Rate.

     Certificate: Any one of the certificates executed by the Trustee
and authenticated by the Certificate Registrar in substantially the forms
attached hereto as Exhibit A.

     Certificate Interest Rate: With respect to each Class of
Certificates and any Distribution Date, the applicable per annum rate set forth
or described in the Preliminary Statement hereto.

     Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Depository, or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant, in accordance
with the rules of such Depository).

     Certificate Principal Amount: With respect to any Certificate
(other than the Class X, Class P and Class R Certificates), the initial
Certificate Principal Amount thereof on the Closing Date, less the amount of
all principal distributions previously distributed with respect to such
Certificate and, in the case of the Subordinate Certificates, any Applied Loss
Amount previously allocated to such Certificate; provided, however, that on
each Distribution Date on which a Subsequent Recovery is distributed, the
Certificate Principal Amount of any Subordinate Certificate whose Certificate
Principal Amount has previously been reduced by application of any Applied Loss
Amount shall be increased, in order of seniority, by an amount (to be applied
pro rata to all Certificates of such Class) equal to the lesser of (i) any
Deferred Amount for each such Class immediately prior to such Distribution Date
and (ii) the total amount of any Subsequent Recovery distributed on such
Distribution Date to Certificateholders, after application (for this purpose)
to any more senior Classes of Certificates. The Class X, Class P

29

 

and Class R
Certificates are issued without Certificate Principal Amounts. The Class P
Certificates are issued with an initial Class P Principal Amount of $100.

     Certificate Register and Certificate Registrar: The
register maintained and the registrar appointed pursuant to Section 5.2.

     Certificateholder: The meaning provided in the definition of
“Holder.”

     Certification: As defined in Section 8.12.

     Class: All Certificates and, in the case of REMIC 1, REMIC 2,
REMIC 3 and REMIC 4, all Lower Tier Interests, bearing the same class
designation.

     Class A Certificates: Collectively, the Class A1, Class A2-A and
Class A2-B Certificates.

     Class B Certificates: Collectively, the Class B1, Class B2 and
Class B3 Certificates.

     Class I Shortfalls: As defined in Section 8.11(c) hereof. For
purposes of clarity, the Class I Shortfall for any Distribution Date shall
equal the amount payable to the Swap Counterparty on such Distribution Date in
excess of the amount payable on the Class I interest in REMIC 4 on such
Distribution Date, all as further provided in Section 8.11(c) hereof.

     Class M Certificates: Collectively, the Class M1, Class M2 and
Class M3 Certificates.

     Class Notional Amount: Not applicable.

     Class P Principal Amount: As of the Closing Date, $100.00.

     Class Principal Amount: With respect to each Class of Certificates
other than the Class X, Class P and Class R Certificates, the aggregate of the
Certificate Principal Amounts of all Certificates of such Class at the date of
determination. With respect to the Class X, Class P and Class R Certificates,
zero.

     Class R Certificate: Each Class R Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A and evidencing the
ownership of the Class LT1-R Interest, Class LT2-R Interest, Class LT3-R
Interest and the residual interest in the Upper Tier REMIC.

     Class X Distributable Amount: With respect to any Distribution
Date, the amount of interest that has accrued on the Class X Notional Balance,
as described in the Preliminary Statement, but that has not been distributed
prior to such date. In addition, such
amount shall include the initial Overcollateralization Amount of
$23,824,564.10 (less $100 of such amount allocated to the Class P Certificates)
to the extent such amount has not been distributed on an earlier Distribution
Date as part of the Aggregate Overcollateralization Release Amount.

     Class X Notional Balance: With respect to any Distribution Date
(and the related Accrual Period) the aggregate principal balance of the Class
LT3-A1, LT3-A2-A, LT3-A2-B,

30

 

Class LT3-M1, Class LT3-M2, Class LT3-M3, Class
LT3-B1, Class LT3-B2, Class LT3-B3, Class LT3-P and Class LT3-Q Interests in
REMIC 3.

     Closing Date: July 2, 2004.

     Code: The Internal Revenue Code of 1986, as amended, and as it may
be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.

     Collection Account: The separate Eligible Account or Accounts
established and maintained by the Servicer pursuant to Section 3.5 hereof.

     Collection Period: With respect to any Distribution Date, the
period commencing on the second day of the month immediately preceding the
month in which such Distribution Date occurs and ending on the first day of the
month in which such Distribution Date occurs.

     Commission: The United States Securities and Exchange Commission.

     Compensating Interest: With respect to any Distribution Date and
any Principal Prepayment in full in respect of a Mortgage Loan that is received
during the period from the first day of the related Prepayment Period through
the last day of the calendar month immediately preceding such Distribution
Date, an additional payment made by the Servicer, to the extent funds are
available from the total Servicing Fee, payable for such Distribution Date,
equal to the amount of interest at the Mortgage Rate (less the applicable
Servicing Fee Rate) for that Mortgage Loan from the date of the prepayment
through the last day of the calendar month immediately preceding such
Distribution Date. For the avoidance of doubt, no Compensating Interest
payment shall be required in connection with any shortfalls resulting from
Principal Prepayments in part or the application of the Relief Act.

     Conventional Loan: A Mortgage Loan that is not insured by the
United States Federal Housing Administration or guaranteed by the United States
Department of Veterans Affairs.

     Conventional Loan Documents: None.

     Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.

     Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares
and a Proprietary Lease.

     Cooperative Property: The real property and improvements owned by
the Cooperative Corporation, including the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.

     Cooperative Shares: Shares issued by a Cooperative Corporation.

31

 

     Cooperative Unit: A single-family dwelling located in a
Cooperative Property.

     Corporate Trust Office: For purposes of Certificate transfers and
surrender is located at Wells Fargo Bank, N.A., Sixth Street and Marquette
Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services
(AEGIS 2004-3) and for all other purposes is located at Wells Fargo Bank, N.A.,
P.O. Box 98, Columbia, Maryland 21046, Attention: Corporate Trust Services
(AEGIS 2004-3) or for overnight deliveries, at 9062 Old Annapolis Road,
Columbia, Maryland 21045-1951, Attention: Corporate Trust Services (AEGIS
2004-3).

     Corresponding Class: The Class of Certificates that corresponds to
a class of interests in REMIC 3 or REMIC 4, as provided in the Preliminary
Statement.

     Corresponding REMIC 2 IO: The interest-only Lower Tier Interest in
REMIC 2 with the same numerical class designation.

     Credit Risk Management Agreement: The Credit Risk Management
Agreement dated as of the Closing Date, entered into by the Servicer and the
Credit Risk Manager, in the form of Exhibit N attached hereto.

     Credit Risk Manager: The Murrayhill Company, a Colorado
corporation, and its successors and assigns.

     Credit Risk Manager’s Fee: With respect to any Distribution Date
and each Mortgage Loan, an amount equal to the product of (a) one twelfth, (b)
the Credit Risk Manager’s Fee Rate and (c) the Scheduled Principal Balance of
such Mortgage Loan as of the first day of the related Collection Period.

     Credit Risk Manager’s Fee Rate: 0.015% per annum.

     Cumulative Realized Losses: As of any date of determination, the
aggregate amount of Realized Losses with respect to the Mortgage Loans.

     Current Interest: With respect to each Class of Certificates
(other than the Class X, Class P and Class R Certificates) and any Distribution
Date, the aggregate amount of interest accrued at the applicable Certificate
Interest Rate during the related Accrual Period on the Class Principal Amount
(or Class Notional Amount) of such Class immediately prior to such Distribution
Date.

     Custodian: Wells Fargo Bank, N.A. or any successor thereto.

     Cut-off Date: June 1, 2004.

     Cut-off Date Balance: The Pool Balance as of the Cut-off Date.

     Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of
principal.

32

 

     Deferred Amount: With respect to any Distribution Date and each
Class of Subordinate Certificates, the amount by which (x) the aggregate of
Applied Loss Amounts previously applied in reduction of the Class Principal
Amount thereof exceeds (y) the sum of (i) the aggregate of amounts previously
reimbursed in respect thereof and (ii) the amount by which the Class Principal
Amount of such Class has been increased due to any Subsequent Recovery.

     Deficient Valuation: With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent
jurisdiction in an amount less than the then outstanding principal balance of
the Mortgage Loan, which valuation results from a proceeding initiated under
the Bankruptcy Code.

     Definitive Certificate: A Certificate of any Class issued in
definitive, fully registered, certificated form.

     Deleted Mortgage Loan: A Mortgage Loan that is repurchased from
the Trust Fund pursuant to the terms hereof or as to which one or more
Qualified Substitute Mortgage Loans are substituted therefor.

     Delinquency Event: With respect to any Distribution Date, a
“Delinquency Event” shall occur if the Rolling Three Month Delinquency Rate as
of the last day of the immediately preceding calendar month equals or exceeds
43% of the Senior Enhancement Percentage for such Distribution Date.

     Delinquency Rate: With respect to any calendar month, the
fraction, expressed as a percentage, the numerator of which is the aggregate
outstanding principal balance of all Mortgage Loans 60 days Delinquent or more
(including all foreclosures, bankruptcies and REO Properties) as of the close
of business on the last day of such month, and the denominator of which is the
Pool Balance as of the close of business on the last day of such month.

     Delinquent: For reporting purposes, a Mortgage Loan is
“delinquent” when any payment contractually due thereon has not been made by
the close of business on the Due Date therefor. Such Mortgage Loan is “30 days
Delinquent” if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was first due, or, if there is no such corresponding day (e.g., as
when a 30-day month follows a 31-day month in which a payment was due on the
31st day of such month), then on the last day of such immediately succeeding
month. Similarly for “60 days
Delinquent” and the second immediately succeeding month and “90 days
Delinquent” and the third immediately succeeding month.

     Depositor: Aegis Asset Backed Securities Corporation, a Delaware
corporation having its principal place of business at 3250 Briarpark, Suite
400, Houston, Texas 77042, or its successors in interest.

     Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is Cede & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a “clearing
corporation” as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.

33

 

     Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.

     Determination Date: With respect to each Distribution Date, the
18th day of the month in which such Distribution Date occurs, or, if such 18th
day is not a Business Day, the next preceding Business Day.

     Disqualified Organization: A “disqualified organization” as
defined in Section 860E(e)(5) of the Code.

     Distressed Mortgage Loan: Any Mortgage Loan that at the date of
determination is Delinquent in payment for a period of more than 90 days
without giving effect to any grace period permitted by the related Mortgage
Note or for which the Servicer or the Trustee has accepted a deed in lieu of
foreclosure.

     Distribution Account: The separate Eligible Account established
and maintained by the Trustee in accordance with the provisions of Section
3.5(d).

     Distribution Date: The 25th day of each month or, if such 25th day
is not a Business Day, the next succeeding Business Day, commencing in July
2004.

     Due Date: With respect to any Mortgage Loan, the date on which a
Scheduled Payment is due under the related Mortgage Note.

     Eligible Account: Either (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company that
complies with the definition of Eligible Institution or (ii) an account or
accounts the deposits in which are insured by the FDIC to the limits
established by such corporation, provided that any such deposits not so insured
shall be maintained in an account at a depository institution or trust company
whose commercial paper or other short term debt obligations (or, in the case of
a depository institution or trust company which is the principal subsidiary of
a holding company, the commercial paper or other short term debt or deposit
obligations of such holding company or depository institution, as the case may
be) have been rated by each Rating Agency in its highest short-term rating
category, or (iii) a segregated trust account or accounts (which shall be a
“special deposit account”) maintained
with the Trustee or any other federal or state chartered depository
institution or trust company, acting in its fiduciary capacity, in a manner
acceptable to the Trustee, the NIMS Insurer, if any, and the Rating Agencies.
Eligible Accounts may bear interest.

     Eligible Institution: Any of the following:

     (i) an institution whose:

     (a) commercial paper, short-term debt obligations, or other
short-term deposits are rated at least “A-1+” or long-term
unsecured debt obligations are rated at least “AA-” by S&P (and the
equivalent ratings by the other Rating

34

 

Agencies if rated by such
Rating Agencies), if the amounts on deposit are to be held in the
account for no more than 365 days; or

     (b) commercial paper, short-term debt obligations, demand
deposits, or other short-term deposits are rated at least “A-2” by
S&P (and the equivalent ratings by the other Rating Agencies if
rated by such Rating Agencies), if the amounts on deposit are to be
held in the account for no more than 30 days and are not intended
to be used as credit enhancement. Upon the loss of the required
rating set forth in this clause (i), the accounts shall be
transferred immediately to accounts which have the required rating.
Furthermore, commingling by the Servicer is acceptable at the A-2
rating level if the Servicer is a bank, thrift or depository and
provided the Servicer has the capability to immediately segregate
funds and commence remittance to an Eligible Account upon a
downgrade; or

     (ii) the corporate trust department of a federally- or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of
Federal Regulation Section 9.10(b), which, in either case, has corporate
trust powers and is acting in its fiduciary capacity.

     Eligible Investments: Any one or more of the following obligations
or securities:

     (i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America
or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America (“Direct Obligations”);

     (ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers’ acceptances issued by, any depository
institution or trust company (including U.S. subsidiaries of foreign
depositories and the Trustee or any agent of the Trustee, acting in its
respective commercial capacity) incorporated or organized under the laws
of the United States of America or any state thereof and subject to
supervision and examination by federal or state banking authorities, so
long as at the time of investment or the contractual commitment providing
for such investment the commercial paper or other short-term debt
obligations of such depository institution or trust company (or, in the
case of a depository institution or trust company which is the principal
subsidiary of a
holding company, the commercial paper or other short-term debt or
deposit obligations of such holding company or deposit institution, as
the case may be) have been rated by each Rating Agency in its highest
short-term rating category or one of its two highest long-term rating
categories;

     (iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by GNMA, FNMA or FHLMC with any registered
broker/dealer subject to Securities Investors’ Protection Corporation
jurisdiction or any commercial bank insured by the FDIC, if such
broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;

35

 

     (iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof which have a credit rating from each Rating Agency,
at the time of investment or the contractual commitment providing for
such investment, at least equal to one of the two highest long-term
credit rating categories of each Rating Agency; provided, however, that
securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation and
held as part of the Trust Fund to exceed 20% of the sum of the Pool
Balance and the aggregate principal amount of all Eligible Investments in
the Distribution Account; provided, further, that such securities will
not be Eligible Investments if they are published as being under review
with negative implications from any Rating Agency;

     (v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 180 days after the date of issuance thereof)
rated by each Rating Agency in its highest short-term rating category;

     (vi) a Qualified GIC;

     (vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States
of America) held by a custodian in safekeeping on behalf of the holders
of such receipts; and

     (viii) any other demand, money market, common trust fund or time
deposit or obligation, or interest-bearing or other security or
investment (including those managed or advised by the Trustee or any
Affiliate thereof), (A) rated in the highest rating category by each
Rating Agency (other than Fitch) or (B) otherwise approved in writing by
each Rating Agency of any of the Certificates or the NIM Securities.
Such investments in this subsection (viii) may include money market
mutual funds or common trust funds, including any fund for which Wells
Fargo Bank, N.A. in its capacity other than as Trustee (the “Bank”), the
Trustee, the Servicer, the NIMS Insurer, if any, or an affiliate thereof
serves as an investment advisor, administrator, shareholder servicing
agent, and/or custodian or subcustodian, notwithstanding that (x) the
Bank, the Trustee, the
Servicer, the NIMS Insurer, if any, or any affiliate thereof charges
and collects fees and expenses from such funds for services rendered, (y)
the Bank, the Trustee, the Servicer, the NIMS Insurer, if any, or any
affiliate thereof charges and collects fees and expenses for services
rendered pursuant to this Agreement, and (z) services performed for such
funds and pursuant to this Agreement may converge at any time. The
Trustee specifically authorizes the Bank or an affiliate thereof to
charge and collect from the Trustee such fees as are collected from all
investors in such funds for services rendered to such funds (but not to
exceed investment earnings thereon);

provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations

36

 

underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, provided that any such
investment will be a “permitted investment” within the meaning of Section
860G(a)(5) of the Code.

     ERISA: The Employee Retirement Income Security Act of 1974, as
amended.

     ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of an
Underwriter’s Exemption.

     ERISA-Restricted Certificate: Any Class X, Class P or Class R
Certificate, and any other Certificate with a rating below the lowest
applicable rating permitted under the Underwriter’s Exemption.

     ERISA-Restricted Swap Certificate: Any Class A, Class M or Class B
Certificate.

     Escrow Account: Any account established and maintained by the
Servicer pursuant to Section 3.6(a).

     Euroclear: Euroclear Bank, S.A./N.V., as operator of the Euroclear
System.

     Event of Default: Any one of the events, conditions or
circumstances enumerated in Section 7.1.

     Excess Proceeds: With respect to any Liquidated Mortgage Loan and
the Distribution Date immediately following the Prepayment Period in which such
Mortgage Loan became a Liquidated Mortgage Loan, the amount, if any, by which
the sum of any Liquidation Proceeds in respect of such Mortgage Loan received
during such Prepayment Period, net of (a) any amounts previously reimbursed to
the Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan
pursuant to Section 3.8(a)(iii) and (b) any Subsequent Recovery, exceeds the
sum of (i) the unpaid principal balance of such Liquidated Mortgage Loan as of
the Due Date in the month in which such Mortgage Loan became a Liquidated
Mortgage Loan, (ii) accrued interest at the Mortgage Rate from the Due Date as
to which interest was last paid or
advanced (and not reimbursed) to Certificateholders up to the Due Date
applicable to the Distribution Date immediately following the Prepayment Period
during which such liquidation occurred and (iii) amounts required to be repaid
to the related Mortgagor.

     Exchange Act: The Securities Exchange Act of 1934, as amended.

     FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.

     FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.

     Final Scheduled Distribution Date: With respect to each Class of
Certificates, the Distribution Date occurring in September 2034.

37

 

     Fitch: Fitch, Inc., or any successor in interest.

     Fixed Rate Mortgage Loan: Any Mortgage Loan as to which the
related Mortgage Note provides for a fixed rate of interest throughout the term
of such Note.

     FNMA: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.

     Global Securities: The global certificates representing the
Book-Entry Certificates.

     GNMA: The Government National Mortgage Association, a wholly owned
corporate instrumentality of the United States within HUD.

     Holder or Certificateholder: The registered owner of any
Certificate as recorded on the books of the Certificate Registrar except that,
solely for the purposes of taking any action or giving any consent pursuant to
this Agreement, any Certificate registered in the name of the Depositor, the
Trustee, the Servicer, the Credit Risk Manager, or any Affiliate thereof shall
be deemed not to be outstanding in determining whether the requisite percentage
necessary to effect any such consent has been obtained, except that, in
determining whether the Trustee shall be protected in relying upon any such
consent, only Certificates which a Responsible Officer of the Trustee knows to
be so owned shall be disregarded. The Trustee and the NIMS Insurer may request
and conclusively rely on certifications by the Depositor, the Servicer or the
Credit Risk Manager in determining whether any Certificates are registered to
an Affiliate of the Depositor, the Servicer or the Credit Risk Manager.

     HUD: The United States Department of Housing and Urban
Development, or any successor thereto.

     Independent: When used with respect to any Accountants, a Person
who is “independent” within the meaning of Rule 2-01(b) of the Commission’s
Regulation S-X. When used with respect to any other Person, a Person who (a)
is in fact independent of another
specified Person and any Affiliate of such other Person, (b) does not have
any material direct financial interest in such other Person or any Affiliate of
such other Person, and (c) is not connected with such other Person or any
Affiliate of such other Person as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions.

     Index: The index specified in the related Mortgage Note for
calculation of the Mortgage Rate thereof.

     Initial LIBOR Rate: 1.36875%.

     Initial Optional Purchase Date: The Distribution Date following
the month in which the Pool Balance is less than 10.0% of the Cut-off Date
Balance.

     Insurance Fee Rate: Not applicable.

38

 

     Insurance Policy: Any Primary Mortgage Insurance Policy (whether
obtained by the Mortgagor, the lender, the originator or the Depositor on
behalf of the Trust Fund), any standard hazard insurance policy, flood
insurance policy, earthquake insurance policy or title insurance policy
relating to the Mortgage Loans or the Mortgaged Properties, to be in effect as
of the Closing Date or thereafter during the term of this Agreement.

     Insurance Proceeds: Amounts paid by the insurer under any
Insurance Policy, other than amounts (i) to cover expenses incurred by the
Servicer in connection with procuring such proceeds, (ii) to be applied to
restoration or repair of the related Mortgaged Property or (iii) required to be
paid over to the Mortgagor pursuant to law or the related Mortgage Note.

     Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy.

     Interest Remittance Amount: With respect to any Distribution Date,
(a) the sum of (i) all interest collected (other than Payaheads and Prepayment
Penalties) or advanced in respect of Scheduled Payments on the Mortgage Loans
during the related Collection Period minus (x) any PMI Insurance Premium for
such Distribution Date and any state taxes imposed on such premium, (y) the
Servicing Fee with respect to such Mortgage Loans and (z) previously
unreimbursed Advances due to the Servicer or the Trustee to the extent
allocable to interest and the allocable portion of previously unreimbursed
Servicing Advances, (ii) any Compensating Interest Payments with respect to the
related Prepayment Period, (iii) the portion of any Purchase Price or
Substitution Adjustment Amount paid during the related Prepayment Period, to
the extent allocable to interest, and (iv) all Net Liquidation Proceeds,
Insurance Proceeds and any other recoveries collected with respect to the
Mortgage Loans during the related Prepayment Period, to the extent allocable to
interest, as reduced (but not below zero) by (b) (i) any costs, expenses or
liabilities reimbursable to the Servicer or the Trustee to the extent provided
in this Agreement and not reimbursed pursuant to clause (a) above (provided,
however, that in the case of the Trustee, such reimbursable amounts from the
Interest Remittance Amount and the Principal Remittance Amount may not exceed
$200,000 in the aggregate during any Anniversary Year; provided, further, that
in the event that the Trustee incurs reimbursable amounts in excess of
$200,000, it may seek reimbursement from the Interest Remittance Amount for
such amounts
in subsequent Anniversary Years, but in no event shall the Interest
Remittance Amount and the Principal Remittance Amount in the aggregate be
reduced in respect of reimbursements to the Trustee in excess of $200,000 per
Anniversary Year; and provided, further, that notwithstanding the foregoing,
costs and expenses incurred by the Trustee pursuant to Section 7.1 in
connection with any transfer of servicing shall be excluded from the $200,000
per Anniversary Year limit on reimbursable amounts), (ii) any Net Swap Payment
deposited in the Supplemental Interest Trust for payment to the Swap
Counterparty and (iii) any Swap Termination Payment deposited in the
Supplemental Interest Trust for payment to the Swap Counterparty.

     Intervening Assignments: The original intervening assignments of
the Mortgage, notices of transfer or equivalent instrument.

     Junior Lien Mortgage Loan: Any Mortgage Loan that is secured by a
junior lien on the related Mortgaged Property.

39

 

     Latest Possible Maturity Date: The Distribution Date occurring in
March 2037.

     LIBOR: With respect to the first Accrual Period, the Initial LIBOR
Rate. With respect to each subsequent Accrual Period, a per annum rate
determined on the LIBOR Determination Date in the following manner by the
Trustee on the basis of the “Interest Settlement Rate” set by the British
Bankers’ Association (the “BBA”) for one-month United States dollar deposits,
as such rates appear on the Telerate Page 3750, as of 11:00 a.m. (London time)
on such LIBOR Determination Date.

     If on such a LIBOR Determination Date, the BBA’s Interest Settlement Rate
does not appear on the Telerate Page 3750 as of 11:00 a.m. (London time), or if
the Telerate Page 3750 is not available on such date, the Trustee will obtain
such rate from Reuters’ “page LIBOR 01” or Bloomberg’s page “BBAM.” If such
rate is not published for such LIBOR Determination Date, LIBOR for such date
will be the most recently published Interest Settlement Rate. In the event
that the BBA no longer sets an Interest Settlement Rate, the Trustee will
designate an alternative index that has performed, or that the Trustee expects
to perform, in a manner substantially similar to the BBA’s Interest Settlement
Rate. The Trustee will select a particular index as the alternative index only
if it receives an Opinion of Counsel (a copy of which shall be furnished to the
NIMS Insurer, if any), which opinion shall be an expense reimbursed from the
Distribution Account pursuant to Section 3.8(a), that the selection of such
index will not cause an Adverse REMIC Event.

     The establishment of LIBOR by the Trustee and the Trustee’s subsequent
calculation of the Certificate Interest Rate applicable to the LIBOR
Certificates for the relevant Accrual Period, in the absence of manifest error,
will be final and binding.

     LIBOR Business Day: Any day on which banks in London, England and
The City of New York are open and conducting transactions in foreign currency
and exchange.

     LIBOR Certificate: Any Class A1, Class A2-A, Class A2-B, Class M1,
Class M2, Class M3, Class B1, Class B2 or Class B3 Certificate.

     LIBOR Determination Date: The second LIBOR Business Day
immediately preceding the commencement of each Accrual Period for any LIBOR
Certificate.

     Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which
the Servicer has determined that all amounts that it expects to recover on
behalf of the Trust Fund from or on account of such Mortgage Loan have been
recovered.

     Liquidation Expenses: Expenses that are incurred by the Servicer
in connection with the liquidation of any defaulted Mortgage Loan and are not
recoverable under the applicable Primary Mortgage Insurance Policy, if any,
including, without limitation, foreclosure and rehabilitation expenses, legal
expenses and unreimbursed amounts.

     Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee’s sale, foreclosure sale, payment in
full, discounted payoff or otherwise, or the sale of the related

40

 

Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the Mortgage
Loan, including any amounts remaining in the related Escrow Account.

     Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio
of the principal balance of such Mortgage Loan plus, in the case of a Junior
Lien Mortgage Loan, the principal balance of each mortgage loan senior thereto,
in each case as of the applicable date of determination, to (a) in the case of
a purchase, the lesser of the sale price of the Mortgaged Property and its
appraised value at the time of sale or (b) in the case of a refinancing or
modification, the appraised value of the Mortgaged Property at the time of the
refinancing or modification.

     Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.

     Lower Tier Interest: As provided in the Preliminary Statement.

     M1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the aggregate Class Principal Amount of the Class A1, Class A2-A
and Class A2-B Certificates, after giving effect to distributions on such
Distribution Date and (ii) the Class Principal Amount of the Class M1
Certificates immediately prior to such Distribution Date exceeds (y) the M1
Target Amount.

     M1 Target Amount: With respect to any Distribution Date, an amount
equal to the lesser of (a) the product of (i) 74.30% and (ii) the Pool Balance
for such Distribution Date and (b) the amount, if any, by which (i) the Pool
Balance for such Distribution Date exceeds (ii) 0.50% of the Cut-off Date
Balance.

     M2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the aggregate Class Principal Amount of the Class A1, Class
A2-A, Class A2-B and Class M1 Certificates, in each case after
giving effect to distributions on such Distribution Date and (ii) the
Class Principal Amount of the Class M2 Certificates immediately prior to such
Distribution Date exceeds (y) the M2 Target Amount.

     M2 Target Amount: With respect to any Distribution Date, an amount
equal to the lesser of (a) the product of (i) 84.80% and (ii) the Pool Balance
for such Distribution Date and (b) the amount, if any, by which (i) the Pool
Balance for such Distribution Date exceeds (ii) 0.50% of the Cut-off Date
Balance.

     M3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect with respect to such Distribution Date, the amount, if any, by which (x)
the sum of (i) the aggregate Class Principal Amount of the Class A1, Class
A2-A, Class A2-B, Class M1 and Class M2 Certificates, in each case after giving
effect to distributions on such Distribution Date and (ii) the Class Principal
Amount of the Class M3 Certificates immediately prior to such Distribution Date
exceeds (y) the M3 Target Amount.

41

 

     M3 Target Amount: With respect to any Distribution Date, an amount
equal to the lesser of (a) the product of (i) 87.30% and (ii) the Pool Balance
for such Distribution Date and (b) the amount, if any, by which (i) the Pool
Balance for such Distribution Date exceeds (ii) 0.50% of the Cut-off Date
Balance.

     Majority Class X Certificateholders: The Holders at any time of
more than 50% of the Percentage Interest in the Class X Certificates.

     Maximum Interest Rate: With respect to any Distribution Date, an
annual rate equal to (a) the product, expressed as a percentage, of (1) the
amount, if any, by which the weighted average of the maximum lifetime Mortgage
Rates, as specified in the related Mortgage Notes for the Mortgage Loans,
exceeds the Aggregate Expense Rate and (2) a fraction, the numerator of which
is 30 and the denominator of which is the actual number of days in the Accrual
Period related to such Distribution Date; plus (b) the product, expressed as a
percentage, of (1) the amount of any Net Swap Payment owed by the Swap
Counterparty for such Distribution Date divided by the Pool Balance as of the
beginning of the related Collection Period and (2) a fraction, the numerator of
which is 360 and the denominator of which is the actual number of days in the
Accrual Period related to such Distribution Date; minus (c) the product,
expressed as a percentage, of (1) the amount of any Net Swap Payment owed to
the Swap Counterparty for such Distribution Date divided by the Pool Balance as
of the beginning of the related Collection Period and (2) a fraction, the
numerator of which is 360 and the denominator of which is the actual number of
days in the Accrual Period related to such Distribution Date.

     MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.

     MERS Mortgage Loan: Any Mortgage Loan as to which the related
Mortgage, or an Assignment of Mortgage, has been or will be recorded in the
name of MERS, as nominee for the holder from time to time of the Mortgage Note.

     Monthly Excess Cashflow: With respect to any Distribution Date,
the sum, without duplication, of (w) that portion, if any, of the Interest
Remittance Amount for such date available for distribution pursuant to Section
4.1(b)(vii), (x) that portion, if any, of the Principal Remittance Amount for
such date available for distribution pursuant to Section 4.1(c)(i)(E) or
4.1(c)(ii)(E), (y) the Aggregate Overcollateralization Release Amount for such
date and (z) Excess Proceeds for such date.

     Moody’s: Moody’s Investors Service, Inc., or any successor in
interest.

     Mortgage: A mortgage, deed of trust or other instrument
encumbering a fee simple interest in real property securing a Mortgage Note,
together with improvements thereto.

     Mortgage File: The mortgage documents listed in Section 2.1(b)
pertaining to a particular Mortgage Loan required to be delivered to the
Trustee pursuant to this Agreement.

     Mortgage Loan: A Mortgage and the related notes or other evidences
of indebtedness secured by each such Mortgage conveyed, transferred, sold,
assigned to or deposited with the

42

 

Trustee pursuant to Section 2.1 or Section
2.3, including without limitation each Mortgage Loan listed on the Mortgage
Loan Schedule, as amended from time to time.

     Mortgage Loan Document Requirements: As defined in Section 2.2
hereof.

     Mortgage Loan Documents: As defined in Section 2.1 hereof.

     Mortgage Loan Schedule: The schedule attached hereto as Schedule
A, which shall identify each Mortgage Loan, as such schedule may be amended
from time to time to reflect the addition of Mortgage Loans to, or the deletion
of Mortgage Loans from, the Trust Fund. The Depositor shall be responsible for
providing the Trustee with all amendments to the Mortgage Loan Schedule.

     Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage under a Mortgage Loan.

     Mortgage Rate: With respect to any Mortgage Loan, the per annum
rate at which interest accrues on such Mortgage Loan, as determined under the
related Mortgage Note as reduced by any application of the Relief Act.

     Mortgaged Property: The fee simple (or leasehold) interest in real
property, together with improvements thereto including any exterior
improvements to be completed within 120 days of disbursement of the related
Mortgage Loan proceeds.

     Mortgagor: The obligor on a Mortgage Note.

     Net Excess Spread: With respect to any Distribution Date, (A) the
fraction, expressed as a percentage, the numerator of which is equal to the
product of (i) the amount, if any, by which (a) the Interest Remittance Amount
for such Distribution Date exceeds (b) the Current Interest payable with
respect to the Certificates for such date and (ii) 12, and the denominator of
which is the Pool Balance for such Distribution Date, multiplied by (B) a
fraction, the numerator of which is 30 and the denominator of which is the
greater of 30 and the actual number of days in the immediately preceding
calendar month.

     Net Funds Cap: With respect to any Distribution Date, a per annum
rate equal to (A) a fraction, expressed as a percentage, the numerator of which
is the product of (i) (a) the Optimal Interest Remittance Amount for such
Distribution Date minus (b) the lesser of any Net Swap Payment owed to the Swap
Counterparty for such Distribution Date and the Optional Interest Remittance
Amount and (ii) 12, and the denominator of which is the Pool Balance for the
immediately preceding Distribution Date multiplied by (B) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the Accrual Period related to such Distribution Date.

     Net Liquidation Proceeds: With respect to any Liquidated Mortgage
Loan, the related Liquidation Proceeds net of (i) unreimbursed expenses, (ii)
unreimbursed Advances and Servicing Advances, if any, and (iii) in the case of
a liquidated Junior Lien Mortgage Loan, the amount necessary to repay the
related senior lien mortgage loan, received and retained in

43

 

connection with the
liquidation of defaulted Mortgage Loans, through insurance or condemnation
proceeds, by foreclosure or otherwise, together with any net proceeds received
on a monthly basis with respect to any Mortgaged Properties acquired by
foreclosure or deed in lieu of foreclosure.

     Net Mortgage Rate: With respect to any Mortgage Loan, the Mortgage
Rate thereof reduced by the Aggregate Expense Rate for such Mortgage Loan.

     Net Prepayment Interest Shortfall: With respect to any
Distribution Date, the excess, if any, of any Prepayment Interest Shortfalls
for such date over Compensating Interest, if any, paid by the Servicer with
respect to such Distribution Date.

     Net Swap Payment: With respect to each Distribution Date, the net
payment required to be made pursuant to the terms of the Swap Agreement, which
net payment shall not take into account any Swap Termination Payment.

     NIMS Agreement: Any agreement pursuant to which NIM Securities, if
any, are issued.

     NIMS Insurer: Not applicable.

     NIM Securities: Any net interest margin securities issued by a
trust or other special purpose entity, the principal assets of such trust
including the Class P and Class X Certificates and the payments received
thereon, which principal assets back such securities.

     Non-Book-Entry Certificate: Any Certificate other than a
Book-Entry Certificate.

     Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS
Mortgage Loan.

     Nonrecoverable Advance: Any portion of any Advance or Servicing
Advance previously made or proposed to be made by the Servicer that, in the
good faith judgment of the Servicer, will not be ultimately recoverable from
the related Mortgagor, related Liquidation Proceeds or otherwise from amounts
in respect of the related Mortgage Loan.

     Notice Address: For purposes hereof, the addresses of the
Depositor, the Seller, the Servicer, the Trustee, the Credit Risk Manager, the
NIMS Insurer, if any, each Rating Agency and the Swap Counterparty are as
follows:

	(i)	 	If to the Depositor:
	 
	 	 	Aegis Asset Backed Securities Corporation

3250 Briarpark, Suite 400

Houston, Texas 77042

Attention: Secondary Marketing

44

 

	(ii)	 	If to the Seller:
	 
	 	 	Aegis Mortgage Corporation

3250 Briarpark, Suite 400

Houston, Texas 77042

Attention: Secondary Marketing
	 
	(iii)	 	If to the Servicer:
	 
	 	 	Chase Manhattan Mortgage Corporation

10790 Rancho Bernardo Road

San Diego, California 92127

Attention: Cindy L. Dunks
	 
	 	 	With a copy to:
	 
	 	 	Chase Manhattan Mortgage Corporation

343 Thornall Street

Edison, New Jersey 08837

Attention: General Counsel
	 
	(iv)	 	If to the Trustee, to its Corporate Trust Office:
	 
	(v)	 	If to the Credit Risk Manager:
	 
	 	 	The Murrayhill Company

1700 Lincoln Street, Suite 1600

Denver, Colorado 80203

Attention: General Counsel
	 
	(vi)	 	If to the NIMS Insurer: Not applicable.
	 
	(vii)	 	If to Moody’s:
	 
	 	 	Moody’s Investors Service, Inc.

99 Church Street, 4th Floor

New York, New York 10007

Attention: Residential Mortgages

45

 

	(viii)	 	If to S&P:
	 
	 	 	Standard & Poor’s Ratings Services,

a division of The McGraw-Hill Companies, Inc.

55 Water Street, 41st Floor

New York, New York 10004

Attention: Residential Mortgages
	 
	(ix)	 	If to Fitch:
	 
	 	 	Fitch, Inc.

One State Street Plaza, 30th Floor

New York, New York 10004

Attention: Residential Mortgages
	 
	(x)	 	If to the Swap Counterparty:
	 
	 	 	Credit Suisse First Boston International

One Cabot Square

London E14 4QJ

England

Attention: Managing Director – Legal Department

     Notional Amount: Not applicable.

     Notional Certificate: Not applicable.

     Offering Document: The Prospectus.

     Officer’s Certificate: A certificate signed by the Chairman of the
Board, any Vice Chairman, the President, any Vice President or any Assistant
Vice President of a Person, and in each case delivered to the Trustee.

     Opinion of Counsel: A written opinion of counsel, reasonably
acceptable in form and substance to the Trustee and the NIMS Insurer, if any,
and which may be in-house or outside counsel to the Depositor or the Trustee
but which must be Independent outside counsel with respect to any such opinion
of counsel concerning the transfer of any Residual Certificate or concerning
certain matters with respect to ERISA, or the taxation, or the federal income
tax status, of each REMIC.

     Optimal Interest Remittance Amount: With respect to each
Distribution Date, an amount equal to the product of (a) the quotient of (i)
the weighted average of the Net Mortgage Rates on the Mortgage Loans as of the
first day of the related Collection Period and adjusted for prepayments
received and distributed on a prior Distribution Date, and (ii) 12, and (b) the
Pool Balance for the immediately preceding Distribution Date.

46

 

     Original Value: With respect to any Mortgage Loan, the lesser of
(a) the Appraised Value of the related Mortgaged Property at the time such
Mortgage Loan was originated and (b) if the Mortgage Loan was made to finance
the acquisition of the related Mortgaged Property, the purchase price paid for
the Mortgaged Property by the Mortgagor at the time the related Mortgage Loan
was originated.

     Overcollateralization Amount: With respect to any Distribution
Date, the amount, if any, by which (x) the Pool Balance for such Distribution
Date exceeds (y) the aggregate Class Principal Amount of the Class A1, Class
A2-A, Class A2-B, Class M1, Class M2, Class M3, Class B1, Class B2 and Class B3
Certificates after giving effect to distributions on such Distribution Date.

     Overcollateralization Cumulative Loss Trigger Event: An
“Overcollateralization Cumulative Loss Trigger Event” shall have occurred with
respect to any Distribution Date commencing with the Distribution Date in July
2007, if the fraction, expressed as a percentage, obtained by dividing (x) the
aggregate amount of Cumulative Realized Losses incurred from the Cut-off Date
through the last day of the related Collection Period by (y) the Cut-off Date
Balance, exceeds the applicable percentage set forth below with respect to such
Distribution Date:

	 	 	 	 	 
	Distribution Date
	 	Loss Percentage

	July 2007 through June 2008
	 	 	3.25	%
	July 2008 through June 2009
	 	 	5.25	%
	July 2009 through June 2010
	 	 	6.75	%
	July 2010 and thereafter
	 	 	7.00	%

     Overcollateralization Deficiency: With respect to any Distribution
Date, the amount, if any, by which (x) the Targeted Overcollateralization
Amount for such Distribution Date exceeds (y) the Overcollateralization Amount
for such Distribution Date, calculated for this purpose after giving effect to
the reduction on such Distribution Date of the Certificate Principal Amounts
resulting from the distribution of the Principal Remittance Amount on such
Distribution Date, but prior to allocation of any Applied Loss Amount on such
Distribution Date.

     Payahead: With respect to any Mortgage Loan and any Due Date
therefor, any Scheduled Payment received by the Servicer during any Collection
Period in addition to the Scheduled Payment due on such Due Date, intended by
the related Mortgagor to be applied on a subsequent Due Date or Due Dates.

     Paying Agent: Any paying agent appointed by the Trustee.

     Percentage Interest: With respect to any Certificate, its
percentage interest in the undivided beneficial ownership interest in the Trust
Fund evidenced by all Certificates of the same Class as such Certificate. With
respect to any Certificate other than the Class X, Class P, Class R
Certificates, the Percentage Interest evidenced thereby shall equal the initial
Certificate Principal Amount thereof divided by the initial Class Principal
Amount of all Certificates of the same Class. With respect to the Class X,
Class P and Class R Certificates, the Percentage

47

 

Interest evidenced thereby
shall be as specified on the face thereof, or otherwise be equal to 100%.

     Permitted Transferee: Any person other than a “disqualified
organization” as defined in section 860E(e)(5) of the Code.

     Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.

     Plan Asset Regulations: The Department of Labor regulations set
forth in 29 C.F.R. 2510.3-101.

     PMI Insurance Premium: Not applicable.

     PMI Insurer: Not applicable.

     Pool Balance: As of any date of determination, the aggregate of
the Scheduled Principal Balances of the Mortgage Loans.

     Prepayment Interest Shortfall: With respect to any full or partial
Principal Prepayment of a Mortgage Loan, the excess, if any, of (i) one full
month’s interest at the applicable Mortgage Rate (as reduced by the Servicing
Fee, in the case of Principal Prepayments in full) on the outstanding principal
balance of such Mortgage Loan immediately prior to such prepayment over (ii)
the amount of interest actually received with respect to such Mortgage Loan in
connection with such Principal Prepayment.

     Prepayment Period: With respect to any Distribution Date, the
calendar month immediately preceding the month in which such Distribution Date
occurs.

     Prepayment Penalty: Any prepayment fees and penalties to be paid
by the Mortgagor on a Mortgage Loan.

     Primary Mortgage Insurance Policy: Any mortgage guaranty
insurance, if any, on an individual Mortgage Loan (excluding any Bulk PMI
Policy) as evidenced by a policy or certificate, whether such policy is
obtained by the originator, the lender, the Mortgagor or the Seller on behalf
of the Trust Fund.

     Prime Rate: The prime rate of the United States money center
commercial banks as published in The Wall Street Journal, Northeast
Edition.

     Principal Distribution Amount: With respect to any Distribution
Date, an amount equal to the Principal Remittance Amount for such date minus
the Aggregate Overcollateralization Release Amount, if any, for such
Distribution Date.

     Principal Prepayment: Any Mortgagor payment of principal (other
than a Balloon Payment) or other recovery of principal on a Mortgage Loan that
is recognized as having been

48

 

received or recovered in advance of its scheduled
Due Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note.

     Principal Remittance Amount: With respect to any Distribution
Date, (a) the sum of (i) all principal collected (other than Payaheads) or
advanced in respect of Scheduled Payments on the Mortgage Loans during the
related Collection Period (less unreimbursed Advances due to the Servicer or
the Trustee with respect to the Mortgage Loans, to the extent allocable to
principal), (ii) all Principal Prepayments in full or in part received during
the related Prepayment Period, in the case of any Principal Prepayments in
full, or during the related Collection Period, in the case of any Principal
Prepayments in part, (iii) the outstanding principal balance of each Mortgage
Loan that was purchased from the Trust Fund during the related Prepayment
Period, (iv) the portion of any Substitution Adjustment Amount paid with
respect to any Deleted Mortgage Loan during the related Prepayment Period, to
the extent allocable to principal, and (v) all Net Liquidation Proceeds,
Insurance Proceeds, Subsequent Recoveries and other recoveries collected with
respect to such Mortgage Loans during the related Prepayment Period, to the
extent allocable to principal, as reduced by (b) (i) to the extent not
reimbursed pursuant to clause (a) above or from the Interest Remittance Amount,
other costs, expenses or liabilities reimbursable to the Trustee and the
Servicer to the extent provided in this Agreement; and to the extent the
Interest Remittance Amount is less than amounts reimbursable to the Trustee
pursuant to Section 3.8(a)(vii), any amounts reimbursable during the related
Anniversary Year to the Trustee therefrom and not reimbursed from the Interest
Remittance Amount, or otherwise (provided, however, that such reimbursable
amounts from the Interest Remittance Amount and the Principal Remittance Amount
may not exceed $200,000 in the aggregate during any Anniversary Year; provided,
further, that in the event that the Trustee incurs reimbursable amounts in
excess of $200,000, it may seek reimbursement from the Principal Remittance
Amount for such amounts in subsequent Anniversary Years, but in no event shall
the Interest Remittance Amount and the Principal Remittance Amount in the
aggregate be reduced in respect of reimbursements to the Trustee in excess of
$200,000 per Anniversary Year; and provided, further, that notwithstanding the
foregoing, costs and expenses incurred by the Trustee pursuant to Section 7.1
in connection with any transfer of servicing shall be excluded from the
$200,000 per Anniversary Year limit on reimbursable amounts) and (ii) any Swap
Termination Payment deposited in the Supplemental Interest Trust for payment to
the Swap Counterparty (to the extent not paid from interest collections).

     Private Certificate: Not applicable.

     Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.

     Proprietary Lease: With respect to any Cooperative Unit, a lease
or occupancy agreement between a Cooperative Corporation and a holder of
related Cooperative Shares.

     Prospectus: The prospectus supplement dated June 24, 2004,
together with the accompanying prospectus dated April 7, 2004, relating to the
Class A, Class M and Class B Certificates.

49

 

     Purchase Price: With respect to the purchase of a Mortgage Loan or
related REO Property pursuant to this Agreement, an amount equal to the sum of
(a) 100% of the unpaid principal balance of such Mortgage Loan, (b) accrued
interest thereon at the applicable Mortgage Rate, from the date as to which
interest was last paid to (but not including) the Due Date in the Collection
Period immediately preceding the related Distribution Date, (c) the amount of
any costs and damages incurred by the Trust Fund in connection with any
violation of any applicable federal, state or local predatory or abusive
lending law in connection with the origination of such Mortgage Loan and (d)
the fair market value of all other property being purchased. The Servicer (or
the Trustee, if applicable) shall be reimbursed from the Purchase Price for any
Mortgage Loan or related REO Property for any Advances and Servicing Advances
made or other amounts advanced with respect to such Mortgage Loan that are
reimbursable to the Servicer under this Agreement (or to the Trustee
hereunder), together with any accrued and unpaid compensation due to the
Servicer or the Trustee hereunder.

     Qualified GIC: A guaranteed investment contract or surety bond
providing for the investment of funds in the Distribution Account and insuring
a minimum, fixed or floating rate of return on investments of such funds, which
contract or surety bond shall:

     (i) be an obligation of an insurance company or other corporation
whose long-term debt is rated by each Rating Agency in one of its two
highest rating categories or, if such insurance company has no long-term
debt, whose claims paying ability is rated by each Rating Agency in one
of its two highest rating categories, and whose short-term debt is rated
by each Rating Agency in its highest rating category;

     (ii) provide that the Trustee may exercise all of the rights under
such contract or surety bond without the necessity of taking any action
by any other Person;

     (iii) provide that if at any time the then current credit standing
of the obligor under such guaranteed investment contract is such that
continued investment pursuant to such contract of funds would result in a
downgrading of any rating of the Certificates or the NIM Securities, the
Trustee shall terminate such contract without penalty and be entitled to
the return of all funds previously invested thereunder, together with
accrued interest thereon at the interest rate provided under such
contract to the date of delivery of such funds to the Trustee;

     (iv) provide that the Trustee’s interest therein shall be
transferable to any successor trustee hereunder; and

     (v) provide that the funds reinvested thereunder and accrued
interest thereon be returnable to Distribution Account, as the case may
be, not later than the Business Day prior to any Distribution Date.

     Qualified Insurer: An insurance company duly qualified as such
under the laws of the states in which the related Mortgaged Properties are
located, duly authorized and licensed in such states to transact the applicable
insurance business and to write the insurance provided.

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     Qualified Substitute Mortgage Loan: In the case of a Mortgage Loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this
Agreement, a Mortgage Loan that, on the date of such substitution, (i) has an
outstanding Scheduled Principal Balance (or in the case of a substitution of
more than one mortgage loan for a Deleted Mortgage Loan, an aggregate Scheduled
Principal Balance), after application of all Scheduled Payments due during or
prior to the month of substitution, not in excess of, and not more than 5.0%
less than, the outstanding Scheduled Principal Balance of the Deleted Mortgage
Loan as of the Due Date in the calendar month during which the substitution
occurs, (ii) has a Mortgage Rate not less than the Mortgage Rate on the Deleted
Mortgage Loan, (iii) if applicable, has a maximum Mortgage Rate not less than
the maximum Mortgage Rate on the Deleted Mortgage Loan, (iv) has a minimum
Mortgage Rate not less than the minimum Mortgage Rate of the Deleted Mortgage
Loan, (v) has a gross margin equal to or greater than the gross margin of the
Deleted Mortgage Loan, (vi) has a next adjustment date not later than the next
adjustment date on the Deleted Mortgage Loan, (vii) has the same Due Date as
the Deleted Mortgage Loan, (viii) has a remaining term to maturity not greater
than (and not more than one year less than) that of the Deleted Mortgage Loan,
(ix) is current as of the date of substitution, (x) has a Loan-to-Value Ratio
as of the date of substitution equal to or lower than the Loan-to-Value Ratio
of the Deleted Mortgage Loan as of such date, (xi) has been underwritten in
accordance with substantially the same underwriting criteria and guidelines as
the Deleted Mortgage Loan, (xii) has a risk grading determined by the Seller at
least equal to the risk grading assigned on the Deleted Mortgage Loan, (xiii)
is secured by the same property type as the Deleted Mortgage Loan, (xiv)
conforms to each representation and warranty applicable to the Deleted Mortgage
Loan made in the Sale Agreement, (xv) has the same or higher lien position as
the Deleted Mortgage Loan, (xvi) is covered by a primary mortgage insurance
policy if the Deleted Mortgage Loan was so covered and (xvii) contains
provisions covering the payment of Prepayment Penalties by the Mortgager for
early prepayment of the Mortgage Loan at least as favorable as the Deleted
Mortgage Loan. In the event that one or more mortgage loans are substituted
for one or more Deleted Mortgage Loans, the amounts described in clause (i)
hereof shall be determined on the basis of aggregate Scheduled Principal
Balances, the Mortgage Rates described in clause (ii) hereof shall be
determined on the basis of weighted average Mortgage Rates, the risk gradings
described in clause (xii) hereof shall be satisfied as to each such mortgage
loan, the terms described in clause (viii) hereof shall be determined on the
basis of weighted average remaining term to maturity, the Loan-to-Value Ratios
described in clause (x) hereof shall be satisfied as to each such mortgage loan
and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (xiv) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as
the case may be.

     Rating Agency: Each of Moody’s, Fitch and S&P.

     Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount equal to (i) the unpaid principal balance of such Mortgage Loan as of
the date of liquidation, minus (ii) Liquidation Proceeds received, to the
extent allocable to principal, net of amounts that
are reimbursable therefrom to the Servicer with respect to such Mortgage
Loan (other than Advances of principal) including expenses of liquidation, and
with respect to a Mortgage Loan that is not a liquidated Mortgage Loan, any
amount of principal that the Mortgagor is no longer required to pay. In
determining whether a Realized Loss is a Realized Loss of principal,
Liquidation

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Proceeds shall be allocated, first, to payment of expenses related
to such Liquidated Mortgage Loan, then to accrued unpaid interest, and finally
to reduce the principal balance of the Mortgage Loan.

     Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the
Cooperative Property.

     Record Date: With respect to the LIBOR Certificates and any
Distribution Date, the close of business on the Business Day immediately
preceding such Distribution Date. With respect to the Class X, Class P and
Class R Certificates and any Distribution Date, the close of business on the
last Business Day of the month immediately preceding the month in which the
Distribution Date occurs (or, in the case of the first Distribution Date, the
Closing Date).

     Relief Act: The Servicemembers Civil Relief Act, as such may be
amended from time to time, and any similar state or local laws.

     Relief Act Shortfall: With respect to any Mortgage Loan as to
which there has been a reduction in the amount of interest collectible thereon
as a result of application of the Relief Act, any amount by which interest
collectible on such Mortgage Loan for the Due Date in the related Collection
Period is less than interest accrued thereon for the applicable one-month
period at the Net Mortgage Rate without giving effect to such reduction.

     REMIC: Each pool of assets in the Trust Fund designated as a REMIC
pursuant to the Preliminary Statement.

     REMIC 1: As described in the Preliminary Statement.

     REMIC 2: As described in the Preliminary Statement.

     REMIC 3: As described in the Preliminary Statement.

     REMIC 4: As described in the Preliminary Statement.

     REMIC Provisions: The provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations, including proposed regulations and rulings, and
administrative pronouncements promulgated thereunder, as the foregoing may be
in effect from time to time.

     REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan or otherwise treated as having been acquired pursuant
to the REMIC Provisions.

     Required Insurance Policies: Any Insurance Policy required to be
maintained by the Servicer under this Agreement.

     Required Recordation States: The states of Florida and
Mississippi.

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     Required Reserve Fund Amount: With respect to any Distribution
Date on which the Net Excess Spread for such date is less than 0.25%, the
excess, if any, of (i) the product of 0.50% and the aggregate Scheduled
Principal Balance of the Mortgage Loans over (ii) the amount of funds on
deposit in the Basis Risk Reserve Fund prior to deposits thereto on such
Distribution Date. With respect to any Distribution Date on which the Net
Excess Spread for such date is equal to or greater than 0.25%, the amount, if
any, by which (i) $1,000 exceeds (ii) the amount on deposit in the Basis Risk
Reserve Fund immediately prior to such date; provided, however, that on any
Distribution Date on which the Class Principal Amount of each Class of LIBOR
Certificates has been reduced to zero, the Required Reserve Fund Amount shall
be zero.

     Residual Certificates: The Class R Certificates.

     Responsible Officer: When used with respect to the Trustee, any
Vice President, Assistant Vice President, the Secretary, any assistant
secretary, or any officer, working in its Corporate Trust Office and having
responsibility for the administration of this Agreement, and any other officer
to whom a matter arising under this Agreement may be referred.

     Restricted Certificate: Any Class X, Class P or Class R
Certificate.

     Rolling Three Month Delinquency Rate: With respect to any
Distribution Date, the fraction, expressed as a percentage, equal to the
average of the Delinquency Rates for each of the three (or one and two, in the
case of the first and second Distribution Dates, respectively) immediately
preceding calendar months.

     S&P: Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor in interest.

     Sale Agreement: The Sale Agreement dated as of the Cut-off Date
between the Depositor and Seller for the sale of the Mortgage Loans.

     Scheduled Payment: Each scheduled payment of principal and
interest (or of interest only, if applicable) to be paid by the Mortgagor on a
Mortgage Loan, as reduced (except where otherwise specified herein) by the
amount of any related Debt Service Reduction (excluding all amounts of
principal and interest that were due on or before the Cut-off Date whenever
received) and, in the case of an REO Property, an amount equivalent to the
Scheduled Payment that would have been due on the related Mortgage Loan if such
Mortgage Loan had remained in existence.

     Scheduled Principal Balance: With respect to (i) any Mortgage Loan
as of any Distribution Date, the principal balance of such Mortgage Loan at the
close of business on the Cut-off Date after giving effect to principal payments
due on or before the Cut-off Date, whether
or not received, less an amount equal to principal payments due after the
Cut-off Date, and on or before the Due Date in the related Collection Period,
whether or not received from the Mortgagor or advanced by the Servicer, and all
amounts allocable to unscheduled principal payments (including Principal
Prepayments, Liquidation Proceeds, Insurance Proceeds and condemnation
proceeds, in each case to the extent identified and applied prior to or during
the related Prepayment Period) and (ii) any REO Property as of any Distribution
Date, the Scheduled Principal Balance of the related Mortgage Loan on the Due
Date immediately preceding the date

53

 

of acquisition of such REO Property by or
on behalf of the Trustee (reduced by any amount applied as a reduction of
principal on the Mortgage Loan). With respect to any Mortgage Loan and the
Cut-off Date, as specified in the Mortgage Loan Schedule.

     Securities Act: The Securities Act of 1933, as amended.

     Seller: Aegis Mortgage Corporation or any successor in interest.

     Senior Certificate: Any Class A Certificate.

     Senior Enhancement Percentage: With respect to any Distribution
Date, the fraction, expressed as a percentage, the numerator of which is the
sum of the aggregate Class Principal Amount of the Class M and Class B
Certificates and the Overcollateralization Amount (which amount, for purposes
of this definition only, shall not be less than zero) and the denominator of
which is the Pool Balance for such Distribution Date, in each case after giving
effect to distributions or such Distribution Date.

     Senior Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or if a Trigger Event is in
effect with respect to such Distribution Date, an amount equal to 100% of the
Principal Distribution Amount and (b) on or after the Stepdown Date and as long
as a Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the aggregate Class Principal Amount of the Class
A1, Class A2-A and Class A2-B Certificates immediately prior to such
Distribution Date exceeds (y) the Senior Target Amount.

     Senior Target Amount: With respect to each Distribution Date, an
amount equal to the lesser of (a) the product of (i) 62.00% and (ii) the Pool
Balance for such Distribution Date and (b) the amount, if any, by which (i) the
Pool Balance for such Distribution Date exceeds (ii) 0.50% of the Cut-off Date
Balance.

     Servicer: Chase Manhattan Mortgage Corporation or any successor in
interest.

     Servicer Remittance Date: The day in each calendar month on which
the Servicer is required to remit payments to the Distribution Account, which
is the 24th day of each calendar month no later than 1:00 p.m. (New York City
time) (or, if such 24th day is not a Business Day, the immediately preceding
Business Day).

     Servicing Advances: All customary, reasonable and necessary “out
of pocket” costs and expenses other than Advances (including reasonable
attorneys’ fees and disbursements) incurred in the performance by the Servicer
of its servicing obligations,
including, but not limited to, the cost of (a) the preservation,
inspection, restoration and protection of the Mortgaged Property, (b) any
enforcement or administrative or judicial proceedings, including foreclosures,
(c) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage, (d) taxes, assessments,
water rates, sewer rents and other charges which are or may become a lien upon
the Mortgaged Property, and Bulk PMI Policy premiums and fire and hazard
insurance coverage and (e) any losses sustained by a Servicer with respect to
the liquidation of the Mortgaged Property.

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     Servicing Fee: With respect to any Distribution Date and each
Mortgage Loan, an amount equal to the product of (a) one-twelfth of the
Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage
Loan as of the first day of the related Collection Period.

     Servicing Fee Rate: 0.50% per annum.

     Servicing Officer: Any of the President, any Vice President
(however denominated), or Assistant Vice President of the Servicer involved in,
or responsible for, the administration and servicing of one or more Mortgage
Loans at the time of performance of the relevant activity of the Servicer.

     Servicing Standard: The Servicer shall service and administer the
Mortgage Loans (a) in the same manner in which, and with the same care, skill,
prudence and diligence with which, the Servicer generally services and
administers similar mortgage loans with similar mortgagors (i) for other third
parties, giving due consideration to customary and usual standards of practice
of prudent institutional residential mortgage lenders servicing their own loans
or (ii) held in the Servicer’s own portfolio, whichever standard is higher; (b)
with a view to the maximization of recoveries with respect to such Mortgage
Loans on a net present value basis and the best interests of the Trust Fund and
any Person to which Mortgage Loans may be transferred by the Trustee; (c)
without regard to (i) any relationship that the Servicer or any Affiliate
thereof may have with the related Mortgagor or any other party to the
transaction, (ii) the right of the Servicer to receive compensation or other
fees for its services rendered pursuant to this Agreement, (iii) the obligation
of the Servicer to make Servicing Advances, (iv) the ownership, servicing or
management by the Servicer or any Affiliate thereof for others of any other
mortgage loans or mortgaged properties, and (v) any debt that the Servicer or
any Affiliate thereof has extended to any Mortgagor or any affiliate of such
Mortgagor; and (d) in accordance with applicable federal, state and local laws,
rules and regulations.

     Special Servicer: The person designated by the Seller (with the
prior consent of the Trustee and the NIMS Insurer, if any) to assume the
servicing of Distressed Mortgage Loans pursuant to Section 3.22 hereof.

     Startup Day: The day designated as such in the Preliminary
Statement.

     Stepdown Date: The later to occur of (x) the Distribution Date in
July 2007 and (y) the first Distribution Date on which the Senior Enhancement
Percentage (calculated for this purpose after giving effect to payments or
other recoveries in respect of the Mortgage Loans
during the related Collection Period but before giving effect to
distributions on the Certificates on such Distribution Date) is greater than or
equal to 38%.

     Subordinate Certificate: Any Class M, Class B or Class X
Certificate.

     Subsequent Recovery: With respect to any Mortgage Loan, any
collection or other recovery of amounts owed thereunder after such Mortgage
Loan becomes a Liquidated Mortgage Loan.

55

 

     Substitution Adjustment Amount: The amount, if any, by which the
Scheduled Principal Balance of a Deleted Mortgage Loan exceeds the Scheduled
Principal Balance of the related Qualified Substitute Mortgage Loan, or
aggregate Scheduled Principal Balance, if applicable, plus unpaid interest
thereon, and any related unpaid Advances or Servicing Advances or unpaid
Servicing Fees, and the amount of any costs and damages incurred by the Trust
Fund in connection with any violation of any applicable federal, state or local
predatory or abusive lending laws in connection with the origination of such
Deleted Mortgage Loan.

     Supplemental Interest Trust: The corpus of a trust created
pursuant to Section 4.7 of this Agreement and designated as the “Supplemental
Interest Trust,” consisting of the Swap Agreement, the right to receive the
Class X Distributable Amount as provided in Section 4.1(d)(xi), the Class LT4-I
interest in REMIC 4 and the right to receive Class I Shortfalls.

     Supplemental Interest Trust Amount: The sum of any Net Swap
Payment and any Swap Termination Payment deposited as described under Section
4.1(b) and (c) for any Distribution Date.

     Swap Agreement: The interest rate swap agreement entered into by
the Supplemental Interest Trust, which agreement provides for a Net Swap
Payment to be paid pursuant to the conditions provided therein, together with
any schedules, confirmations or other agreements relating thereto, attached
hereto as Exhibit O.

     Swap Counterparty: The counterparty to the Supplemental Interest
Trust either (a) entitled to receive payments from the Supplemental Interest
Trust or (b) required to make payments to the Supplemental Interest Trust, in
either case pursuant to the terms of the Swap Agreement, and any successor in
interest or assign. Initially, the Swap Counterparty shall be Credit Suisse
First Boston International.

     Swap Termination Payment: Upon the designation of an “Early
Termination Date” as defined in the Swap Agreement, the payment to be made by
the Supplemental Interest Trust to the Swap Counterparty, or by the Swap
Counterparty to the Supplemental Interest Trust, as applicable, pursuant to the
terms of the Swap Agreement.

     Target Amount: With respect to any Distribution Date, an amount
equal to the Pool Balance for such Distribution Date minus the Targeted
Overcollateralization Amount for such Distribution Date.

     Targeted Overcollateralization Amount: With respect to any
Distribution Date (x) prior to the Stepdown Date, $23,834,564, (y) on or after
the Stepdown Date, and provided that an Overcollateralization Trigger Event is
not in effect, the greater of (i) $4,179,173 and (ii) 5.00% of the Pool Balance
for such Distribution Date and (z) on or after the Stepdown Date and provided
that an Overcollateralization Trigger Event is in effect, the Targeted
Overcollateralization Amount for the immediately preceding Distribution Date.

     Tax Matters Person: The Person designated as “tax matters person”
in the manner provided under Treasury regulation § 1.860F-4(d) and temporary
Treasury regulation § 301.6231(a)(7)1T. Initially, the Tax Matters Person
shall be the Trustee.

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     Tax Matters Person Certificate: The Class R Certificate with a
Denomination of 0.00001%.

     Telerate Page 3750: The display currently so designated as “Page
3750” on the Bridge Telerate Service (or such other page selected by the
Servicer as may replace Page 3750 on that service for the purpose of displaying
daily comparable rates on prices).

     Title Insurance Policy: A title insurance policy maintained with
respect to a Mortgage Loan.

     Total Distribution Amount: With respect to any Distribution Date,
the sum of (i) the Interest Remittance Amount for such date, (ii) the Principal
Remittance Amount for such date, and (iii) all Prepayment Penalties collected
during the related Prepayment Period or Collection Period, as applicable.

     Transferee Affidavit: As defined in Section 5.2.

     Transferor Affidavit: As defined in Section 5.2.

     Trigger Event: A Trigger Event shall have occurred with respect to
any Distribution Date if either a Delinquency Event or an Overcollateralization
Cumulative Loss Trigger Event has occurred for such Distribution Date.

     Trust Fund: The corpus of a trust created pursuant to this
Agreement and designated as the “Trust Fund,” consisting of the Mortgage Loans,
the assignment of the Depositor’s rights under the Sale Agreement, such amounts
as shall from time to time be held in the Collection Account, the Distribution
Account and any Escrow Account, the Basis Risk Reserve Fund, any Insurance
Policies, any REO Property and the other items referred to in, and conveyed to
the Trustee under, Section 2.1(a).

     Trustee: Wells Fargo Bank, N.A., not in its individual capacity
but solely as Trustee, or any successor in interest, or if any successor
trustee or any co-trustee shall be appointed as herein provided, then such
successor trustee and such co-trustee, as the case may be.

     Trustee Fee: As to any Distribution Date and each Mortgage Loan,
an amount equal to the product of (a) one twelfth, (b) the Trustee Fee Rate and
(c) the Scheduled Principal Balance of such Mortgage Loan as of the first day
of the related Collection Period.

     Trustee Fee Rate: 0.009% per annum.

     UCC: The Uniform Commercial Code as in effect in any applicable
jurisdiction from time to time.

     Underwriters: Credit Suisse First Boston LLC, Bear, Stearns & Co.
Inc. and Lehman Brothers Inc.

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     Underwriter’s Exemption: Prohibited Transaction Exemption 2002-41,
67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.

     Unpaid Basis Risk Shortfall: With respect to any Distribution Date
and any LIBOR Certificate, the aggregate of all Basis Risk Shortfalls with
respect to such Certificate remaining unpaid from previous Distribution Dates,
plus interest accrued thereon at the applicable Certificate Interest Rate
(calculated without giving effect to the Net Funds Cap but limited to a rate no
greater than the Maximum Interest Rate).

     Upper Tier REMIC: REMIC 4.

     Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement,
98% of all Voting Interests shall be allocated to the Class A, Class M and
Class B Certificates. Voting Interests shall be allocated among such
Certificates based on the product of (i) 98% and (ii) the fraction, expressed
as a percentage, the numerator of which is the aggregate Class Principal Amount
of all Certificates then outstanding and the denominator of which is the Pool
Balance then outstanding. The remainder of the Voting Interests not otherwise
allocated below shall be allocated to the Class R Certificates. At all times
during the term of this Agreement, 1% of all Voting Interests shall be
allocated to each Class of the Class P and Class X Certificates, while they
remain outstanding. Voting Interests shall be allocated among the other
Classes of Certificates (and among the Certificates within each such Class) in
proportion to their Class Principal Amounts (or Certificate Principal Amounts)
or Percentage Interests.

     Section 1.2 Calculations Respecting Mortgage Loans. 

     Calculations required to be made pursuant to this Agreement with respect
to any Mortgage Loan in the Trust Fund shall be made based upon current
information as to the terms of the Mortgage Loans and reports of payments
received from the Mortgagor on such Mortgage Loans and payments to be made to
the Trustee as supplied to the Trustee by the Servicer. The Trustee shall not
be required to recompute, verify or recalculate the information supplied to it
by the Servicer or the Credit Risk Manager.

     Section 1.3 Calculations Respecting Accrued Interest.

     Accrued interest, if any, on any LIBOR Certificate shall be calculated
based upon a 360-day year and the actual number of days in each Accrual Period.

     Section 1.4 Rights of the NIMS Insurer.

     Each of the rights of the NIMS Insurer, if any, set forth in this
Agreement shall be in effect only so long as any NIM Securities are issued and
remain outstanding or the NIMS Insurer, if any, is owed amounts in respect of
its guarantee of payment on such NIM Securities.

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ARTICLE II

CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES

     Section 2.1 Conveyance of Mortgage Loans.

     (a) To provide for the distribution of the principal of and interest on
the Certificates in accordance with their terms, the distribution of all other
sums distributable hereunder with respect to the Certificates and the
performance of the covenants contained herein, the Depositor hereby sells,
conveys, assigns and transfers to the Trustee, in trust, without recourse and
for the exclusive benefit of the Certificateholders as their interests may
appear, all the Depositor’s right, title and interest in and to any and all
benefits accruing to the Depositor from: (A) (i) the Mortgage Loans (and all
Qualified Substitute Mortgage Loans substituted therefor), in respect of which
the Depositor is causing to be delivered to the Trustee (or the Custodian)
herewith the related Mortgage Files, and the Depositor’s interest in any
collateral pledged to secure a Mortgage Loan, and all Scheduled Payments due
after the Cut-off Date and all Principal Prepayments received with respect to
the Mortgage Loans paid by the borrower after the Cut-off Date and proceeds of
the conversion, voluntary or involuntary, of the foregoing; (ii) each Insurance
Policy; (iii) the Sale Agreement and (iv) all proceeds of any of the foregoing
(including, but not limited to, all proceeds of any mortgage insurance, hazard
insurance, or title insurance policy relating to the Mortgage Loans, cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, rights to payment of any and every kind, and
other forms of obligations and receivables, which at any time constitute all or
part or are included in the proceeds of any of the foregoing); to pay the
Certificates as specified herein (items (i) through (iv) above, collectively,
the “Trust Fund”) and (B) the Swap Agreement and the right to receive cash and
all other assets constituting property of the Supplemental Interest Trust.

     It is agreed and understood by the Depositor and the Trustee (and the
Depositor has so represented and recognized in the Sale Agreement) that it is
not intended that any Mortgage Loan to be included in the Trust Fund be either
(i) a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act
effective November 27, 2003, or (ii) a “High-Cost Home Loan” as defined in the
New Mexico Home Loan Protection Act effective January 1, 2004.

     (b) In connection with such transfer, the Depositor has delivered or
caused to be delivered to the Trustee for the benefit of the Certificateholders
the following documents or
instruments (collectively, the “Mortgage Loan Documents”) with respect to
each Mortgage Loan so transferred:

     (i) (A) the original Mortgage Note endorsed by manual or facsimile
signature to the Trustee or in blank, without recourse, with all
intervening endorsements showing a complete chain of endorsement from the
originator to the Person endorsing the Mortgage Note (the “Last
Endorsee”) (each such endorsement being sufficient to transfer all right,
title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note); or

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     (B) with respect to any Lost Mortgage Note, a lost note
affidavit from the Depositor stating that the original Mortgage
Note was lost or destroyed, together with a copy of such Mortgage
Note;

     (ii) except with respect to any Cooperative Loan, the original
recorded Mortgage or a copy of such Mortgage certified by the Seller, the
originating lender, settlement agent, or escrow company as being a true
and complete copy of the Mortgage;

     (iii) except with respect to any Cooperative Loan and any MERS
Mortgage Loans and except with respect to any Mortgage Loan for which the
related Mortgage names the originating lender as beneficiary or
mortgagee, either (A) a duly executed assignment of the Mortgage in
blank, or (B) an original recorded assignment of the Mortgage from the
Last Endorsee to the Trustee or a copy of such assignment of Mortgage
certified by the Depositor, the originating lender, settlement agent, or
escrow company as being a true and complete copy thereof which in either
case may be included in a blanket assignment or assignments;

     (iv) except with respect to any Cooperative Loan and any MERS
Mortgage Loans, each interim recorded assignment of such Mortgage, or a
copy of each such interim recorded assignment of Mortgage certified by
the Depositor, the originating lender, settlement agent, or escrow
company as being a true and complete copy thereof;

     (v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any;

     (vi) except with respect to any Cooperative Loan, either the
original or duplicate original title policy (including all riders
thereto) with respect to the related Mortgaged Property, if available,
provided that the title policy (including all riders thereto) will be
delivered as soon as it becomes available, and if the title policy is not
available, and to the extent required pursuant to the second paragraph
below or otherwise in connection with the rating of the Certificates, a
written commitment or interim binder or preliminary report of the title
issued by the title insurance or escrow company with respect to the
Mortgaged Property; and

     (vii) in the case of a Cooperative Loan, the originals of the
following documents or instruments (in addition to the documents required
by clauses (i) and (iii) above):

     (A) The Cooperative Shares, together with
a stock power in blank;

     (B) The executed Security Agreement;

     (C) The executed Proprietary Lease;

     (D) The executed Recognition Agreement;

     (E) The executed UCC original financing statement with
evidence of recording thereon; and

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     (F) Executed UCC amendments or other appropriate UCC financing
statements required by state law, evidencing a complete and
unbroken line from the mortgagee to the Trustee (or in blank) with
evidence of recording thereon (or in a form suitable for
recordation).

     In the event that with respect to any Mortgage Loan the Depositor cannot
deliver (a) the original recorded Mortgage or (b) any recorded assignments or
interim assignments satisfying the requirements of clause (iii) or (iv) above,
respectively, concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public
recording office, the Depositor shall deliver such documents to the Trustee or
the Custodian on its behalf as promptly as possible upon receipt thereof and,
in any event, within 720 days following the Closing Date. The Depositor or the
Servicer shall forward or cause to be forwarded to the Trustee or the Custodian
on its behalf (a) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (b) any other documents
required to be delivered by the Depositor or the Servicer to the Trustee or the
Custodian on its behalf. In the case where a public recording office retains
the original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, the Depositor shall deliver to the
Trustee or the Custodian on its behalf a copy of such Mortgage certified (to
the extent such certification is reasonably obtainable) by such public
recording office to be a true and complete copy of the original recorded
Mortgage.

     In addition, in the event that with respect to any Mortgage Loan the
Depositor cannot deliver the original or duplicate original lender’s title
policy (together with all riders thereto), satisfying the requirements of
clause (vi) above, concurrently with the execution and delivery hereof because
the related Mortgage or a related assignment has not been returned from the
applicable public recording office, the Depositor shall promptly deliver to the
Trustee or the Custodian on its behalf such original or duplicate original
lender’s title policy (together with all riders thereto) upon receipt thereof
from the applicable title insurer, and in any event, within 720 days following
the Closing Date.

     Subject to the immediately following sentence, as promptly as practicable
subsequent to the transfer pursuant to clause (a) of this Section 2.1, and in
any event within 30 days thereafter, the Servicer, at the expense of the
Depositor, shall as to any Non-MERS Mortgage Loan with respect to which the
Depositor delivers an assignment of the Mortgage in blank pursuant to clause
(b)(iii)(A) of this Section 2.1, (i) complete each such assignment of Mortgage
to conform to clause (b)(iii)(B) of this Section 2.1, (ii) cause such
assignment to be in proper form for
recording in the appropriate public office for real property records, and
(iii) cause to be delivered for recording in the appropriate public office for
real property records each such assignment of the Mortgages, except that, with
respect to any assignments of Mortgage as to which the Servicer has not
received the information required to prepare such assignments in recordable
form, the Servicer’s obligation to do so and to deliver the same for such
recording shall be as soon as practicable after receipt of such information and
in any event within 30 days after receipt thereof. Notwithstanding the
foregoing, the Servicer need not cause to be recorded any assignment which
relates to a Non-MERS Mortgage Loan with respect to which the Mortgaged
Property is located in any state other than the Required Recordation States.

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     With respect to each MERS Mortgage Loan, the Servicer, at the expense of
the Depositor, shall take such actions as are necessary to cause the Trustee to
be clearly identified as the owner of each such Mortgage Loan on the records of
MERS for purposes of the system of recording transfers of beneficial ownership
of mortgages maintained by MERS.

     In the case of Mortgage Loans that have been prepaid in full as of the
Closing Date, the Depositor, in lieu of delivering the above documents to the
Trustee or the Custodian on its behalf, will deposit in the Collection Account
the portion of such payment that is required to be deposited in the Collection
Account pursuant to Section 3.5 hereof.

     Section 2.2 Acceptance by Trustee of the Mortgage Loans.

     The Trustee or the Custodian on behalf of the Trustee acknowledges receipt
of the documents identified in the initial certification in the form annexed
hereto as Exhibit C (the “Initial Certification”) and declares that it or the
Custodian holds and will hold such documents and the other documents delivered
to it constituting the Mortgage Files, and that it or the Custodian holds or
will hold such other assets as are included in the Trust Fund, in trust for the
exclusive use and benefit of all present and future Certificateholders and the
NIMS Insurer, if any.

     The Trustee agrees to execute and deliver or to cause the Custodian to
execute and deliver on the Closing Date to the Depositor, the Seller, the
Servicer and the NIMS Insurer, if any, an Initial Certification in the form
annexed hereto as Exhibit C. Based on its or the Custodian’s review and
examination, and only as to the documents identified in such Initial
Certification and subject to any exceptions noted in the schedule attached to
such certification, the Trustee or the Custodian on behalf of the Trustee
acknowledges that such documents appear regular on their face and relate to
such Mortgage Loan. Neither the Trustee nor the Custodian shall be under any
duty or obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable or appropriate for the represented purpose or that they have
actually been recorded in the real estate records or that they are other than
what they purport to be on their face.

     Not later than 90 days after the Closing Date, the Trustee shall deliver
or shall cause the Custodian to deliver to the Depositor, the Seller, the
Servicer and the NIMS Insurer, if any, a Final Certification in the form
annexed hereto as Exhibit D, with any applicable exceptions noted thereon.
Notwithstanding anything to the contrary contained herein, in the event there
are exceptions to the Final Certification, the Trustee or the Custodian on its
behalf may transmit such
exceptions electronically (via email) to the Depositor, the Seller, the
Servicer and the NIMS Insurer, if any, subject to the prior approval of the
Depositor, the Seller, the Servicer and the NIMS Insurer, if any.

     If, in the course of such review, the Trustee or the Custodian on behalf
of the Trustee finds any document constituting a part of a Mortgage File which
does not meet the requirements of Section 2.1 hereof (the “Mortgage Loan
Document Requirements”), the Trustee shall list or shall cause the Custodian to
list such as an exception in the Final Certification; provided, however, that
neither the Trustee nor the Custodian shall make any determination as to
whether (i) any endorsement is sufficient to transfer all right, title and
interest of the party so endorsing,

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as noteholder or assignee thereof, in and
to that Mortgage Note or (ii) any assignment is in recordable form or is
sufficient to effect the assignment of and transfer to the assignee thereof
under the mortgage to which the assignment relates. The Seller shall promptly
correct or cure such defect within 90 days from the date it was so notified of
such defect and, if Seller does not correct or cure such defect within such
period, the Seller shall either (a) substitute for the related Mortgage Loan a
Qualified Substitute Mortgage Loan, which substitution shall be accomplished in
the manner and subject to the conditions set forth in Section 2.3 hereof, or
(b) purchase such Mortgage Loan from the Trustee within 90 days from the date
the Seller was notified of such defect in writing at the Purchase Price of such
Mortgage Loan; provided, however, that in no event shall such substitution or
purchase occur more than 540 days from the Closing Date, except that if the
substitution or purchase of a Mortgage Loan pursuant to this provision is
required by reason of a delay in delivery of any documents by the appropriate
recording office, and there is a dispute between either the Servicer or the
Seller and the Trustee over the location or status of the recorded document,
then such substitution or purchase shall occur within 720 days from the Closing
Date. Any such substitution pursuant to (a) above shall not be effected prior
to the delivery to the Trustee and the NIMS Insurer, if any, of the Opinion of
Counsel required by Section 2.4 hereof, if any, and any substitution pursuant
to (a) above shall not be effected prior to the additional delivery to the
Trustee of a Request for Release substantially in the form of Exhibit J. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. The Purchase Price for any such Mortgage
Loan shall be deposited by the Seller in the Collection Account on or prior to
the Servicer Remittance Date for the Distribution Date in the month following
the month of repurchase and, upon receipt of written certification from the
Servicer of such deposit, the Trustee shall cause the Custodian to release the
related Mortgage File to the Seller and shall execute and deliver at the
Seller’s request such instruments of transfer or assignment prepared by the
Seller, in each case without recourse, as shall be necessary to vest in the
Seller, or a designee, the Trustee’s interest in any Mortgage Loan released
pursuant hereto. The foregoing remedy against the Seller for failure to
deliver Mortgage Loans that satisfy the Mortgage Loan Document Requirements is
provided in the Sale Agreement (which, in turn, has been assigned to the
Trustee pursuant to Section 2.1 hereof).

     The Trustee shall retain or shall cause the Custodian to retain possession
and custody of each Mortgage File in accordance with and subject to the terms
and conditions set forth herein. The Servicer shall promptly deliver to the
Trustee or the Custodian on its behalf, upon the execution or receipt thereof,
the originals of such other documents or instruments constituting the Mortgage
File as come into the possession of the Servicer from time to time.

     It is understood and agreed that the obligation of Seller to substitute
for or to purchase any Mortgage Loan which does not meet the requirements of
Section 2.1 hereof shall constitute the sole remedy respecting such defect
available to the Trustee, any Certificateholder and the NIMS Insurer, if any,
against the Depositor or Seller.

     Section 2.3 Representations, Warranties and Covenants of the Servicer,
the Seller and the Depositor.

     (a) The Servicer represents and warrants to the Depositor, the Seller and
the Trustee, for the benefit of the Certificateholders and the NIMS Insurer, if
any, that, as of the Closing Date:

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     (i) the Servicer is a corporation licensed as a mortgage servicer
duly organized, validly existing and in good standing under the laws of
the state of its incorporation and has, and had at all relevant times,
full corporate power to service the Mortgage Loans, to own its property,
to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement. The Servicer has all
necessary licenses and is qualified to transact business in and is in
good standing under the laws of each state where any Mortgaged Property
is located or is otherwise exempt under applicable law from such
qualification or is otherwise not required under applicable law to effect
such qualification and no demand for such qualification has been made
upon the Servicer by any state having jurisdiction;

     (ii) the execution and delivery of this Agreement by the Servicer
and the performance by it and compliance with the terms of this Agreement
will not (A) violate the Servicer’s articles of incorporation or by-laws
or constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default) under, or result in the breach or
acceleration of, any material contract, agreement or other instrument to
which the Servicer is a party or which may be applicable to the Servicer
or any of its assets or (B) result in the creation or imposition of any
lien, charge or encumbrance upon any of its properties pursuant to the
terms of any such contract, agreement or other instrument;

     (iii) the Servicer has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement to be
consummated by it, has duly authorized the execution, delivery and
performance of this Agreement, and has duly executed and delivered this
Agreement. This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of the Servicer, enforceable against it in accordance
with the terms hereof, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting the rights of creditors generally,
and by general equity principles (regardless of whether such enforcement
is considered in a proceeding in equity or at law);

     (iv) the Servicer is not in violation of, and the execution and
delivery of this Agreement by the Servicer and the performance by it and
compliance with the terms of this Agreement will not constitute a
violation with respect to any order or decree of any
court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction, which violation would materially
and adversely affect the condition (financial or otherwise) or operations
of the Servicer or any of its properties or materially and adversely
affect the performance of any of its duties hereunder;

     (v) there are no actions or proceedings against, or investigations
of, the Servicer pending or, to the knowledge of the Servicer,
threatened, before any court, administrative agency or other tribunal (A)
that, if determined adversely, would prohibit its entering into this
Agreement, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (C) that, if determined
adversely, would prohibit or materially and adversely affect the
performance by the Servicer of any of its obligations under, or the
validity or enforceability of, this Agreement;

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     (vi) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer;

     (vii) the Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant
contained in this Agreement;

     (viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this
Agreement, or if required, such approval has been obtained prior to the
Closing Date; and

     (ix) the Servicer is an approved seller/servicer of residential
mortgage loans of the same type as the Mortgage Loans, with the
facilities, procedures and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The
Servicer is in good standing to service mortgage loans, and no event has
occurred, including a change in insurance coverage, which would make the
Servicer unable to service the Mortgage Loans; and

     (x) neither this Agreement nor any statement, report or other
document furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
material statement of fact or omits to state a material fact necessary to
make the statements contained therein not misleading.

     (b) The Seller represents and warrants to the Depositor, the Servicer and
the Trustee, for the benefit of the Certificateholders and the NIMS Insurer, if
any, that, as of the Closing Date:

     (i) the Seller is a corporation licensed as a mortgage banker duly
organized, validly existing and in good standing under the laws of the
state of its incorporation and has, and had at all relevant times, full
corporate power to service the Mortgage Loans, to own its property, to
carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement. The Seller has all
necessary licenses and is qualified to transact business in and is in
good standing under the laws of each state where a Mortgaged Property is
located or is otherwise exempt under applicable law from
such qualification or is otherwise not required under applicable law
to effect such qualification and no demand for such qualification has
been made upon the Seller by any state having jurisdiction;

     (ii) the execution and delivery of this Agreement by the Seller and
the performance by it of and compliance with the terms of this Agreement
will not (A) violate the Seller’s articles of incorporation or by-laws or
constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the breach or
acceleration of, any material contract, agreement or other instrument to
which the Seller is a party or which may be applicable to the Seller or
any of its assets or (B) result in the creation or imposition of any
lien, charge or encumbrance upon any of its properties pursuant to the
terms of any such contract, agreement or other instrument;

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     (iii) the Seller has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement to be
consummated by it, has duly authorized the execution, delivery and
performance of this Agreement, and has duly executed and delivered this
Agreement. This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of the Seller, enforceable against it in accordance
with the terms hereof, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting the rights of creditors generally,
and by general equity principles (regardless of whether such enforcement
is considered in a proceeding in equity or at law);

     (iv) the Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and the performance by it and
compliance with the terms of this Agreement will not constitute a
violation with respect to, any order or decree of any court or any order
or regulation of any federal, state, municipal or governmental agency
having jurisdiction, which violation would materially and adversely
affect the condition (financial or otherwise) or operations of the Seller
or any of its properties or materially and adversely affect the
performance of any of its duties hereunder; and

     (v) there are no actions or proceedings against, or investigations
of, the Seller pending or, to the knowledge of the Seller, threatened,
before any court, administrative agency or other tribunal (A) that, if
determined adversely, would prohibit its entering into this Agreement,
(B) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (C) that, if determined adversely,
would prohibit or materially and adversely affect the performance by the
Seller of any of its obligations under, or the validity or enforceability
of, this Agreement.

     (c) The Depositor represents and warrants to the Seller, the Servicer and
the Trustee, for the benefit of the Certificateholders and the NIMS Insurer, if
any, that, as of the Closing Date:

     (i) the Depositor is a corporation, duly organized, validly existing
and in good standing under the laws of the state of its incorporation and
has, and had at all
relevant times, full corporate power to own its property, to carry
on its business as presently conducted and to enter into and perform its
obligations under this Agreement;

     (ii) the execution and delivery of this Agreement by the Depositor
and the performance by it of and compliance with the terms of this
Agreement will not (A) violate the Depositor’s articles of incorporation
or by-laws or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in
the breach or acceleration of, any material contract, agreement or other
instrument to which the Depositor is a party or which may be applicable
to the Depositor or any of its assets or (B) result in the creation or
imposition of any lien, charge or encumbrance upon any of its properties
pursuant to the terms of any such contract, agreement or other
instrument;

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     (iii) the Depositor has the full power and authority to enter into
and consummate all transactions contemplated by this Agreement to be
consummated by it, has duly authorized the execution, delivery and
performance of this Agreement, and has duly executed and delivered this
Agreement. This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of the Depositor, enforceable against it in accordance
with the terms hereof, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting the rights of creditors generally,
and by general equity principles (regardless of whether such enforcement
is considered in a proceeding in equity or at law);

     (iv) the Depositor is not in violation of, and the execution and
delivery of this Agreement by the Depositor and the performance by it and
compliance with the terms of this Agreement will not constitute a
violation with respect to, any order or decree of any court or any order
or regulation of any federal, state, municipal or governmental agency
having jurisdiction, which violation would materially and adversely
affect the condition (financial or otherwise) or operations of the
Depositor or any of its properties or materially and adversely affect the
performance of any of its duties hereunder; and

     (v) there are no actions or proceedings against, or investigations
of, the Depositor pending or, to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal (A)
that, if determined adversely, would prohibit its entering into this
Agreement, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (C) that, if determined
adversely, would prohibit or materially and adversely affect the
performance by the Depositor of any of its obligations under, or the
validity or enforceability of, this Agreement.

     (d) Pursuant to Section 2.1(a) hereof, the Depositor has assigned to the
Trustee, for the benefit of Certificateholders and the NIMS Insurer, if any,
its rights under the Sale Agreement, including each representation and warranty
of the Seller (and the applicable remedies) set forth in the Sale Agreement in
respect of the Mortgage Loans.

     (e) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by the Seller in respect of the Mortgage Loans
that materially and adversely
affects the interests of the Certificateholders in any such Mortgage Loan,
the party discovering such breach shall give prompt notice thereof to the other
parties hereto and the NIMS Insurer, if any. The Seller hereby covenants that
within 90 days of the earlier of its discovery or its receipt of written notice
from any party of a breach such of any representation or warranty which
materially and adversely affects the interests of the Certificateholders and
the NIMS Insurer, if any, in any Mortgage Loan (it being understood that any
such breach shall be deemed to materially and adversely affect the value of
such Mortgage Loan or the interest of the Trust Fund therein, if the Trust Fund
incurs a loss as the result of such breach), it shall cure such breach in all
material respects, and if such breach is not so cured, shall, (i) if such
90-day period expires prior to the second anniversary of the Closing Date,
remove such Mortgage Loan from the Trust Fund and substitute in its place a
Qualified Substitute Mortgage Loan, in the manner and subject to the conditions
set forth in this Section; or (ii) repurchase the affected Mortgage Loan or
Mortgage Loans from the Trustee at the Purchase Price in the manner set forth
below; provided,

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however, that any such substitution pursuant to clause (i)
above shall not be effected prior to the delivery to the Trustee of the Opinion
of Counsel required by Section 2.4 hereof, if any, and any such substitution
pursuant to clause (i) above shall not be effected prior to the additional
delivery to the Trustee or the Custodian on its behalf of a Request for Release
substantially in the form of Exhibit J and the Mortgage File for any such
Qualified Substitute Mortgage Loan. The Seller shall promptly reimburse the
Servicer, the Trustee and the NIMS Insurer, if any, for any expenses reasonably
incurred by the Servicer, the Trustee or the NIMS Insurer, if any, in respect
of enforcing the remedies against the Seller. With respect to the
representations and warranties described in this Section which are made to the
best of Seller’s knowledge, if it is discovered by either the Servicer, the
Trustee or the NIMS Insurer, if any, that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Mortgage Loan or the interests of the
Certificateholders or the NIMS Insurer, if any, therein, notwithstanding
Seller’s lack of knowledge with respect to the substance of such representation
or warranty, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.

     With respect to any Qualified Substitute Mortgage Loan, the Seller shall
deliver to the Trustee or the Custodian on its behalf for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by
Section 2.1, with the Mortgage Note endorsed and the Mortgage assigned as
required by Section 2.1. No substitution is permitted to be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Qualified Substitute Mortgage Loans in the month of
substitution shall not be part of the Trust Fund and will be retained by Seller
on the next succeeding Distribution Date. For the month of substitution,
distributions to Certificateholders will include the monthly payment due on any
Deleted Mortgage Loan for such month and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Servicer shall amend the Mortgage Loan Schedule for the benefit of
the Certificateholders to reflect the removal of such Deleted Mortgage Loan and
the substitution of the Qualified Substitute Mortgage Loan or Loans and the
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee or the
Custodian on its behalf and the NIMS Insurer, if any. Upon such substitution,
the Qualified Substitute Mortgage Loan or Loans shall be subject to the terms
of this Agreement in all respects, and the Seller shall be deemed to have made
with respect to such Qualified Substitute
Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties made by Seller pursuant to the Sale Agreement
with respect to such Mortgage Loan. Upon any such substitution and the deposit
to the Collection Account of the amount required to be deposited therein in
connection with such substitution as provided in the following paragraph, the
Trustee shall release or shall cause the Custodian to release the Mortgage File
held for the benefit of the Certificateholders relating to such Deleted
Mortgage Loan to the Seller and the Trustee and shall execute and deliver at
the Seller’s direction such instruments of transfer or assignment prepared by
the Seller, in each case without recourse, as shall be necessary to vest title
in the Seller, or its designee, the Trustee’s interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.3.

     For any month in which Seller substitutes one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will
determine the amount (if any)

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by which the aggregate principal balance of all
such Qualified Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Unpaid Principal Balance of all such Deleted Mortgage Loans
(after application of the scheduled principal portion of the monthly payments
due in the month of substitution). The amount of such shortage (the
“Substitution Adjustment Amount”) plus an amount equal to the aggregate of any
unreimbursed Advances with respect to such Deleted Mortgage Loans shall be
deposited in the Collection Account by Seller on or before the Servicer
Remittance Date for the Distribution Date in the month succeeding the calendar
month during which the related Mortgage Loan became required to be purchased or
replaced hereunder.

     In the event that Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Distribution Account prior to
the Distribution Date in the month following the month during which Seller
became obligated hereunder to repurchase or replace such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of the Opinion of Counsel
required by Section 2.4 hereof and receipt of a Request for Release in the form
of Exhibit J hereto, the Trustee shall release or shall cause the Custodian to
release the related Mortgage File held for the benefit of the
Certificateholders and the NIMS Insurer, if any, to Seller, and the Trustee
shall execute and deliver or shall cause the Custodian to execute and deliver
at Seller’s direction such instruments of transfer or assignment prepared by
such Person, in each case without recourse, as shall be necessary to transfer
title from the Trustee. It is understood and agreed that the obligation under
this Agreement of the Seller to cure, repurchase or replace any Mortgage Loan
as to which a breach has occurred and is continuing shall constitute the sole
remedy respecting such breach available to Certificateholders, the NIMS
Insurer, if any, or the Trustee on their behalf.

     The representations and warranties made pursuant to this Section 2.3 (and
the representations and warranties with respect to the Mortgage Loans made in
the Sale Agreement) shall survive delivery of the respective Mortgage Files to
the Trustee or the Custodian for the benefit of the Certificateholders and the
NIMS Insurer, if any.

     (f) Upon discovery by the Depositor, the Servicer, the Seller or the
Trustee that any Mortgage Loan does not constitute a “qualified mortgage”
within the meaning of Section 860G(a)(3) of the Code, the party discovering
such fact shall promptly (and in any event within five (5) Business Days of
discovery) give written notice thereof to the other parties and the
NIMS Insurer, if any. In connection therewith, the Trustee shall require
Seller, at Seller’s option, to either (i) substitute, if the conditions in
Section 2.3(e) with respect to substitutions are satisfied, a Qualified
Substitute Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the
affected Mortgage Loan within 90 days of such discovery in the same manner as
it would a Mortgage Loan for a breach of representation or warranty made
pursuant to this Section 2.3. The Trustee shall reconvey or shall cause the
Custodian to reconvey to the Seller the Mortgage Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty contained
in this Section 2.3.

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     Section 2.4 Delivery of Opinion of Counsel in Connection with
Substitutions.

     Notwithstanding any contrary provision of this Agreement, no substitution
pursuant to Section 2.2 or Section 2.3 shall be made more than 90 days after
the Closing Date unless the Depositor or Seller delivers to the Trustee and the
NIMS Insurer, if any, an Opinion of Counsel, which Opinion of Counsel shall not
be at the expense of either the Trustee or the Trust Fund, addressed to the
Trustee and the NIMS Insurer, if any, to the effect that such substitution will
not result in an Adverse REMIC Event.

     Section 2.5 Execution and Delivery of Certificates.

     The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and the NIMS Insurer, if any, and to perform the duties set forth
in this Agreement to the best of its ability, to the end that the interests of
the Holders of the Certificates may be adequately and effectively protected.

ARTICLE III

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

     Section 3.1 Servicer to Service Mortgage Loans.

     For and on behalf of the Certificateholders and the NIMS Insurer, if any,
the Servicer shall service and administer the Mortgage Loans in accordance with
the terms of this Agreement and the Servicing Standard. In connection with
such servicing and administration, the Servicer shall have full power and
authority, acting alone and/or through subservicers as provided in Section 3.2
hereof, to do or cause to be done any and all things that it may deem necessary
or desirable in connection with such servicing and administration, including
but not limited to, the power and authority, subject to the terms hereof (i) to
execute and deliver, on behalf of the Certificateholders, the NIMS Insurer, if
any, and the Trustee, customary consents or waivers and other instruments and
documents, (ii) to consent to transfers of any Mortgaged Property and
assumptions of the Mortgage Notes and related Mortgages (but only in the manner
provided in
this Agreement), (iii) to collect any Insurance Proceeds and other
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan; provided
that the Servicer shall not take any action that is inconsistent with or
prejudices the interests of the Trust Fund or the Certificateholders and the
NIMS Insurer, if any, in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee and the Certificateholders under this Agreement. The
Servicer shall represent and protect the interests of the Trust Fund (or the
Trustee on behalf of the Trust Fund) in full compliance with the Servicing
Standard in any claim, proceeding or litigation regarding a Mortgage Loan,
provided, however, that unless (x) the Mortgagor is in default with respect to
the Mortgage Loan, or such default is, in the judgment of the Servicer,
imminent or (y) in the absence of default or imminent default, any such waiver,
modification, postponement or

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indulgence would not cause an Adverse REMIC
Event, the Servicer may not permit any modification with respect to any
Mortgage Loan. Without limiting the generality of the foregoing, the Servicer
in the name of the Depositor and the Trustee, is hereby authorized and
empowered by the Depositor and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of
the Trustee, the Depositor, the Certificateholders, the NIMS Insurer, if any,
or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments, with
respect to the Mortgage Loans, and with respect to the Mortgaged Properties
held for the benefit of the Certificateholders and the NIMS Insurer, if any.

     In accordance with the Servicing Standard, the Servicer shall make
Servicing Advances as necessary for the purpose of effecting the payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
reimbursable in the first instance from related collections from the Mortgagors
pursuant to Section 3.6 hereof, and further as provided in Section 3.8 hereof.
The costs incurred by the Servicer, if any, in effecting the timely payments of
taxes and assessments on the Mortgaged Properties and related insurance
premiums shall not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Unpaid Principal Balances of the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so
permit.

     The Trustee shall execute such powers of attorney in the form of Exhibit M
attached hereto provided to it by the Servicer as are necessary or appropriate
to enable the Servicer to execute in the name of the Trustee or the Custodian,
as applicable, all documents reasonably required to perform the servicing
functions described in this Article III. The Trustee shall have no
responsibility for any action of the Servicer pursuant to any such limited
power of attorney and shall be indemnified by the Servicer for any cost,
liability or expense incurred by the Trustee in connection with the Servicer’s
misuse of any such power of attorney.

     Section 3.2 Subservicing; Enforcement of the Obligations of the
Servicer.

     (a) The Servicer may arrange for the subservicing of any Mortgage Loan by
a subservicer, which may be an affiliate of the Servicer, pursuant to a
subservicing agreement; provided, however, that such subservicing arrangement
and the terms of the related subservicing agreement must provide for the
servicing of such Mortgage Loans in a manner consistent with the servicing
arrangements contemplated hereunder. Unless the context otherwise requires,
references in this Agreement to actions taken or to be taken by the Servicer in
servicing the Mortgage Loans include actions taken or to be taken by a
subservicer on behalf of the Servicer. Notwithstanding the provisions of any
subservicing agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a subservicer or reference
to actions taken through a subservicer or otherwise, the Servicer shall remain
obligated and liable to the Depositor, the Trustee, the Certificateholders and
the NIMS Insurer, if any, for the servicing and administration of the Mortgage
Loans in accordance with the provisions of this Agreement without diminution of
such obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. All actions of each
subservicer performed pursuant to the

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related subservicing agreement shall be
performed as an agent of the Servicer with the same force and effect as if
performed directly by the Servicer.

     (b) For purposes of this Agreement, the Servicer shall be deemed to have
received any collections, recoveries or payments with respect to the Mortgage
Loans that are received by a Subservicer regardless of whether such payments
are remitted by the subservicer to the Servicer.

     Section 3.3 Rights of the Depositor and the Trustee in Respect of the
Servicer.

     The Depositor may, but is not obligated to, enforce the obligations of the
Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Servicer hereunder and in
connection with any such defaulted obligation to exercise the related rights of
the Servicer hereunder; provided that the Servicer shall not be relieved of any
of its obligations hereunder by virtue of such performance by the Depositor or
its designee. Neither the Trustee nor the Depositor shall have any
responsibility or liability for any action or failure to act by the Servicer
nor shall the Trustee or the Depositor be obligated to supervise the
performance of the Servicer hereunder or otherwise.

     Section 3.4 Trustee to Act as Servicer.

     In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of the
Servicer pursuant to Section 7.1 hereof arising thereafter (provided that the
Trustee shall not be (i) liable for losses of the Servicer pursuant to Section
3.5(e) hereof or any acts or omissions of the predecessor Servicer hereunder,
(ii) obligated to make Advances or Servicing Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder including, but not limited to,
repurchases or substitutions of Mortgage Loans pursuant to Section 2.2 or 2.3
hereof, (iv) responsible for expenses of the Servicer pursuant to Section 2.3
hereof or (v) deemed to have made any representations and warranties of the
Servicer hereunder). If the Servicer shall for any reason no longer be the
Servicer (including by reason of any Event of Default), the Trustee or its
successor shall succeed to any rights and obligations of the Servicer under any
subservicing agreement then in force.

     The Servicer shall, upon request of the Trustee, but at the expense of the
Servicer or at the expense of the Trust Fund if not paid by the Servicer,
deliver to the assuming party all documents and records relating to any
subservicing agreement or substitute subservicing agreement and the Mortgage
Loans then being serviced thereunder and an accounting of amounts collected or
held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of the substitute subservicing agreement to the assuming
party.

     Section 3.5 Collection of Mortgage Loan Payments; Collection Account;
Distribution Account.

     (a) The Servicer shall make reasonable efforts in accordance with the
Servicing Standard to collect all payments called for under the terms and
provisions of the Mortgage Loans

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to the extent such procedures shall be
consistent with this Agreement. Consistent with the foregoing, and subject to
the provisions of Section 3.1 hereof, the Servicer may in its discretion (i)
waive any late payment charge or penalty interest and (ii) extend the due dates
for payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that the Servicer cannot extend the maturity of any such
Mortgage Loan past the date on which the final payment is due on the latest
maturing Mortgage Loan as of the Cut-off Date. In the event of any such
arrangement, any Advance required to be made by the Servicer on the related
Mortgage Loan in accordance with the provisions hereof (i) with respect to the
Prepayment Period in which such arrangement became effective shall be made in
accordance with the amortization schedule of such Mortgage Loan without giving
effect to the modification thereof by reason of such arrangements and (ii) with
respect to any Prepayment Period thereafter shall be made in accordance with
the amortization schedule of such Mortgage Loan as so modified. The Servicer
shall not be required to institute or join in litigation with respect to
collection of any payment (whether under a Mortgage, Mortgage Note or otherwise
or against any public or governmental authority with respect to a taking or
condemnation) if it reasonably believes that enforcing the provision of the
Mortgage or other instrument pursuant to which such payment is required is
prohibited by applicable law.

     The Servicer shall comply with the provisions of Section 3.21 hereof with
respect to each Prepayment Penalty related to the Mortgage Loans.

     (b) The Servicer shall establish and maintain a Collection Account,
entitled “Chase Manhattan Mortgage Corporation in Trust for Wells Fargo Bank,
N.A., as Trustee for Aegis Asset Backed Securities Trust Mortgage Pass-Through
Certificates, Series 2004-3,” for the benefit of the Certificateholders into
which the Servicer shall deposit or cause to be deposited as soon as
practicable following receipt but in no event later than two Business Days
after receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by subservicers or received by it in respect
of Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest due on the Mortgage Loans on or before the Cut-off Date)
and the following amounts required to be deposited hereunder:

     (i) all payments on account of principal on the Mortgage Loans,
including Principal Prepayments;

     (ii) all payments on account of interest on the Mortgage Loans, net
of the related Servicing Fee and any Compensating Interest payments
required to be deposited by the Servicer hereunder;

     (iii) any Prepayment Penalty required to be deposited by the
Servicer hereunder;

     (iv) all Insurance Proceeds and Liquidation Proceeds, other than
proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Servicer’s
normal servicing procedures;

     (v) any amount required to be deposited by the Servicer pursuant to
Section 3.5(e) in connection with any losses on Eligible investments;

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     (vi) any amounts required to be deposited by the Servicer pursuant
to Section 3.9(b) and (d) hereof, and in respect of net monthly rental
income from REO Property pursuant to Section 3.11 hereof;

     (vii) all Substitution Adjustment Amounts; and

     (viii) all Advances made by the Servicer pursuant to Section 3.19
hereof.

     The foregoing requirements for remittance by the Servicer shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges, assumption
fees or amounts attributable to reimbursements of Advances, if collected, need
not be remitted by the Servicer. In the event that the Servicer shall remit
any amount not required to be remitted, it may at any time withdraw or direct
the institution maintaining the Collection Account to withdraw such amount from
the Collection Account, any provision herein to the contrary notwithstanding.
Such withdrawal or direction may be accomplished by delivering written notice
thereof to the Trustee or such other institution maintaining the Collection
Account which describes the amounts deposited in error in the Collection Account. The Servicer shall maintain adequate records with
respect to all withdrawals made pursuant to this Section. All funds deposited
in the Collection Account shall be held in trust for the Certificateholders and
the NIMS Insurer, if any, until withdrawn in accordance with Section 3.8.

     If the Collection Account ceases to be an Eligible Account, the Servicer
shall establish a new Collection Account that is an Eligible Account within 15
days and transfer all funds and investment property on deposit in such existing
Collection Account into such new Collection Account.

     (c) [Reserved]

     (d) The Trustee shall establish and maintain, on behalf of the
Certificateholders and the NIMS Insurer, if any, the Distribution Account. On
each Servicer Remittance Date, the Servicer shall remit to the Trustee for
deposit in the Distribution Account all amounts on deposit in the Collection
Account that are available for distribution to Certificateholders and amounts
that are available for payment to the Swap Counterparty for such date. In
addition, the Trustee shall deposit in the Distribution Account any amounts
required to be deposited by it pursuant to Section 3.5(e) in connection with
losses on Eligible Investments in the Distribution Account.

     In the event that the Servicer shall remit any amount not required to be
remitted by it, it may at any time direct the Trustee to withdraw such amount
from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer’s
Certificate to the Trustee and the NIMS Insurer, if any, which describes the
amounts deposited in error in the Distribution Account. All funds deposited in
the Distribution Account shall be held by the Trustee in trust for the
Certificateholders and the NIMS Insurer, if any, until disbursed in accordance
with this Agreement or withdrawn in accordance with Section 3.8. In no event
shall the Trustee incur liability for withdrawals from the Distribution Account
at the direction of the Servicer.

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     If the Distribution Account ceases to be an Eligible Account, the Trustee
shall establish a new Distribution Account that is an Eligible Account within
15 days and transfer all funds and investment property on deposit in such
existing Distribution Account into such new Distribution Account.

     (e) Amounts on deposit in the Collection Account shall be invested as
directed by the Servicer, and amounts on deposit in the Distribution Account
shall be invested as directed by the Trustee, in each case in Eligible
Investments which shall mature not later than (i) in the case of the Collection
Account, the second Business Day next preceding the related Servicer Remittance
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such account, then such Permitted Investment shall
mature not later than the Business Day next preceding such Servicer Remittance
Date), and (ii) in the case of the Distribution Account, the Business Day next
preceding the related Distribution Date (except that if such Permitted
Investment is an obligation of the institution that maintains such fund or
account, then such Permitted Investment shall mature not later than such
Distribution Date) and, in each case, shall not be sold or disposed of prior to
its maturity. All such Eligible Investments shall be made in the name of the
Trustee, for the benefit of the Certificateholders and the NIMS Insurer, if
any. All income and gain net of any losses realized from any such investment of
funds on deposit in the Collection Account shall be for the benefit of the
Servicer as servicing compensation and all income and gain net of any losses
realized from any such investment of funds on deposit in the Distribution
Account shall be for the benefit of the Trustee. The amount of any realized
losses in the Collection Account in respect of any such investments shall
promptly be deposited by the Servicer in the Collection Account and the amount
of any realized losses in the Distribution Account in respect of any such
investments shall promptly be deposited therein by the Trustee. The Trustee in
its fiduciary capacity shall not be liable for the amount of any loss incurred
in respect of any investment or lack of investment of funds held in the
Collection Account and made in accordance with this Section 3.5.

     Section 3.6 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.

     (a) To the extent required by the related Mortgage Note and not violative
of current law, the Servicer shall establish and maintain one or more accounts
(each, an “Escrow Account”) and deposit and retain therein all collections from
the Mortgagors (or advances by the Servicer) for the payment of taxes,
assessments, hazard insurance premiums or comparable items for the account of
the Mortgagors. Nothing herein shall require the Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.

     (b) Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to
reimburse the Servicer out of related collections for any payments made
pursuant to Sections 3.1 hereof (with respect to taxes and assessments and
insurance premiums) and 3.9 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums determined to be overages, to pay interest,
if required by law or the terms of the related Mortgage or Mortgage Note, to
Mortgagors on balances in the Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
9.1 hereof. The Escrow Accounts shall not be a part of the Trust Fund.

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     (c) The Servicer shall advance, as Servicing Advances, any payments
referred to in Section 3.6(a) that are not timely paid by the Mortgagors on the
date when the tax, premium or other cost for which such payment is intended is
due, provided, however, that the Servicer shall not be required to make any
such advance if such advance, in the good faith judgment of the Servicer, would
constitute a Nonrecoverable Advance.

     Section 3.7 Access to Certain Documentation and Information Regarding
the Mortgage Loans.

     The Servicer shall afford the Depositor, the Seller, the Trustee and the
NIMS Insurer, if any, reasonable access to all records and documentation
regarding the Mortgage Loans and all accounts, insurance information and other
matters relating to this Agreement, such access being afforded without charge,
but only upon five Business Days prior written notice and during normal
business hours at the office designated by the Servicer.

     Upon five Business Days’ prior written notice, the Servicer shall provide
to each Certificateholder that is a savings and loan association, bank or
insurance company and the NIMS Insurer, if any, certain reports and reasonable
access to information and documentation regarding the Mortgage Loans sufficient
to permit such Certificateholder to comply with applicable regulations of the
OTS or other regulatory authorities with respect to investment in the
Certificates; provided that the Servicer shall be entitled to be reimbursed by
each such Certificateholder for actual expenses incurred by the Servicer in
providing such reports and access.

     Section 3.8 Permitted Withdrawals from the Collection Account and
Distribution Account.

     (a) The Servicer may from time to time make withdrawals from the
Collection Account for the following purposes:

     (i) to the extent not previously retained by the Servicer, to pay to
the Servicer the servicing compensation to which it is entitled pursuant
to Section 3.14, and earnings on or investment income with respect to
funds in or credited to the Collection Account as additional servicing
compensation;

     (ii) to the extent not previously retained by the Servicer, to
reimburse the Servicer for unreimbursed Advances and Servicing Advances
made by it, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on any Mortgage Loan in respect of
which any such Advance or Servicing Advance was made;

     (iii) to reimburse the Servicer for any Nonrecoverable Advance
previously made;

     (iv) to reimburse the Servicer for Insured Expenses from the related
Insurance Proceeds;

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     (v) to reimburse the Servicer for unpaid Servicing Fees as provided
in Section 3.11 hereof;

     (vi) to pay to the purchaser, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased pursuant to
Section 2.2, 2.3 or 3.11, all amounts received thereon after the date of
such purchase;

     (vii) to reimburse the Servicer, the Seller or the Depositor for
expenses incurred by any of them and reimbursable pursuant to Section 6.3
hereof;

     (viii) to withdraw any amount deposited in the Collection Account
and not required to be deposited therein;

     (ix) on or prior to each Servicer Remittance Date, to withdraw an
amount equal to the amount then on deposit in the Collection Account with
respect to the related Distribution Date (minus any withdrawals permitted
to be made by the Servicer pursuant to this Section 3.8 and amounts permitted to be retained in the
Collection Account for remittance on subsequent Servicer Remittance
Dates) and remit such amount to the Trustee for deposit in the
Distribution Account; and

     (x) to clear and terminate the Collection Account upon termination
of this Agreement pursuant to Section 9.1 hereof.

     The Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Collection Account pursuant to such subclauses (i), (ii), (iv), (v) and
(vi). Prior to making any withdrawal from the Collection Account pursuant to
subclause (iii), the Servicer shall deliver to the Trustee and the NIMS
Insurer, if any, an Officer’s Certificate of a Servicing Officer indicating the
amount of any previous Advance determined by the Servicer to be a
Nonrecoverable Advance and identifying the related Mortgage Loan(s), and their
respective portions of such Nonrecoverable Advance.

     (b) [Reserved]

     (c) The Trustee shall withdraw funds from the Distribution Account for
distributions to Certificateholders in the manner specified in this Agreement.
In addition, the Trustee may prior to making the distribution pursuant to
Section 4.1 from time to time make withdrawals from the Distribution Account
for the following purposes:

     (i) to pay to itself the Trustee Fee and reimburse itself for
reasonable expenses and costs and any indemnities to which it is owed
pursuant to Section 8.5 hereof for the related Distribution Date;

     (ii) to the extent not previously retained by the Servicer, to pay
to the Servicer the servicing compensation to which it is entitled
pursuant to Section 3.14;

     (iii) to pay to the Trustee earnings on or investment income with
respect to funds in the Distribution Account;

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     (iv) to pay any monthly Bulk PMI policy premium;

     (v) to withdraw and return to the Servicer or the Trustee, as
applicable, any amount deposited in the Distribution Account and not
required to be deposited therein, including any amounts owed to the
Servicer as part of the Servicing Fee in accordance with the terms
hereunder; and

     (vi) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.1 hereof.

     Section 3.9 Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies.

     (a) The Servicer shall cause to be maintained, for each Mortgage Loan,
hazard insurance with extended coverage in an amount that is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such Mortgage Loan;
(ii) the outstanding principal balance of the Mortgage Loan; and (iii) the
maximum amount available in the locality of the related Mortgaged Property from
insurers generally acceptable to institutional residential mortgage lenders
without payment of extraordinary premium. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. Any amounts collected by the Servicer under any
such policies (other than the amounts to be applied to the restoration or
repair of the related Mortgaged Property or amounts released to the Mortgagor
in accordance with the Servicer’s normal servicing procedures) shall be
deposited in the Collection Account. Any cost incurred by the Servicer in
maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Servicer as Servicing Advances or, if applicable,
as Nonrecoverable Advances. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property is located at the
time of origination of the Mortgage Loan in a federally designated special
flood hazard area and such area is participating in the national flood
insurance program, the Servicer shall cause flood insurance to be maintained
with respect to such Mortgage Loan. Such flood insurance shall be in an amount
equal to the least of (i) the original principal balance of the related
Mortgage Loan, (ii) the replacement value of the improvements which are part of
such Mortgaged Property, and (iii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program.

     (b) In the event that the Servicer shall obtain and maintain a blanket
policy insuring against hazard losses on any or all of the Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first sentence of this Section with respect to all of the Mortgage Loans so
covered, it being understood and agreed that such policy may contain a
deductible clause on terms substantially equivalent to those commercially
available and maintained by comparable servicers. If such policy contains a
deductible clause, the Servicer shall, in the event that there shall not have
been maintained on the related

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Mortgaged Property a policy complying with the
first sentence of this Section, and there shall have been a loss that would
have been covered by such policy, deposit in the Collection Account the amount
not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as Servicer of the Mortgage Loans,
the Servicer agrees to present, on behalf of itself, the Depositor, and the
Trustee for the benefit of the Certificateholders and the NIMS Insurer, if any,
claims under any such blanket policy.

     (c) The Servicer shall not take any action which would result in
non-coverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of the Servicer, would have been covered thereunder.
The Servicer shall not cancel or refuse to renew any such Primary Mortgage
Insurance Policy that is in effect at the date of the initial issuance of the
Certificates and is required to be kept in force hereunder unless the
replacement Primary Mortgage Insurance Policy for such canceled or non-renewed
policy is maintained with a Qualified Insurer.

     The Servicer shall not be required to maintain any Primary Mortgage
Insurance Policy (i) with respect to any Mortgage Loan with a Loan-to-Value
Ratio less than or equal to 80% (or such lower Loan-to-Value Ratio as may be
provided by applicable law) as of any date of determination or, based on a new
appraisal, the principal balance of such Mortgage Loan represents 80% or less
of the new appraised value (or other method of determination as may be provided
by applicable law) or (ii) if maintaining such Primary Mortgage Insurance
Policy is otherwise prohibited by applicable law.

     The Servicer agrees to effect the timely payment of the premiums on each
Primary Mortgage Insurance Policy (other than any Bulk PMI Policy premium), and
such costs not otherwise recoverable shall be recoverable by the Servicer as
Servicing Advances or, if applicable, as Nonrecoverable Advances.

     (d) In connection with its activities as Servicer of the Mortgage Loans,
the Servicer agrees to present on behalf of itself, the Trustee,
Certificateholders and the NIMS Insurer, if any, claims to the insurer under
any Primary Insurance Policies and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any Primary Insurance
Policies respecting defaulted Mortgage Loans. Any amounts collected by the
Servicer under any Primary Insurance Policies shall be deposited in the
Collection Account.

     Section 3.10 Enforcement of Due-on-Sale Clauses; Assumption
Agreements.

     (a) Except as otherwise provided in this Section, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the Servicer shall to
the extent that it has knowledge of such conveyance enforce any due-on-sale
clause contained in any Mortgage Note or Mortgage, to the extent, in the
Servicer’s reasonable judgment, enforcement is permitted under applicable law
and governmental regulations, provided, however, that the Servicer shall not be
required to take such action if, in its sole business judgment, the Servicer
believes it is not in the best interests of the Trust Fund. Notwithstanding
the foregoing, the Servicer is not required to exercise such rights with
respect to a Mortgage Loan if the Person to whom the related Mortgaged Property
has been conveyed or is proposed to be conveyed satisfies the terms and
conditions contained in the Mortgage Note and Mortgage related thereto and the
consent of

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the mortgagee under such Mortgage Note or Mortgage is not otherwise
so required under such Mortgage Note or Mortgage as a condition to such
transfer. In the event that the Servicer is prohibited by law from enforcing
any such due-on-sale clause, or if nonenforcement is otherwise permitted
hereunder, the Servicer is authorized, subject to Section 3.10(b), to take or
enter into an assumption and modification agreement from or with the person to
whom such property has been or is about to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, unless prohibited by
applicable state law, the Mortgagor remains liable thereon, provided that the
Mortgage Loan shall continue to be covered (if so covered before the Servicer
enters such agreement) by the applicable Required Insurance Policies. The
Servicer, subject to Section 3.10(b), is also authorized with the prior
approval of the insurers under any Required Insurance Policies to enter into a
substitution of liability agreement with such Person, pursuant to which the
original Mortgagor is released from liability and such Person is substituted as
Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
foregoing, the Servicer shall not be deemed to be in default under this Section by reason
of any transfer or assumption which the Servicer reasonably believes it is
restricted by law from preventing, for any reason whatsoever.

     (b) Subject to the Servicer’s duty to enforce any due-on-sale clause to
the extent set forth in Section 3.10(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such
Person is to enter into an assumption agreement or modification agreement or
supplement to the Mortgage Note or Mortgage that requires the signature of the
Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Servicer shall
prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
may be changed. In addition, the substitute Mortgagor and the Mortgaged
Property must be acceptable to the Servicer in accordance with its underwriting
standards as then in effect. Together with each such substitution, assumption
or other agreement or instrument delivered to the Trustee for execution by it,
the Servicer shall deliver an Officer’s Certificate signed by a Servicing
Officer stating that the requirements of this subsection have been met in
connection therewith. The Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation.

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     Section 3.11 Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans.

     (a) Subject to the limitations set forth in Sections 3.5(a), 3.11(b),
3.11(f), and 3.11(i), the Servicer shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments.
In connection with such foreclosure or other conversion, the Servicer shall
follow such practices and procedures as it shall deem necessary or advisable
and as shall be normal and usual in its general mortgage servicing activities;
provided, however, that the Servicer shall not be required to expend its own
funds in connection with any foreclosure or towards the restoration of any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account). The
Servicer shall be responsible for all other costs and expenses incurred by it
in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the Liquidation Proceeds with respect to the related
Mortgaged Property, as Servicing Advances or, if applicable, as Nonrecoverable
Advances.

     (b) If the Servicer has actual knowledge that a Mortgaged Property which
the Servicer is contemplating acquiring in foreclosure or by deed in lieu of
foreclosure is located within a one mile radius of any site with material
environmental or hazardous waste risks known to the Servicer, the Servicer
will, prior to acquiring the Mortgaged Property, consider such risks and shall
proceed with such in foreclosure or by deed in lieu of foreclosure only if the
Servicer reasonably determines that doing so shall more like than not be in the
best interests of the Trust Fund, considering all relevant factors including
such environmental matters. For the purpose of this Section, actual knowledge
of the Servicer means actual knowledge of a Servicing Officer involved in the
servicing of the relevant Mortgage Loan at the time such knowledge was
acquired. Actual knowledge of the Servicer does not include knowledge
imputable by virtue of the availability of or accessibility to information
relating to environmental or hazardous waste sites or the locations thereof.

     (c) With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee’s name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Servicer shall
ensure that the title to such REO Property references this Agreement and the
Trustee’s capacity thereunder. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the
Certificateholders and the NIMS Insurer, if any, in its sole discretion, rent
or decline to rent the same, or any part thereof, as the Servicer deems to be
in the best interest of the Certificateholders and the NIMS Insurer, if any,
for the period prior to the sale of such REO Property. The Servicer shall
prepare for and deliver to the Trustee and the NIMS Insurer, if any, a
statement with respect to any REO

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Property that has been rented showing the
aggregate rental income received and all expenses incurred in connection with
the management and maintenance of such REO Property at such times as is
necessary to enable the Trustee to comply with the reporting requirements of
the REMIC Provisions. The net monthly rental income, if any, from such REO
Property shall be deposited in the Collection Account no later than the close
of business on each Determination Date. The Servicer shall perform the tax
reporting and withholding required by Sections 1445 and 6050J of the Code with
respect to foreclosures and abandonments, the tax reporting required by Section
6050H of the Code with respect to the receipt of mortgage interest from
individuals and any tax reporting required by Section 6050P of the Code with
respect to the cancellation of indebtedness by certain financial entities, by
preparing such tax and information returns as may be required, in the form
required, and delivering the same to the Trustee for filing.

     (d) In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
the close of the third taxable year after its acquisition by the Trust Fund
unless the Trustee and the NIMS Insurer, if any, shall have been supplied with an Opinion of Counsel (which shall not be at the expense of
any such recipient) to the effect that the holding by the Trust Fund of such
Mortgaged Property subsequent to such three-year period will not result in an
Adverse REMIC Event, in which case the Trust Fund may continue to hold such
Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel). Notwithstanding any other provision of this Agreement, no Mortgaged
Property acquired by the Trust Fund shall be rented (or allowed to continue to
be rented) or otherwise used for the production of income by or on behalf of
the Trust Fund in such a manner or pursuant to any terms that would (i) cause
such Mortgaged Property to fail to qualify as “foreclosure property” within the
meaning of Section 860G(a)(8) of the Code or (ii) cause an Adverse REMIC Event,
unless the Servicer has agreed to indemnify and hold harmless the Trust Fund
with respect to the imposition of any such taxes.

     (e) In the event of a default on a Mortgage Loan one or more of whose
obligor is not a “United States person,” as that term is defined in Section
7701(a)(30) of the Code, in connection with any foreclosure or acquisition of a
deed in lieu of foreclosure (together, “foreclosure”) in respect of such
Mortgage Loan, the Servicer will cause compliance with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the
proceeds of such foreclosure except to the extent, if any, that proceeds of
such foreclosure are required to be remitted to the obligor on such Mortgage
Loan.

     (f) The decision of the Servicer to foreclose, or to continue the
foreclosure process, on a defaulted Mortgage Loan shall be subject to a
determination by the Servicer that the related Mortgaged Property will not fail
to qualify as “foreclosure property” within meaning of Section 860G(a)(8) of
the Code and that the proceeds of such foreclosure would more likely than not
exceed the costs and expenses of bringing such a proceeding and liquidating the
REO expected to be obtained through such foreclosure. Promptly upon making any
determination in accordance with the preceding sentence not to foreclose, or to
discontinue the foreclosure process, as to any Mortgage Loan, the Servicer
shall deliver to the Trustee an Officer’s Certificate signed by a Servicing
Officer identifying the Mortgage Loans as to which such

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determination has been
made setting forth the basis for such determination in a form acceptable to the
Trustee.

     (g) The income earned from the management of any REO Properties, net of
reimbursement to the Servicer for expenses incurred (including any property or
other taxes) in connection with such management and net of unreimbursed Master
Servicing Fees, Advances and Servicing Advances, shall be applied to the
payment of principal of and interest on the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the Collection Account. To the extent the net income
received during any calendar month is in excess of the amount attributable to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan for such calendar month, such excess shall be considered
to be a partial prepayment of principal of the related Mortgage Loan.

     (h) The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Servicer for any related unreimbursed
Servicing Advances and Servicing Fees; second, to reimburse the Servicer for
any unreimbursed Advances; third, to reimburse the Collection Account for any
Nonrecoverable Advances (or portions thereof) that were previously withdrawn by
the Servicer pursuant to Section 3.8(a)(iii) that related to such Mortgage
Loan; fourth, to accrued and unpaid interest (to the extent no Advance has been
made for such amount or any such Advance has been reimbursed) on the Mortgage
Loan or related REO Property, at the Mortgage Rate (net of the Servicing Fee
Rate) to the Due Date occurring in the month in which such amounts are required
to be distributed; and fifth, as a recovery of principal of the Mortgage Loan.
Excess Proceeds, if any, from the liquidation of a Liquidated Mortgage Loan
will be part of Monthly Excess Cashflow.

     (i) Notwithstanding any provision hereof, in connection with the
foreclosure or other conversion of defaulted assets, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable in its
sole discretion, and as shall be normal and usual in its general mortgage
servicing activities.

     The Servicer shall not conduct any such disposition that would result in
an Adverse REMIC Event at any time that any Certificates are outstanding.

     (j) The Majority Class X Certificateholders, in their sole discretion,
shall have the right to purchase for their own account from the Trust Fund any
Distressed Mortgage Loan at a price equal to the Purchase Price; provided,
however, that any REO Property may be disposed of pursuant to the preceding
Section 3.11(i). The total price calculated pursuant to the preceding sentence
for any Distressed Mortgage Loan purchased hereunder shall be deposited in the
Collection Account and the Trustee, upon receipt of the Request for Release
from the Servicer in the form of Exhibit J hereto, shall release or cause to be
released to the purchaser of such Mortgage Loan the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment prepared
by the purchaser of such Mortgage Loan, in each case without recourse, as shall
be necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan shall succeed
to all the

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Trustee’s right, title and interest in and to such Mortgage Loan and
all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The purchaser of such Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Trustee, the Certificateholders or the NIMS
Insurer, if any, with respect thereto.

     (k) The Depositor shall have the option to purchase, at any one time (but
only one time during the period in which the Agreement is in effect), 1.0% (and
in any case, at least five Mortgage Loans) of the Mortgage Loans, by aggregate
principal balance of the Mortgage Loans as of such date, at a purchase price
equal to the greater of (A) the aggregate Purchase Price of such Mortgage Loans
and (B) the aggregate fair market value of such Mortgage Loans. The Mortgage
Loans that may be purchased by the Depositor pursuant to this paragraph will be
selected by the Depositor in its sole discretion. If at any time the Depositor
exercises such option, the Depositor shall immediately notify or cause to be
notified the Trustee by a certification in the form of Exhibit J (which certification shall include
a statement to the effect that all amounts required to be deposited in the
Collection Account pursuant to Section 3.5 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File.

     (l) Any reasonable out-of-pocket costs incurred by the Servicer in
connection with transferring the servicing of any Mortgage Loans pursuant to
paragraphs (j) and (k) shall be the responsibility of the party purchasing such
Mortgage Loans.

     Upon receipt of such certification and request, the Trustee or the
Custodian on its behalf shall promptly release the related Mortgage Files to
the Depositor or its designee. Any Adverse REMIC Event created hereunder
related to the exercise of the option provided by this paragraph (k) shall in
no event be payable by the Trustee but shall be paid by the Depositor.

     Section 3.12 Trustee to Cooperate; Release of Mortgage
Files.

     Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Custodian
by delivering, or causing to be delivered (or the Trustee may deliver), to the
Custodian two copies of a Request for Release substantially in the form of
Exhibit J, which shall be signed by a Servicing Officer, or a Responsible
Officer of the Trustee, as the case may be, or in mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer, or a Responsible Officer of the Trustee, as the case may be.
Upon receipt of such request, the Custodian shall promptly release the related
Mortgage File to the Servicer, and the Trustee shall at the Servicer’s
direction execute and deliver to the Servicer the request for reconveyance,
deed of reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage, in each case as provided by the Servicer,
together with the Mortgage Note with written evidence of cancellation thereon.
In lieu of the document execution process described in the preceding two
sentences, the Servicer shall be authorized to execute each request for
reconveyance, deed of reconveyance, and release, satisfaction of mortgage, or
such instrument releasing the lien of the Mortgage as attorney in fact for the
Trustee pursuant to the powers of attorney described in Section 3.1. Expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance

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shall be chargeable to the related Mortgagor. From time to time
and as shall be appropriate for the servicing or foreclosure of any Mortgage
Loan, including for such purpose, collection under any policy of flood
insurance, any fidelity bond or errors or omissions policy, or for the purposes
of effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Trustee shall,
upon delivery to the Custodian of two copies of a Request for Release in the
form of Exhibit J, which shall be signed by a Servicing Officer, or a
Responsible Officer of the Trustee, as the case may be, or in mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from a Servicing Officer, or a Responsible Officer of the Trustee, as
the case may be, release the Mortgage File to the Servicer. Subject to the
further limitations set forth below, the Servicer shall cause the Mortgage File
or documents so released to be returned to the Custodian when the need therefor
by the Servicer no longer exists, unless the Mortgage Loan is liquidated and
the proceeds thereof are deposited in the Collection Account, in which case the Servicer shall deliver to the
Trustee a Request for Release in the form of Exhibit J, signed by a Servicing
Officer.

     Section 3.13 Documents, Records and Funds in Possession of Servicer to
be Held for the Trustee.

     Notwithstanding any other provisions of this Agreement, the Servicer shall
transmit to the Trustee, or the Custodian on its behalf, all documents and
instruments described in Section 2.1(b), and shall hold as Servicer and agent
of the Trustee all other documents, in respect of a Mortgage Loan coming into
the possession of the Servicer from time to time and shall account fully to the
Trustee for any funds received by the Servicer or which otherwise are collected
by the Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan. All Mortgage Files and funds collected or held by, or under the
control of, the Servicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the Collection Account,
shall be held by the Servicer for and on behalf of the Trustee and shall be and
remain the sole and exclusive property of the Trustee, subject to the
applicable provisions of this Agreement. The Servicer also agrees that it
shall not create, incur or subject any Mortgage File or any funds that are
deposited in the Collection Account, Distribution Account or any Escrow
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim, lien, security
interest, judgment, levy, writ of attachment or other encumbrance, or assert by
legal action or otherwise any claim or right of setoff against any Mortgage
File or any funds collected on, or in connection with, a Mortgage Loan, except,
however, that the Servicer shall be entitled to set off against and deduct from
any such funds any amounts that are properly due and payable to the Servicer
under this Agreement.

     Section 3.14 Servicing Compensation.

     As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Collection Account an amount equal to
the Servicing Fee for each Mortgage Loan, provided that the aggregate Servicing
Fee with respect to any Distribution Date shall be reduced (but not below zero)
by the amount of any Compensating Interest paid by the Servicer with respect to
such Distribution Date.

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     Additional servicing compensation in the form of (i) all income and gain
net of any losses realized from Eligible Investments and (ii) assumption fees,
late payment charges, all ancillary income and other receipts not required to
be deposited to the Collection Account pursuant to Section 3.5 hereof,
excluding any Excess Proceeds and Prepayment Penalties, shall be retained by
the Servicer as additional servicing compensation. The Servicer and Trustee
shall be required to pay all expenses incurred by them respectively in
connection with their respective activities hereunder to the extent such
expenses do not constitute Advances or Nonrecoverable Advances as defined in
this Agreement and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement.

     Section 3.15 Access to Certain Documentation.

     The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Subordinate Certificates and the
examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Mortgage Loans required
by applicable regulations of the OTS and the FDIC. Such access shall be
afforded without charge, but only upon reasonable and prior written request
submitted on at least 5 Business Days’ notice (or such shorter interval as is
necessary to comply with applicable law or regulation) and during normal
business hours at the offices designated by the Servicer. Nothing in this
Section shall limit the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Mortgagors and the
failure of the Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section.

     Section 3.16 Annual Statement as to Compliance.

     The Servicer shall deliver to the Depositor and the Trustee on or before
March 15 of each applicable year, commencing in 2005, an Officer’s Certificate
stating, as to the signer thereof, that (i) a review of the activities of the
Servicer during the preceding fiscal year and of the performance of the
Servicer under this Agreement has been made under such officer’s supervision
and (ii) to the best of such officer’s knowledge, based on such review, the
Servicer has fulfilled all of its material obligations under this Agreement
throughout such year, or, if there has been a material default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Upon request, the Trustee shall
forward a copy of each such statement to each Rating Agency and each
Underwriter.

     Section 3.17 Annual Independent Public Accountants’ Servicing
Statement; Financial Statements.

     On or before March 15 of each applicable year, commencing in 2005, the
Servicer at its expense shall cause a nationally or regionally recognized firm
of Independent public accountants (who may also render other services to the
Servicer, the Depositor or any affiliate thereof) which is a member of the
American Institute of Certified Public Accountants to furnish a statement to
the Trustee and the Depositor to the effect that such firm has examined certain
documents and records relating to the servicing of mortgage loans under pooling
and servicing agreements substantially similar in material respects to this
Agreement and substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or alternatively, if the Trustee has

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so elected,
the Audit Program for Mortgages serviced for FNMA and FHLMC, and setting forth
such firm’s conclusions relating thereto in accordance with the applicable
attestation program or audit program. In rendering such statement, such firm
may rely, as to matters relating to direct servicing of mortgage loans by
subservicers, upon comparable statements for examinations conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Program for Mortgages serviced for FNMA and FHLMC
(rendered within one year of such statement) of Independent public accountants
with respect to the related subservicer. Copies of such statement shall be
provided by the Trustee to the NIMS Insurer, if any, and to any
Certificateholder upon request at the Servicer’s expense, provided such statement is delivered by the Servicer to the Trustee. Delivery of
such statement to the Trustee is for informational purposes only and the
Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein, including the Servicer’s compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officer’s Certificates).

     Section 3.18 Errors and Omissions Insurance; Fidelity
Bonds.

     The Servicer shall for so long as it acts as Servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Servicer
hereunder and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall be acceptable to FNMA or
FHLMC. In the event that any such policy or bond ceases to be in effect, the
Servicer shall obtain a comparable replacement policy or bond from an insurer
or issuer, meeting the requirements set forth above as of the date of such
replacement.

     Section 3.19 Advances.

     The Servicer shall determine on or before each Determination Date whether
it is required to make an Advance pursuant to the definition thereof. With
respect to any Mortgage Loan, if an Advance is required to be made hereunder,
the Servicer shall on or before the Servicer Remittance Date deposit into the
Distribution Account an amount equal to such Advance. The Servicer shall be
entitled to be reimbursed for all Advances of its own funds made pursuant to
this Section as provided in Section 3.8 hereof.

     The obligation to make Advances with respect to any Mortgage Loan shall
continue if such Mortgage Loan has been foreclosed or otherwise terminated and
the related Mortgaged Property has not been liquidated, provided that in no
event shall the Servicer be required to make any proposed Advance that, if
made, would in the good faith judgment of the Servicer be a Nonrecoverable
Advance. The Servicer shall deliver to the Trustee and the NIMS Insurer, if
any, on the related Servicer Remittance Date an Officer’s Certificate of a
Servicing Officer indicating the amount of any proposed Advance that, if made,
would in the good faith judgment of the Servicer be a Nonrecoverable Advance.

     Section 3.20 Advance Facility.

     (a) The Servicer is hereby authorized to enter into any facility with any
Person (any such Person, an “Advance Facility Counterparty”) under which the
Servicer may pledge or

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sell its rights to receive reimbursement of Advances or
Servicing Advances pursuant to this Agreement (“Advance Reimbursement Rights”)
pursuant to credit facilities, repurchase facilities, or similar facilities
providing liquidity for the funding of Advances or Servicing Advances,
including facilities providing that such Advance Facility Counterparty may make
all or a portion of the Advances or Servicing Advances (any such facility, an
“Advance Facility”), although no Advance Facility shall reduce or otherwise
affect the Servicer’s obligations to fund such Advances or Servicing Advances.
If so required pursuant to the terms of an Advance Facility, to the extent that
an Advance Facility Counterparty makes all or a portion of any Advance and the
Advance Facility Counterparty and the Servicer provide the Trustee and the NIMS
Insurer, if any, with notice acknowledged by the Servicer that such Advance Facility
Counterparty is entitled to reimbursement, such Advance Facility Counterparty
shall be entitled to receive reimbursement pursuant to this Agreement for such
amount to the extent provided. Such notice from the Advance Facility
Counterparty, if so required, and the Servicer must specify the amount of the
reimbursement and must specify which Section of this Agreement permits the
Advance to be reimbursed. The Trustee and the NIMS Insurer, if any, shall be
entitled to rely without independent investigation on the Advance Facility
Counterparty’s statement with respect to the amount of any reimbursement
pursuant to this Section 3.20 and with respect to the Advance Facility
Counterparty’s statement with respect to the Section of this Agreement permits
the Advance to be reimbursed. An Advance Facility Counterparty whose
obligations are limited to the making of Advances or Servicing Advances will
not be deemed to be a subservicer under this Agreement.

     (b) If so required pursuant to the terms of an Advance Facility, the
Servicer is hereby authorized to and shall pay to the Advance Facility
Counterparty, or cause the payment to the Advance Facility Counterparty of, (i)
reimbursements for Advances or Servicing Advances; and (ii) all or such portion
of the Servicing Fee as may be so specified in the Advance Facility, that would
otherwise be payable to the Servicer pursuant to this Agreement.

     (c) Upon request of the Servicer and provision by the Servicer of all
necessary forms, the Trustee agrees to execute such reasonable acknowledgments,
certificates, and other reasonable documents recognizing the interests of any
Advance Facility Counterparty in such Advance Reimbursement Rights and
Servicing Fees as the Servicer may cause to be made subject to Advance
Facilities pursuant to this Section 3.20, and such other documents in
connection with such Advance Facilities as may be reasonably requested from
time to time by any Advance Facility Counterparty. The implementation of the
arrangement described in this Section shall not require the consent of
Certificateholders, the NIMS Insurer, if any, or the Trustee.

     (d) The Servicer shall indemnify the Trustee, the Trust Fund, each
Certificateholder and any NIMS Insurer for any and all claims, losses,
liabilities, damages, costs and expenses resulting from any claim by the
Advance Facility Counterparty, except (with respect to the Trustee and any
successor servicer) to the extent that such claim, loss, liability, damages or
expense results from or arises out of the negligence, recklessness or willful
misconduct of the Trustee or successor servicer, or failure by the Trustee or
successor servicer to remit funds as required by this Agreement, or the
commission of any act or an omission to act by the Trustee or successor
servicer and the expiration of any applicable cure or grace period such

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that an
Event of Default under this Agreement occurs or such entity is subject to
termination for cause under this Agreement.

     (e) Any amendment to this Section 3.20 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section, including amendments
to add provisions relating to a successor servicer, may be entered into by the
Seller, the Depositor, the Servicer, the Credit Risk Manager and the Trustee
without the consent of any Certificateholder, provided that such amendment is
otherwise effected in compliance with the provisions of Section 11.01. All reasonable costs and expenses (including attorneys’ fees) incurred by each
party hereto or incurred by (or that would otherwise be incurred by) the Trust
Fund shall be borne solely by the Servicer. The parties hereto acknowledge and
agree that (i) any Advances and/or Servicing Advances financed by and/or
pledged to an Advance Facility Counterparty under any Advance Facility are
obligations owed to the Servicer payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances and/or Servicing
Advances to the extent provided herein, and the Trustee is not, as a result of
the existence of any Advance Facility, obligated or liable to repay any
Advances or Servicing Advances financed by the Advance Facility Counterparty;
(ii) the Servicer will be responsible for remitting to the Advance Facility
Counterparty the applicable amounts collected by it as reimbursement for
Advances and/or Servicing Advances funded by the Advance Facility Counterparty,
subject to the provisions of this Agreement; and (iii) the Trustee shall not
have any responsibility to track or monitor the administration of the financing
arrangement between the Servicer and any Advance Facility Counterparty.

     Section 3.21 Prepayment Penalties.

     The Servicer or any designee of the Servicer shall not waive any
Prepayment Penalty with respect to any Mortgage Loan that contains a Prepayment
Penalty that prepays during the term of the penalty. If the Servicer or its
designee fails to collect the Prepayment Penalty upon any prepayment of any
Mortgage Loan that contains a Prepayment Penalty, the Servicer shall deposit
into the Collection Account from the Servicer’s own funds an amount equal to
the Prepayment Penalty that was not collected. Notwithstanding the above, the
Servicer or its designee may waive a Prepayment Penalty without depositing the
amount thereof into the Collection Account the amount of the Prepayment Penalty
if (i) the Mortgage Loan is sixty-one (61) days or more delinquent and such
waiver would maximize recovery of total proceeds taking into account the value
of such Prepayment Penalty and the related Mortgage Loan or (ii) the prepayment
is not a result of a refinance by the Servicer or any of its Affiliates and (a)
the Mortgage Loan is foreseen to be in default and such waiver would maximize
recovery of total proceeds taking into account the value of such Prepayment
Penalty and the related Mortgage Loan, (b) the collection of the Prepayment
Penalty would be in violation of applicable laws or (c) the collection of such
Prepayment Charge would be considered “predatory” pursuant to written guidance
published or issued by any applicable federal, state or local regulatory
authority acting in its official capacity and having jurisdiction over such
matters. The Servicer shall be obligated to collect Prepayment Penalties under
the terms of the related Mortgage Loan without regard to the amount of
Prepayment Penalty set forth for such loan in the Mortgage Loan Schedule.

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     Section 3.22 Actions with Respect to Distressed Mortgage Loans.

     The Servicer will exercise its discretion, consistent with the Servicing
Standard and the terms of this Agreement, with respect to the enforcement and
servicing of Distressed Mortgage Loans in such manner as will maximize the
receipt of principal and interest with respect thereto, including but not
limited to the sale of such Mortgage Loan to a third party, the modification of
such Mortgage Loan, or foreclosure upon the related Mortgaged Property and
disposition thereof. The Majority Class X Certificateholders shall have the
option to purchase any such loans from the Trust Fund at the Purchase Price.

     The Seller may appoint, with the written consent of the Depositor, the
Trustee and the NIMS Insurer, if any, a Special Servicer to special service any
Distressed Mortgage Loans. Any applicable termination fee related to the
termination of the Servicer and the appointment of any Special Servicer shall
be paid by the Seller. Any fees paid to any such Special Servicer shall not
exceed the Servicing Fee Rate. The Special Servicer shall have the same
discretion as is granted to the Servicer above with respect to Distressed
Mortgage Loans. The Servicer shall be entitled to be reimbursed pursuant to
Section 3.8(a) for any unreimbursed Advances, Servicing Advances or accrued and
unpaid Servicing Fees relating to any such Distressed Mortgage Loan that is
transferred to a Special Servicer pursuant to this Section.

     Section 3.23 Duties of the Credit Risk Manager. 

     The Certificateholders, by their purchase and acceptance of the
Certificates, appoint The Murrayhill Company as Credit Risk Manager. For and
on behalf of the Depositor, the Credit Risk Manager will provide reports and
recommendations concerning certain delinquent and defaulted Mortgage Loans, and
as to the collection of Prepayment Penalties with respect to the Mortgage
Loans. Such reports and recommendations will be based upon information
provided pursuant to the Credit Risk Management Agreement. The Credit Risk
Manager shall look solely to the Servicer for all information and data
(including loss and delinquency information and data) and loan level
information and data relating to the servicing of the Mortgage Loans and the
Trustee shall have no obligation to provide any such information to the Credit
Risk Manager.

     Section 3.24 Limitation Upon Liability of the Credit Risk
Manager. 

     Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability to
the Trustee, the Certificateholders, the NIMS Insurer, if any, or the Depositor
for any action taken or for refraining from the taking of any action in good
faith pursuant to this Agreement, in reliance upon information provided by the
Servicer under the Credit Risk Management Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Credit Risk
Manager or any such Person against liability that would otherwise be imposed by
reason of willful malfeasance, bad faith or gross negligence in its performance
of its duties or by reason of reckless disregard for its obligations and duties
under this Agreement or the Credit Risk Management Agreement. The Credit Risk
Manager and any director, officer, employee or agent of the Credit Risk Manager
may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder,
and may rely in good faith upon the accuracy of

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information furnished by the
Servicer pursuant to the Credit Risk Management Agreement in the performance of
its duties thereunder and hereunder.

     Section 3.25 Removal of Credit Risk Manager.

     The Credit Risk Manager may be removed as Credit Risk Manager by the
Depositor, in the exercise of its sole discretion, at any time, without cause,
upon 90 days prior written notice. The Depositor shall provide such written
notice to the Trustee and upon receipt of such notice, the Trustee shall provide written notice to the Credit Risk Manager of its
removal, effective upon receipt of such notice.

ARTICLE IV

DISTRIBUTIONS

     Section 4.1 Distributions.

     (a) On each Distribution Date the Trustee (or the Paying Agent on behalf
of the Trustee) shall withdraw from the Distribution Account, to the extent of
funds on deposit therein, all amounts that are available for distribution to
Certificateholders and amounts that are available for payment to the Swap
Counterparty, and shall allocate such amount to the interests issued in respect
of each REMIC created hereby, and shall distribute such amount as specified in
this Section.

     (b) On each Distribution Date, the Trustee shall first deposit the amount
(to the extent such amount shall not be greater than the aggregate amount
calculated pursuant to clause (a) of the definition of “Interest Remittance
Amount,” as reduced by the amount calculated pursuant to clause (b)(i) thereof)
of any Net Swap Payment or Swap Termination Payment owed to the Swap
Counterparty (to the extent not paid on previous Distribution Dates) into the
Supplemental Interest Trust and second distribute the Interest Remittance
Amount for such date in the following order of priority:

     (i) concurrently, to the Senior Certificates, Current Interest for
each such Class and such Distribution Date and any Carryforward Interest
for each such Class and such Distribution Date; provided, however, that
any shortfall in Current Interest shall be allocated among the Senior
Certificates in proportion to the amount of Current Interest that would
otherwise be distributable thereon;

     (ii) to the Class M1 Certificates, Current Interest and any
Carryforward Interest for such Class and such Distribution Date;

     (iii) to the Class M2 Certificates, Current Interest and any
Carryforward Interest for such Class and such Distribution Date;

     (iv) to the Class M3 Certificates, Current Interest and any
Carryforward Interest for such Class and such Distribution Date;

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     (v) to the Class B1 Certificates, Current Interest and any
Carryforward Interest for such Class and such Distribution Date;

     (vi) to the Class B2 Certificates, Current Interest and any
Carryforward Interest for such Class and such Distribution Date;

     (vii) to the Class B3 Certificates, Current Interest and any
Carryforward Interest for such Class and such Distribution Date;

     (viii) to the Credit Risk Manager, the Credit Risk Manager’s Fee for
such Distribution Date;

     (ix) to the Trustee, any amounts reimbursable pursuant to this
Agreement and not previously reimbursed to the Trustee due to application
of the limitations on amounts reimbursable in any Anniversary Year; and

     (x) for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in subsection (d) of this Section, any
Interest Remittance Amount remaining after application pursuant to
clauses (i) through (ix) above.

     (c) On each Distribution Date, the Trustee shall first deposit the amount
(to the extent such amount shall not be greater than the aggregate amount
calculated pursuant to clause (a) of the definition of “Principal Remittance
Amount,” as reduced by the amount calculated pursuant to clause (b)(i) thereof)
of any Swap Termination Payment owed to the Swap Counterparty (to the extent
not paid on previous Distribution Dates pursuant to Section 4.1(b)) into the
Supplemental Interest Trust and second distribute the Principal Distribution
Amount for such date as follows:

     (i) On each Distribution Date (a) prior to the Stepdown Date or (b)
with respect to which a Trigger Event is in effect, the Trustee shall
distribute the Principal Distribution Amount in the following order of
priority:

     (A) until the aggregate Class Principal Amount of the LIBOR
Certificates equals the Target Amount for such Distribution Date,
concurrently, to the Class A1 Certificates and to the Class A2-A
and Class A2-B Certificates as a group (for application as provided
below), in proportion to the Class Principal Amount of the Class A1
Certificates and the aggregate Class Principal Amount of the Class
A2-A and Class A2-B Certificates, in reduction of their respective
Class Principal Amounts, until the Class Principal Amount of each
such Class has been reduced to zero; provided, that such amount
distributable to the Class A2-A and Class A2-B Certificates shall
be distributed in the following order of priority:

     (1) to the Class A2-A Certificates, until their Class
Principal Amount has been reduced to zero; and

     (2) to the Class A2-B Certificates, until their Class
Principal Amount has been reduced to zero;

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     (B) until the aggregate Class Principal Amount of the LIBOR
Certificates equals the Target Amount for such Distribution Date,
to the Class M1 Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero;

     (C) until the aggregate Class Principal Amount of the LIBOR
Certificates equals the Target Amount for such Distribution Date,
to the Class M2 Certificates, in reduction of their Class Principal Amount,
until the Class Principal Amount of such Class has been reduced to
zero;

     (D) until the aggregate Class Principal Amount of the LIBOR
Certificates equals the Target Amount for such Distribution Date,
to the Class M3 Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero;

     (E) until the aggregate Class Principal Amount of the LIBOR
Certificates equals the Target Amount for such Distribution Date,
to the Class B1 Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero;

     (F) until the aggregate Class Principal Amount of the LIBOR
Certificates equals the Target Amount for such Distribution Date,
to the Class B2 Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero;

     (G) until the aggregate Class Principal Amount of the LIBOR
Certificates equals the Target Amount for such Distribution Date,
to the Class B3 Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero; and

     (H) for application as part of Monthly Excess Cashflow for
such Distribution Date, as provided in subsection (d) of this
Section, any Principal Distribution Amount remaining after
application pursuant to clauses (A) through (G) above.

     (ii) On each Distribution Date (a) on or after the Stepdown Date and
(b) with respect to which a Trigger Event is not in effect, the Trustee
shall distribute the Principal Distribution Amount for such date in the
following order of priority:

     (A) (1) so long as any of the Class M1, Class M2, Class M3,
Class B1, Class B2 or Class B3 Certificates are outstanding, to the
Class A1, Class A2-A and Class A2-B Certificates for application as
provided below, in reduction of their respective Class Principal
Amounts, an amount equal to the lesser of (x) the Principal
Distribution Amount for such Distribution Date and (y) the Senior
Principal Distribution Amount for such Distribution Date, until the
Class Principal Amount of each such Class has been reduced to zero;
and (2) otherwise to the Class A1, Class A2-A and Class A2-B
Certificates for application as

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provided below, in reduction of
their respective Class Principal Amounts, the Principal
Distribution Amount for such Distribution Date, until the Class
Principal Amount of each such Class is reduced to zero; provided,
that such amounts shall be allocated as follows:

     concurrently, to the Class A1 Certificates and to the
Class A2-A and Class A2-B Certificates as a group (for
application as provided
below), in proportion to the Class Principal Amount of
the Class A1 Certificates and the aggregate Class Principal
Amount of the Class A2-A and Class A2-B Certificates, in
reduction of their respective Class Principal Amounts, until
the Class Principal Amount of each such Class has been
reduced to zero; provided, that such amount distributable to
the Class A2-A and Class A2-B Certificates shall be
distributed in the following order of priority:

     first, to the Class A2-A Certificates, until their
Class Principal Amount has been reduced to zero; and

     second, to the Class A2-B Certificates, until
their Class Principal Amount has been reduced to zero;

     (B) to the Class M1 Certificates, in reduction of their Class
Principal Amount, an amount equal to the lesser of (x) the excess
of (a) the Principal Distribution Amount for such Distribution Date
over (b) the amount distributed to the Class A1, Class A2-A and
Class A2-B Certificates on such date pursuant to clause (A) above,
and (y) the M1 Principal Distribution Amount for such date, until
the Class Principal Amount of such Class has been reduced to zero;

     (C) to the Class M2 Certificates, in reduction of their Class
Principal Amount, an amount equal to the lesser of (x) the excess
of (a) the Principal Distribution Amount for such Distribution Date
over (b) the amount distributed to the Class A1, Class A2-A, Class
A2-B and Class M1 Certificates on such date pursuant to clauses (A)
and (B) above, respectively, and (y) the M2 Principal Distribution
Amount for such date, until the Class Principal Amount of such
Class has been reduced to zero;

     (D) to the Class M3 Certificates, in reduction of their Class
Principal Amount, an amount equal to the lesser of (x) the excess
of (a) the Principal Distribution Amount for such Distribution Date
over (b) the amount distributed to the Class A1, Class A2-A, Class
A2-B, Class M1 and Class M2 Certificates on such date pursuant to
clauses (A), (B) and (C) above, respectively, and (y) the M3
Principal Distribution Amount for such date, until the Class
Principal Amount of such Class has been reduced to zero;

     (E) to the Class B1 Certificates, in reduction of their Class
Principal Amount, an amount equal to the lesser of (x) the excess
of (a) the Principal Distribution Amount for such Distribution Date
over (b) the amount distributed to

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the Class A1, Class A2-A, Class
A2-B, Class M1, Class M2 and Class M3 Certificates on such date
pursuant to clauses (A) through (D) above, respectively, and (y)
the B1 Principal Distribution Amount for such date, until the Class
Principal Amount of such Class has been reduced to zero;

     (F) to the Class B2 Certificates, in reduction of their Class
Principal Amount, an amount equal to the lesser of (x) the excess
of (a) the Principal Distribution Amount for such Distribution Date over (b) the
amount distributed to the Class A1, Class A2-A, Class A2-B, Class
M1, Class M2, Class M3 and Class B1 Certificates on such date
pursuant to clauses (A) through (E) above, respectively, and (y)
the B2 Principal Distribution Amount for such date, until the Class
Principal Amount of such Class has been reduced to zero;

     (G) to the Class B3 Certificates, in reduction of their Class
Principal Amount, an amount equal to the lesser of (x) the excess
of (a) the Principal Distribution Amount for such Distribution Date
over (b) the amount distributed to the Class A1, Class A2-A, Class
A2-B, Class M1, Class M2, Class M3, Class B1 and Class B2
Certificates on such date pursuant to clauses (A) through (F)
above, respectively, and (y) the B3 Principal Distribution Amount
for such date, until the Class Principal Amount of such Class has
been reduced to zero; and

     (H) for application as part of Monthly Excess Cashflow for
such Distribution Date, as provided in subsection (d) of this
Section, any Principal Distribution Amount remaining after
application pursuant to clauses (A) through (G) above,
respectively.

     Notwithstanding the foregoing, on any Distribution Date on which the Class
Principal Amount of each Class of Certificates having a higher priority of
distribution has been reduced to zero, any remaining Principal Distribution
Amount shall be distributed to the remaining Certificates in the order of
priority set forth above until the Class Principal Amount of each such Class
has been reduced to zero.

     (d) On each Distribution Date, the Trustee shall distribute the Monthly
Excess Cashflow, and for purposes of distributions pursuant to Section
4.1(d)(iii), any amounts distributable from the Basis Risk Reserve Fund, for
such date in the following order of priority:

     (i) for each Distribution Date occurring (a) before the Stepdown
Date or (b) on or after the Stepdown Date but for which a Trigger Event
is in effect, then until the aggregate Certificate Principal Amount of
the LIBOR Certificates equals the positive difference between (x) Pool
Balance for such Distribution Date and (y) the Targeted
Overcollateralization Amount for such Distribution Date, in the following
order of priority,

     (A) concurrently, to the Class A1 Certificates and to the
Class A2-A and Class A2-B Certificates as a group (for application
as provided below), in proportion to the Class Principal Amount of
the Class A1 Certificates and the aggregate Class Principal Amount
of the Class A2-A and Class A2-B Certificates,

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in reduction of
their respective Class Principal Amounts, until the Class Principal
Amount of each such Class has been reduced to zero; provided that
such amount distributable to the Class A2-A and Class A2-B
Certificates shall be distributed in the following order of
priority:

     (1) to the Class A2-A Certificates, until their Class
Principal Amount has been reduced to zero; and

     (2) to the Class A2-B Certificates, until their Class
Principal Amount has been reduced to zero;

     (B) to the Class M1 Certificates, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;

     (C) to the Class M2 Certificates, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;

     (D) to the Class M3 Certificates, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;

     (E) to the Class B1 Certificates, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;

     (F) to the Class B2 Certificates, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero; and

     (G) to the Class B3 Certificates, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;

     (ii) for each Distribution Date occurring on or after the Stepdown
Date and for which a Trigger Event is not in effect, in the following
order of priority,

     (A) concurrently, to the Class A1 Certificates and to the
Class A2-A and Class A2-B Certificates as a group (for application
as provided below), in proportion to the Class Principal Amount of
the Class A1 Certificates and the aggregate Class Principal Amount
of the Class A2-A and Class A2-B Certificates, in reduction of
their respective Class Principal Amounts, until the aggregate Class
Principal Amount of the Class A1, Class A2-A and Class A2-B
Certificates, after giving effect to distributions on such
Distribution Date, equals the Senior Target Amount for such date;
provided that such amount distributable to the Class A2-A and Class
A2-B Certificates shall be distributed in the following order of
priority:

     (1) to the Class A2-A Certificates, until their Class
Principal Amount has been reduced to zero; and

     (2) to the Class A2-B Certificates, until their Class
Principal Amount has been reduced to zero;

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     (B) to the Class M1 Certificates, in reduction of their Class
Principal Amount, until the aggregate Class Principal Amount of the
Class A1, Class A2-A, Class A2-B and Class M1 Certificates, after
giving effect to distributions on such Distribution Date, equals
the M1 Target Amount;

     (C) to the Class M2 Certificates, in reduction of their Class
Principal Amount, until the aggregate Class Principal Amount of the
Class A1, Class A2-A, Class A2-B, Class M1 and Class M2
Certificates, after giving effect to distributions on such
Distribution Date, equals the M2 Target Amount;

     (D) to the Class M3 Certificates, in reduction of their Class
Principal Amount, until the aggregate Class Principal Amount of the
Class A1, Class A2-A, Class A2-B, Class M1, Class M2 and Class M3
Certificates, after giving effect to distributions on such
Distribution Date, equals the M3 Target Amount;

     (E) to the Class B1 Certificates, in reduction of their Class
Principal Amount, until the aggregate Class Principal Amount of the
Class A1, Class A2-A, Class A2-B, Class M1, Class M2, Class M3 and
Class B1 Certificates, after giving effect to distributions on such
Distribution Date, equals the B1 Target Amount;

     (F) to the Class B2 Certificates, in reduction of their Class
Principal Amount, until the aggregate Class Principal Amount of the
Class A1, Class A2-A, Class A2-B, Class M1, Class M2, Class M3,
Class B1 and Class B2 Certificates, after giving effect to
distributions on such Distribution Date, equals the B2 Target
Amount; and

     (G) to the Class B3 Certificates, in reduction of their Class
Principal Amount, until the aggregate Class Principal Amount of the
Class A1, Class A2-A, Class A2-B, Class M1, Class M2, Class M3,
Class B1, Class B2 and Class B3 Certificates, after giving effect
to distributions on such Distribution Date, equals the B3 Target
Amount;

     (iii) to the Basis Risk Reserve Fund, an amount equal to the Basis
Risk Payment for such Distribution Date, and then from the Basis Risk
Reserve Fund in the following order of priority,

     (A) concurrently, in proportion to their respective Unpaid
Basis Risk Shortfalls, after giving effect to distributions
pursuant to Section 4.1(d)(i) or 4.1(d)(ii) on such Distribution
Date, to the Senior Certificates, any applicable Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for each such Class and
such Distribution Date;

     (B) to the Class M1 Certificates, any applicable Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class and such
Distribution Date;

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     (C) to the Class M2 Certificates, any applicable Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class and such
Distribution Date;

     (D) to the Class M3 Certificates, any applicable Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class and such
Distribution Date;

     (E) to the Class B1 Certificates, any applicable Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class and such
Distribution Date;

     (F) to the Class B2 Certificates, any applicable Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class and such
Distribution Date;

     (G) to the Class B3 Certificates, any applicable Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class and such
Distribution Date; and

     (H) to the Supplemental Interest Trust, for application
pursuant to Section 4.1(e)(viii), any amounts remaining in the
Basis Risk Reserve Fund, after taking into account distributions
pursuant to clauses (A) through (G) above, in excess of the
Required Reserve Fund Amount for such Distribution Date;

     (iv) to the Class M1 Certificates, any Deferred Amount for such
Class and such Distribution Date;

     (v) to the Class M2 Certificates, any Deferred Amount for such Class
and such Distribution Date;

     (vi) to the Class M3 Certificates, any Deferred Amount for such
Class and such Distribution Date;

     (vii) to the Class B1 Certificates, any Deferred Amount for such
Class and such Distribution Date;

     (viii) to the Class B2 Certificates, any Deferred Amount for such
Class and such Distribution Date;

     (ix) to the Class B3 Certificates, any Deferred Amount for such
Class and such Distribution Date;

     (x) on the Distribution Date occurring in July 2009 (or the next
occurring Distribution Date on which sufficient funds are available in
the Distribution Account) to the Class P Certificates, $100 in payment of
its Class P Principal Amount;

     (xi) to the Supplemental Interest Trust, the Class X Distributable
Amount (less any Basis Risk Payment for such Distribution Date) for such
Distribution Date, for application pursuant to Section 4.1(e)(viii); and

     (xii) to the Class R Certificates, any amount remaining on such date
after application pursuant to clauses (i) through (xi) above.

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     (e) On each Distribution Date, the Trustee shall distribute the
Supplemental Interest Trust Amount for such date as follows:

     (i) to the Swap Counterparty, any Net Swap Payment owed to the Swap
Counterparty pursuant to the Swap Agreement for such Distribution Date;

     (ii) to the Swap Counterparty, any Swap Termination Payment owed to
the Swap Counterparty (to the extent not paid on previous Distribution
Dates) pursuant to the Swap Agreement;

     (iii) to the LIBOR Certificates, Current Interest and any
Carryforward Interest for each such Class and such Distribution Date; for
application pursuant to the priorities set forth in Sections 4.1(b)(i)
through (vii), to the extent unpaid pursuant to such Sections;

     (iv) to the LIBOR Certificates, any Basis Risk Shortfalls and Unpaid
Basis Risk Shortfalls for each such class for such Distribution Date, for
application pursuant to the priorities set forth in Sections
4.1(d)(iii)(A) through (G), to the extent unpaid pursuant to such
Sections;

     (v) to the LIBOR Certificates, any amount necessary to maintain the
applicable overcollateralization targets or balance targets specified in
Sections 4.1(d)(i) and (ii) for such Distribution Date, for application
pursuant to the priorities set forth in such Sections, after giving
effect to distributions pursuant to such Sections;

     (vi) to the Class M and Class B Certificates, any Deferred Amount
for each such class and such Distribution Date for application pursuant
to the priorities set forth in Sections 4.1(d)(iv) through (ix), to the
extent unpaid pursuant to such clauses;

     (vii) if applicable, for application to the purchase of a
replacement swap agreement;

     (viii) to the Class X Certificates, any amount deposited into the
Supplemental Interest Trust pursuant to Section 4.1(d)(iii)(H) or Section
4.1(d)(xi) and any remaining Supplemental Interest Trust Amount; and

     (ix) on the first Distribution Date on which the Class Principal
Amount of each Class of Certificates has been reduced to zero, to the
Class X Certificates all amounts remaining in the Supplemental Interest
Trust.

     (f) On each Distribution Date, an amount equal to the aggregate of all
Prepayment Penalties collected during the preceding Prepayment Period, in the
case of Principal Prepayments in full, or the preceding Collection Period, in
the case of Principal Prepayments in part, shall be distributed to the Class P
Certificates.

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     Section 4.2 Method of Distribution.

     (a) All distributions with respect to each Class of Certificates on each
Distribution Date shall be made pro rata among the outstanding Certificates of
such Class, based on the Percentage Interest in such Class represented by each
Certificate. Distributions to the Certificateholders on each Distribution Date
shall be made by the Trustee to the Certificateholders of record on the related
Record Date by check or money order mailed to a Certificateholder at the
address appearing in the Certificate Register, or upon written request by such Certificateholder to the Trustee made not later than the applicable
Record Date, by wire transfer to a U.S. depository institution acceptable to
the Trustee, or by such other means of payment as such Certificateholder and
the Trustee shall agree.

     (b) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing
such distribution to the Certificate Owners that it represents and to each
financial intermediary for which it acts as agent. Each such financial
intermediary shall be responsible for disbursing funds to the Certificate
Owners that it represents. All such credits and disbursements with respect to
a Book-Entry Certificate are to be made by the Depository and the Depository
Participants in accordance with the provisions of the applicable Certificates.
The Trustee shall not have any responsibility therefor except as otherwise
provided by applicable law.

     (c) The Trustee shall withhold or cause to be withheld such amounts as it
reasonably determines are required by the Code (giving full effect to any
exemptions from withholding and related certifications required to be furnished
by Certificateholders or Certificate Owners and any reductions to withholding
by virtue of any bilateral tax treaties and any applicable certification
required to be furnished by Certificateholders or Certificate Owners with
respect thereto) from distributions to be made to a “Foreign Person” as defined
in Section 1445(f)(3) of the Code.

     Section 4.3 Allocation of Losses.

     On each Distribution Date, the Trustee (after giving effect to all
distributions made on such Distribution Date) shall allocate any Applied Loss
Amount for such date to reduce the Certificate Principal Amounts of the
Subordinate Certificates in the following order of priority:

     (i) to the Class B3 Certificates, until the Class Principal Amount
thereof has been reduced to zero;

     (ii) to the Class B2 Certificates, until the Class Principal Amount
thereof has been reduced to zero;

     (iii) to the Class B1 Certificates, until the Class Principal Amount
thereof has been reduced to zero;

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     (iv) to the Class M3 Certificates, until the Class Certificate
Amount thereof has been reduced to zero;

     (v) to the Class M2 Certificates, until the Class Certificate Amount
thereof has been reduced to zero; and

     (vi) to the Class M1 Certificates, until the Class Certificate
Amount thereof has been reduced to zero.

     Section 4.4 Reports to the Depositor and the Trustee.

     On or before the Business Day preceding each Distribution Date, the
Servicer shall notify, or cause to be notified, the Depositor, the Trustee, the
Credit Risk Manager and the NIMS Insurer, if any, of the following information
with respect to such Distribution Date (which notification may be given by
facsimile, electronic transmission or by telephone promptly confirmed in
writing):

     (i) the aggregate amount deposited in the Distribution Account and
the source thereof (identified as interest, scheduled principal or
unscheduled principal); and

     (ii) the amount of any Realized Losses and any Applied Loss Amount.

     Section 4.5 Reports by or on Behalf of the Trustee.

     (a) On each Distribution Date, based solely on information received from
the Servicer, the Trustee shall prepare and make available a statement
containing the following information:

     (i) the aggregate amount of distributions made on such Distribution
Date to the Holders of each Class of Certificates other than any Class of
Notional Certificates, to the extent applicable, allocable to principal,
including Net Liquidation Proceeds and Insurance Proceeds, stating
separately the amount attributable to scheduled principal payments and
unscheduled payments in the nature of principal;

     (ii) the aggregate amount of distributions made on such Distribution
Date to the Holders of each Class of Certificates allocable to interest
and the calculation thereof;

     (iii) the aggregate amount of distributions made on such
Distribution Date to the Holders of each Class of Certificates in respect
of Deferred Amounts;

     (iv) the amount, if any, of any distributions to the Holders of the
Class X and the Class R Certificates;

     (v) the amount of Advances and, to the extent reported by the
Servicer, Servicing Advances made by the Servicer for the related
Collection Period, the amount of unrecovered Advances and, to the extent
reported by the Servicer, Servicing Advances outstanding (after giving
effect to Advances and Servicing Advances made on such

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Distribution Date)
and the aggregate amount of Nonrecoverable Advances for such Distribution
Date;

     (vi) the Aggregate Loan Balance as of the close of business on the
last day of the related Prepayment Period (after giving effect to the
principal portion of Scheduled Payments due during the related Collection
Period, to the extent received or advanced, and unscheduled collections
of principal received during the related Prepayment Period or Collection
Period, as applicable);

     (vii) the Class Principal Amount (or Class Notional Amount) of each
Class of Certificates, to the extent applicable, as of such Distribution
Date after giving effect to payments allocated to principal reported
under clause (i) above, separately identifying any reduction of any of
the foregoing Certificate Principal Amounts due to Applied Loss Amounts;

     (viii) the amount of all Prepayment Penalties distributed to the
Class P Certificates;

     (ix) the amount of any Realized Losses and Subsequent Recoveries
incurred or received with respect to the Mortgage Loans (x) in the
applicable Prepayment Period and (y) in the aggregate since the Cut-off
Date;

     (x) the amount of the Servicing Fee, Credit Risk Manager’s Fees,
Trustee Fee and any PMI Insurance Premiums paid with respect to such
Distribution Date (or the related Collection Period);

     (xi) the number and aggregate Scheduled Principal Balance of
Mortgage Loans, as reported to the Trustee by the Servicer, (a) remaining
outstanding (b) Delinquent 30 to 59 days on a contractual basis, (c)
Delinquent 60 to 89 days on a contractual basis, (d) Delinquent 90 or
more days on a contractual basis, (e) as to which foreclosure proceedings
have been commenced as of the close of business on the last Business Day
of the calendar month immediately preceding the month in which such
Distribution Date occurs, (f) in bankruptcy and (g) that are REO
Properties;

     (xii) the aggregate Scheduled Principal Balance of any Mortgage
Loans with respect to which the related Mortgaged Property became a REO
Property as of the close of business on the last Business Day of the
calendar month immediately preceding the month in which such Distribution
Date occurs;

     (xiii) with respect to substitution of Mortgage Loans in the
preceding calendar month, the Scheduled Principal Balance of each Deleted
Mortgage Loan, and of each Qualified Substitute Mortgage Loan;

     (xiv) the aggregate outstanding Carryforward Interest, Net
Prepayment Interest Shortfalls, Net Prepayment Interest Excess, Basis
Risk Shortfalls and Unpaid Basis Risk Shortfalls, if any, for each Class
of Certificates, after giving effect to distributions on such
Distribution Date;

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     (xv) the level of LIBOR and the Certificate Interest Rate applicable
to each Class of Certificates for such Distribution Date (and the related
Accrual Period);

     (xvi) the Interest Remittance Amount and the Principal Remittance
Amount for such Distribution Date;

     (xvii) if applicable, the amount of any shortfall (i.e., the
difference between the aggregate amounts of principal and interest which
Certificateholders would have received if there were sufficient available amounts in the Distribution
Account and the amounts actually distributed);

     (xviii) the amount of any Overcollateralization Deficiency Amount
after giving effect to the distributions made on such Distribution Date;
and

     (xix) the amount of any Net Swap Payment to the Supplemental
Interest Trust made pursuant to Section 4.1(b), any Net Swap Payment to
the Swap Counterparty made pursuant to Section 4.1(e)(i), any Swap
Termination Payment to the Supplemental Interest Trust made pursuant to
Sections 4.1(b) and (c) and any Swap Termination Payment to the Swap
Counterparty made pursuant to Section 4.1(e)(ii).

     In the case of information furnished pursuant to subclauses (i) and (ii)
above, the amounts shall (except in the case of the report delivered to the
Holders of the Class X Certificates) be expressed as a dollar amount per $1,000
of original principal amount of Certificates.

     The Trustee will make such report and additional loan level information
(and, at its option, any additional files containing the same information in an
alternative format) available each month to the NIMS Insurer, if any,
Certificateholders and the Rating Agencies via the Trustee’s internet website.
The Trustee’s internet website shall initially be located at “www.ctslink.com.”
Assistance in using the website can be obtained by calling the Trustee’s
customer service desk at 1-301-815-6600. Parties that are unable to use the
website are entitled to have a paper copy mailed to them via first class mail
by calling the customer service desk and indicating such. The Trustee shall
have the right to change the way such statements are distributed in order to
make such distribution more convenient and/or more accessible to the above
parties and the Trustee shall provide timely and adequate notification to all
above parties regarding any such changes.

     The foregoing information and reports shall be prepared and determined by
the Trustee based solely on Mortgage Loan data provided to the Trustee by the
Servicer (in a format agreed to by the Trustee and the Servicer) no later than
12:00 p.m. (noon) New York City time one (1) Business Day following the
Determination Date. In preparing or furnishing the foregoing information, the
Trustee shall be entitled to rely conclusively on the accuracy of the
information or data regarding the Mortgage Loans and the related REO Property
that has been provided to the Servicer by the Servicer, and the Trustee shall
not be obligated to verify, recompute, reconcile or recalculate any such
information or data. The Trustee shall be entitled to conclusively rely on the
Mortgage Loan data provided by the Servicer and shall have no liability for any
errors in such Mortgage Loan data.

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     Section 4.6 Basis Risk Reserve Fund.

     (a) On the Closing Date, the Trustee shall establish and maintain in its
name, in trust for the benefit of the holders of the LIBOR Certificates, the
Basis Risk Reserve Fund, into which the Depositor shall deposit $1,000. The
Basis Risk Reserve Fund shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled
with, any other moneys, including, without limitation, other moneys of the
Trustee held pursuant to this Agreement.

     (b) The Trustee shall make withdrawals from the Basis Risk Reserve Fund to
make distributions pursuant to Section 4.1(d) hereof.

     (c) Funds in the Basis Risk Reserve Fund shall be invested in Eligible
Investments. Any earnings on such amounts shall be distributed on each
Distribution Date to the Class X Certificateholders. The Class X Certificates
shall evidence ownership of the Basis Risk Reserve Fund for federal income tax
purposes and the Holder thereof shall direct the Trustee, in writing, as to
investment of amounts on deposit therein. The Class X Certificateholders shall
be liable for any losses incurred on such investments. In the absence of
written instructions from the Class X Certificateholder as to investment of
funds on deposit in the Basis Risk Reserve Fund, such funds shall be invested
in the Wells Fargo Prime Investment Money Market Fund or comparable investment
vehicle. Any amounts on deposit in the Basis Risk Reserve Fund in excess of
the Required Reserve Fund Amount on any Distribution Date shall be distributed
to the Class X Certificateholders on the following Distribution Date. For all
Federal income tax purposes, amounts transferred by the Upper Tier REMIC to the
Basis Risk Reserve Fund shall be treated as amounts distributed by the Upper
Tier REMIC to the Class X Certificateholders.

     (d) Upon termination of the Trust Fund, any amounts remaining in the Basis
Risk Reserve Fund shall be distributed to the Class X Certificateholders.

     Section 4.7 Supplemental Interest Trust.

     (a) On the Closing Date, the Trustee shall establish and maintain in its
name, a separate trust for the benefit of the holders of the LIBOR Certificates
(the “Supplemental Interest Trust”), into which the Depositor shall initially
deposit $1,000. The Supplemental Interest Trust shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including, without limitation, other
moneys of the Trustee held pursuant to this Agreement.

     (b) The Trustee shall deposit into the Supplemental Interest Trust any Net
Swap Payment required pursuant to Section 4.1(b), any Swap Termination Payment
required pursuant to Sections 4.1(b) and (c) and any amounts from the Basis
Risk Reserve Fund required pursuant to Sections 4.1(d)(iii)(H) and (xi) and
shall distribute from the Supplemental Interest Trust any Net Swap Payment
required pursuant to Section 4.1(e)(i) or Swap Termination Payment required
pursuant to Section 4.1(e)(ii).

     (c) Funds in the Supplemental Interest Trust shall be invested in Eligible
Investments. Any earnings on such amounts shall be distributed on each
Distribution Date

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pursuant to Section 4.1(e). The Class X Certificates shall
evidence ownership of the Supplemental Interest Trust for federal income tax
purposes and the Holder thereof shall direct the Trustee, in writing, as to
investment of amounts on deposit therein. The Class X Certificateholders shall
be liable for any losses incurred on such investments. In the absence of
written instructions from The Class X Certificateholders as to investment of
funds on deposit in the Supplemental Interest Trust, such funds shall be
invested in the Wells Fargo Prime Investment Money Market Fund or comparable
investment vehicle. Any amounts on deposit in the Supplemental Interest Trust
in excess of the Supplemental Interest Trust Amount on any Distribution Date shall be held for distribution pursuant to Section
4.1(e) on the following Distribution Date.

     (d) Upon termination of the Trust Fund, any amounts remaining in the
Supplemental Interest Trust shall be distributed pursuant to the priorities set
forth in Section 4.1(e).

     (e) It is the intention of the parties hereto that, for federal and state
income and state and local franchise tax purposes, the Supplemental Interest
Trust be disregarded as an entity separate from the holder of the Class X
Certificates unless and until the date when either (a) there is more than one
Class X Certificateholder or (b) any Class of Certificates in addition to the
Class X Certificates is recharacterized as an equity interest in the
Supplemental Interest Trust for federal income tax purposes.

     Section 4.8 Rights of Swap Counterparty.

     The Swap Counterparty shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto and shall have the
right, upon designation of an “Early Termination Date” (as defined in the Swap
Agreement), to enforce its rights under this Agreement, which rights include
but are not limited to the obligation of the Trustee (A) to deposit any Net
Swap Payment required pursuant to Section 4.1(b) and any Swap Termination
Payment required pursuant to Sections 4.1(b) and (c) into the Supplemental
Interest Trust, (B) to deposit any amounts from the Basis Risk Reserve Fund
required pursuant to Sections 4.1(d)(iii)(H) and (xi) into the Supplemental
Interest Trust, (C) to pay any Net Swap Payment required pursuant to Section
4.1(e)(i) or Swap Termination Payment required pursuant to Section 4.1(e)(ii)
to the Swap Counterparty and (D) to establish and maintain the Supplemental
Interest Trust, to make such deposits thereto, investments therein and
distributions therefrom as are required pursuant to Section 4.7. For the
protection and enforcement of the provisions of this Section the Swap
Counterparty shall be entitled to such relief as can be given either at law or
in equity.

ARTICLE V

THE CERTIFICATES

     Section 5.1 The Certificates.

     The Certificates shall be substantially in the forms attached as Exhibit A
hereto. The Certificates shall be issuable in registered form, in the minimum
denominations per Class set

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	forth in the Preliminary Statement and, to the
extent applicable, in integral multiples of $1 in excess thereof.

     Subject to Section 9.2 hereof respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by
wire transfer in immediately available funds to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if (i) such Holder
has so notified the Trustee not later than the applicable Record Date and (ii)
such Holder shall hold (A) 100% of the Class Principal Amount of any Class of Certificates
or (B) Certificates of any Class with aggregate principal Denominations of not
less than $1,000,000 or (y) by check mailed by first class mail to such
Certificateholder at the address of such Holder appearing in the Certificate
Register.

     The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized signatory. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased
to be so authorized prior to the countersignature and delivery of such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless countersigned by the Trustee by manual signature, and
such countersignature upon any Certificate shall be conclusive evidence, and
the only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be
issued at the direction of the Depositor, or any Affiliate thereof.

     The Depositor shall provide, or cause to be provided, to the Trustee on a
continuous basis, an adequate inventory of specimen Certificates to facilitate
transfers.

     Section 5.2 Certificate Register; Registration of Transfer and Exchange
of Certificates.

     (a) The Trustee shall maintain, or cause to be maintained, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration
of transfer of any Certificate, the Trustee shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and aggregate Percentage Interest.

     At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates
are so surrendered for exchange, the Trustee shall execute, authenticate and
deliver the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for
registration of transfer or

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exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
Holder thereof or his attorney duly authorized in writing.

     No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.

     All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee in accordance with
the Trustee’s customary procedures.

     (b) No Person shall transfer a Restricted Certificate unless such transfer
(i) is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, (ii) is exempt from
the registration requirements under said Act and such state securities laws and
(iii) is made in compliance with the provisions of this Section. In the event
that a transfer is to be made in reliance upon an exemption from the Securities
Act and such laws, in order to assure compliance with the Securities Act and
such laws, the Certificateholder desiring to effect such transfer and such
Certificateholder’s prospective transferee shall each certify to the Trustee in
writing the facts surrounding the transfer in substantially the forms set forth
in Exhibit F (the “Transferor Certificate”) and deliver a letter in
substantially the form of either Exhibit G-1 (the “Investment Letter”) or
Exhibit G-2 (the “Rule 144A Letter”). The Depositor shall provide to any
Holder of a Restricted Certificate and any prospective transferee designated by
any such Holder, information regarding the related Certificates and the
Mortgage Loans and such other information as shall be necessary to satisfy the
condition to eligibility set forth in Rule 144A(d)(4) for transfer of any such
Certificate without registration thereof under the Securities Act pursuant to
the registration exemption provided by Rule 144A. The Trustee shall cooperate
with the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Restricted Certificate desiring
to effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Depositor, the Seller, the Servicer and the NIMS Insurer, if any, against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.

     No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Trustee (in the event such Certificate is a Restricted Certificate, such
requirement is satisfied only by the Trustee’s receipt of a representation
letter from the transferee substantially in the form set forth in Exhibit H (or
Exhibit E-2, in the case of a Residual Certificate)), to the effect that such
transferee is not an employee benefit plan or other retirement arrangement
subject to Section 406 of ERISA or Section 4975 of the Code (collectively, a
“Plan”), nor a Person acting on behalf of any such Plan or using the assets of
any such Plan to effect such transfer, (ii) if the ERISA-Restricted Certificate
was the subject of an ERISA-Qualifying underwriting and the purchaser is an
insurance company, a representation substantially in the form set forth in
Exhibit H, to the effect that the purchaser is an insurance company which is
purchasing such Certificate with funds contained in an “insurance company

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general account” (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 (“PTCE 95-60”)) and the acquisition and
holding of the ERISA-Restricted Certificate are covered under Sections I and
III of PTCE 95-60; or (iii) in the case of any such ERISA-Restricted
Certificate presented for registration in the name of a Plan or a Person acting
on behalf of such Plan or using such Plan’s assets, an Opinion of Counsel
satisfactory to the Trustee to the effect that the acquisition or holding of
such ERISA-Restricted Certificate will not result in prohibited transactions
under Section 406 of ERISA and Section 4975 of the Code and will not subject the Trustee, the Depositor, the Seller, the Servicer or
the NIMS Insurer, if any, to any obligation in addition to those expressly
undertaken in this Agreement, which Opinion of Counsel will not be at the
expense of any of the above parties or the Trust Fund. Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate to or on behalf of a Plan without the delivery to
the Trustee of a representation letter or an Opinion of Counsel satisfactory to
the Trustee as described above shall be void and of no effect. If the
ERISA-Restricted Certificate is a Book-Entry Certificate, the transferee will
be deemed to have made a representation as provided in (i) or (ii) of this
paragraph, as applicable.

     To the extent permitted under applicable law (including, but not limited
to, ERISA), the Trustee shall be under no liability to any Person for any
registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.2(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.

     No transfer of an ERISA-Restricted Swap Certificate shall be made unless
the Trustee shall have received a representation letter from the transferee of
such Certificate, substantially in the form set forth in Exhibit H, to the
effect that either (i) such transferee is neither a Plan nor a Person acting on
behalf of any such Plan or using the assets of any such Plan to effect such
transfer or (ii) the acquisition and holding of the ERISA- Restricted Swap
Certificate are eligible for exemptive relief under Prohibited Transaction
Class Exemption (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 or PTCE
96-23. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA-Restricted Swap Certificate to or on behalf of a Plan
without the delivery to the Trustee of a representation letter as described
above shall be void and of no effect. If the ERISA-Restricted Swap Certificate
is a Book-Entry Certificate, the transferee will be deemed to have made a
representation as provided in clause (i) or (ii) of this paragraph, as
applicable.

     If any ERISA-Restricted Swap Certificate, or any interest therein, is
acquired or held in violation of the provisions of the preceding paragraph, the
next preceding permitted beneficial owner will be treated as the beneficial
owner of that Certificate, retroactive to the date of transfer to the purported
beneficial owner. Any purported beneficial owner whose acquisition or holding
of an ERISA-Restricted Swap Certificate, or interest therein, was effected in
violation of the provisions of the preceding paragraph shall indemnify to the
extent permitted by law and hold harmless the Depositor, the Trustee and the
Servicer from and against any and all liabilities, claims, costs or expenses
incurred by such parties as a result of such acquisition or holding.

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     To the extent permitted under applicable law (including, but not limited
to, ERISA), the Trustee shall be under no liability to any Person for any
registration of transfer of any ERISA-Restricted Swap Certificate that is in
fact not permitted by this Section 5.2(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Trustee in accordance with the foregoing requirements.

     (c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:

     (i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee.

     (ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred (except for an
initial registration on the Closing Date of the transfer to the Depositor
(or an Affiliate thereof) or the Trustee), and the Trustee shall not
register the transfer of any Residual Certificate (except for an initial
registration on the Closing Date of the transfer to the Depositor (or an
Affiliate thereof) or the Trustee) unless, in addition to the
certificates required to be delivered to the Trustee under subparagraph
(b) above, the Trustee shall have been furnished with an affidavit of the
Holder desiring to effect such transfer (a “Transferor Affidavit”) in the
form attached hereto as Exhibit E-1 and an affidavit of the proposed
transferee (a “Transferee Affidavit”) in the form attached hereto as
Exhibit E-2.

     (iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transferee Affidavit
from any other Person to whom such Person attempts to Transfer its
Ownership Interest in a Residual Certificate, (B) to obtain a Transferee
Affidavit from any Person for whom such Person is acting as nominee,
trustee or agent in connection with any transfer of a Residual
Certificate and (C) not to transfer its Ownership Interest in a Residual
Certificate or to cause the transfer of an Ownership Interest in a
Residual Certificate to any other Person if it has actual knowledge that
such Person is not a Permitted Transferee.

     (iv) Any attempted or purported transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.2(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder
of a Residual Certificate in violation of the provisions of this Section
5.2(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of transfer of a Residual
Certificate that is in fact not permitted by Section 5.2(b) and this
Section 5.2(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the transfer was
registered after receipt of the related Transferee Affidavit, Transferor
Affidavit and either the Rule 144A Letter or the

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Investment Letter. The
Trustee shall be entitled but not obligated to recover from any Holder of
a Residual Certificate that was in fact not a Permitted Transferee at the
time it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on such Residual
Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to
the last preceding Permitted Transferee of such Certificate.

     (v) The Depositor shall promptly make available, upon receipt of
written request from the Trustee, all information necessary to compute
any tax imposed under Section 860E(e) of the Code as a result of a
transfer of an Ownership Interest in a Residual Certificate to any Holder
who is not a Permitted Transferee.

     The restrictions on transfers of a Residual Certificate set forth in this
Section 5.2(c) shall cease to apply (and the applicable portions of the legend
on a Residual Certificate may be deleted) with respect to transfers occurring
after delivery to the Trustee and the NIMS Insurer, if any, of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund,
the Trustee, the NIMS Insurer, if any, or the Depositor, to the effect that the
elimination of such restrictions will not cause an Adverse REMIC Event. Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
hereby consents to any amendment of this Agreement which, based on an Opinion
of Counsel furnished to the Trustee and the NIMS Insurer, if any, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial
interest in, a Residual Certificate is not transferred, directly or indirectly,
to a Person that is not a Permitted Transferee and (b) to provide for a means
to compel the transfer of a Residual Certificate which is held by a Person that
is not a Permitted Transferee to a Holder that is a Permitted Transferee.

     (d) The preparation and delivery of all certificates and opinions referred
to above in this Section 5.2 in connection with transfer shall be at the
expense of the parties to such transfers.

     (e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of Holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and Persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.

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     All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository’s normal procedures.

     If (x) (i) the Depository or the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (ii) the Trustee or the Depositor is unable
to locate a qualified successor, or (y) after the occurrence of an Event of
Default, Certificate Owners representing at least 51% of the Certificate
Balance of the Book-Entry Certificates together advise the Trustee and the
Depository through the Depository Participants in writing that the continuation
of a book-entry system through the Depository is no longer in the best
interests of the Certificate Owners, the Trustee shall notify all Certificate
Owners, through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the related Class of Certificates by
the Depository, accompanied by the instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Depositor nor the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in
relying on, such instructions. The Depositor shall provide the Trustee with an
adequate inventory of certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee, to
the extent applicable with respect to such Definitive Certificates and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder; provided that the Trustee shall not by virtue of
its assumption of such obligations become liable to any party for any act or
failure to act of the Depository.

     Section 5.3 Mutilated, Destroyed, Lost or Stolen
Certificates.

     If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and (b) there is delivered to the Depositor and the Trustee
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Trustee that such Certificate
has been acquired by a bona fide purchaser, the Trustee shall execute,
countersign and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.3, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.3 shall constitute complete and indefeasible
evidence of ownership, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.

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     Section 5.4 Persons Deemed Owners.

     The Trustee and any agent of the Trustee and the NIMS Insurer, if any, may
treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Trustee nor
any agent of the Trustee shall be affected by any notice to the contrary.

     Section 5.5 Access to List of Certificateholders’ Names and
Addresses.

     If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor shall request such information in writing from the Trustee, then the
Trustee shall, within ten Business Days after the receipt of such request,
provide the Depositor or such Certificateholders and the NIMS Insurer, if any,
at such recipients’ expense the most recent list of the Certificateholders of
such Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.

     Section 5.6 Maintenance of Office or Agency.

     Certificates may be surrendered for registration of transfer or exchange
at the Corporate Trust Office. The Trustee will give prompt written notice to
the Certificateholders of any change in such location of any such office or
agency.

ARTICLE VI

THE DEPOSITOR, THE SERVICER, THE SELLER AND THE CREDIT RISK MANAGER

     Section 6.1 Respective Liabilities of the Depositor, Servicer, Seller
and Credit Risk Manager.

     The Depositor, the Servicer, the Seller and the Credit Risk Manager shall
each be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.

     Section 6.2 Merger or Consolidation of the Depositor, Servicer, Seller
and Credit Risk Manager.

     (a) Other than as provided in the following paragraph, the Depositor, the
Servicer, the Seller and the Credit Risk Manager will each keep in full effect
its existence, rights and franchises under the laws of the United States or
under the laws of one of the states thereof and will each obtain and preserve
its qualification to do business in each jurisdiction in which such

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qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.

     Any Person into which the Depositor, the Servicer, the Seller or the
Credit Risk Manager may be merged or consolidated, or any Person resulting from
any merger or consolidation to which the Depositor, the Servicer, the Seller or
the Credit Risk Manager shall be a party, or any person succeeding to the
business of the Depositor, the Servicer, the Seller or the Credit Risk Manager
shall be the successor of the Depositor, the Servicer, the Seller or the Credit
Risk Manager, as the case may be, 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; provided, however, that the successor
or surviving Person to the Servicer shall be qualified to sell mortgage loans
to, and to service mortgage loans on behalf of, FNMA or FHLMC.

     (b) Other than as provided in subsection (a) of this Section 6.2, in the
event that the Servicer determines that it will no longer engage in the
business of servicing residential mortgage loans, the Servicer shall so notify
the Seller and the Depositor in writing. Upon receipt of such notice, the
Seller may transfer the servicing of the Mortgage Loans from the Servicer to a
successor mortgage loan servicing company acceptable to the Trustee, each
Rating Agency, the Class X Certificateholders and the NIMS Insurer, if any, and
such mortgage loan servicing company shall assume, satisfy, perform and carry
out all liabilities, duties, responsibilities and obligations that are to be,
or otherwise were to have been, satisfied, performed and carried out by the
resigning Servicer hereunder. If the Seller either (x) does not respond within
thirty (30) calendar days to the notice delivered to it pursuant to the first
sentence of this paragraph or (y) advises the Servicer in writing that the
Seller does not intend to exercise its right to transfer the servicing, then
the Servicer may assign its rights under this Agreement to a successor mortgage
loan servicing company acceptable to the Seller, the Depositor, the Trustee,
each Rating Agency, the Class X Certificateholders and the NIMS Insurer, if
any, provided that (i) each of the Seller, the Depositor, the Trustee, each
Rating Agency, the Class X Certificateholders and the NIMS Insurer, if any,
shall have delivered their consent to such assignment in writing to the
Servicer and to each other such party, (ii) the consent of each Rating Agency
shall be evidenced by a letter to the effect that the ratings assigned to any
Class of Certificates will not be qualified, reduced or withdrawn as a result
of such transfer and (iii) the Servicer shall be liable for all costs
associated with the transfer of servicing from the resigning Servicer to a
successor servicer; and provided, further, that the resigning Servicer shall
indemnify the Trust Fund, the Trustee, the Seller, the Depositor, each
Certificateholder, the NIMS Insurer (if any), the successor servicer and any
subservicer for, and hold each such party harmless against, any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs, and
judgments, and any and all other costs, fees and expenses, that any such party
may sustain in any related to such assignment. No assignment by the Servicer
shall become effective until the requirements of this paragraph have been
satisfied and a successor servicer shall have entered into an agreement
pursuant to which such successor shall assume, satisfy, perform and carry out
all liabilities, duties, responsibilities and obligations that are to be, or
otherwise were to have been, satisfied, performed and carried out by the
resigning Servicer hereunder (other than those liabilities arising prior to the
appointment of such successor, which shall continue to be the responsibility of
the resigning Servicer). Any such assignment shall not relieve the resigning
Servicer of responsibility for any

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of its liabilities, duties, responsibilities
and obligations under this Agreement except to the extent that such
liabilities, duties, responsibilities and obligations have been expressly
assumed by the successor servicer.

     Section 6.3 Limitation on Liability of the Depositor, the Servicer, the
Seller and Others.

     None of the Depositor, the Servicer, the Seller, the Credit Risk Manager
or any of the directors, officers, employees or agents of the Depositor, the
Servicer, the Seller or the Credit Risk Manager shall be under any liability to
the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Servicer, the Seller, the Credit Risk Manager or any such Person
against any breach of representations or warranties made by it herein or
protect the Depositor, the Servicer, the Seller, or the Credit Risk Manager or
any such Person from any liability which would otherwise be imposed by reasons
of willful misfeasance, bad faith or negligence in the performance of duties or
by reason of reckless disregard of obligations and duties hereunder. The
Depositor, the Servicer, the Seller, the Credit Risk Manager and any director,
officer, employee or agent of the Depositor, the Servicer, the Seller, or the
Credit Risk Manager may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Servicer, the Seller, the Credit Risk
Manager and any director, officer, employee or agent of the Depositor, the
Servicer, the Seller, or the Credit Risk Manager shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense incurred in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or
the performance of their respective obligations hereunder or under the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Servicer, the Seller, or the Credit Risk
Manager shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and
which in its opinion may involve it in any expense or liability; provided,
however, that any of the Depositor, the Servicer, the Seller, or the Credit
Risk Manager may in its discretion undertake any such action that it may deem
necessary or desirable in respect of this Agreement and the rights and duties
of the parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Depositor, the Servicer, the Seller, and the Credit Risk
Manager shall be entitled to be reimbursed therefor out of the Collection
Account.

     Section 6.4 Limitation on Resignation of Servicer.

     The Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) upon appointment of a successor servicer and receipt
by the Trustee of a letter from each Rating Agency that such a resignation and
appointment will not result in a downgrading of the rating of any of the
Certificates, or (b) upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination under clause (b)
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered

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to the Trustee and the NIMS Insurer, if any.
No such resignation shall become effective until the Trustee or a successor
servicer shall have assumed the Servicer’s responsibilities, duties,
liabilities and obligations hereunder.

     Section 6.5 Reporting Requirements of the Commission and
Indemnification.

     Notwithstanding any other provision of this Agreement, the Servicer (i)
agrees to negotiate in good faith any amendment or modification (including an
indemnification agreed to in connection therewith) to this Agreement as may be
necessary, in the judgment of the Depositor and its counsel (as evidenced by an
opinion of such counsel addressed to the Servicer), to comply with any rules
promulgated by the Commission and any interpretations thereof by the staff of
the Commission (collectively, “SEC Rules”) and (ii) shall with reasonable
notice and upon written request provide to the Depositor for inclusion in any
periodic report required to be filed under the Exchange Act such items of
information regarding this Agreement and matters related to the Servicer,
including as applicable (by way of example and not limitation), a description
of any material litigation or governmental action or proceeding involving the
Servicer or its affiliates (collectively, the “Servicer Information”),
provided, that such information shall be required to be provided by the
Servicer only to the extent that it shall be determined by the Depositor and
its counsel (as evidenced by an opinion of such counsel addressed to the
Servicer) to be necessary to comply with any SEC Rules.

ARTICLE VII

SERVICER DEFAULT

     Section 7.1 Events of Default.

     (a) “Event of Default,” wherever used herein, means any one of the
following events:

     (i) any failure by the Servicer to (a) deposit in the Collection
Account or (b) remit to the Trustee any payment required to be made under
the terms of this Agreement, which failure (x) in the case of clause (a)
above, shall continue unremedied for five days, or (y) in the case of
clause (b) above, shall continue unremedied for one Business Day, after
(in each case) the date upon which written notice of such failure shall
have been given to the Servicer by the Trustee or the Depositor or to the
Trustee by the Holders of Certificates having not less than 50% of the
Voting Rights evidenced by the Certificates; or

     (ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Servicer contained in this Agreement, which failure materially
affects the rights of Certificateholders, which failure continues
unremedied for a period of 60 days after the date on which written notice
of such failure shall have been given to the Servicer by the Trustee, the
Seller, or the Depositor, or to the Servicer and the Trustee by the
Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates; provided, however, that the 60-day cure
period shall not apply to the initial delivery of the Mortgage File for

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Delay Delivery Mortgage Loans nor the failure to substitute or repurchase
in lieu thereof; or

     (iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Servicer and such
decree or order shall have remained in force undischarged or unstayed for
a period of 60 consecutive days; or

     (iv) the Servicer shall consent to the appointment of a receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to the Servicer or
all or substantially all of the property of the Servicer; or

     (v) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of,
or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or

     (vi) failure by the Servicer to maintain its license to do business
or service residential mortgage loans in any jurisdiction, if required by
such jurisdiction, where the Mortgaged Properties are located, except to
the extent that such failure does not, as evidenced by an Opinion of
Counsel provided by the Servicer to the Seller, the Depositor, the
Trustee and the NIMS Insurer (if any) to the effect that such failure
does not have a materially adverse effect on the Servicer’s ability to
service the related Mortgage Loans, or on the Trust Fund; or

     (vii) the Servicer ceases to meet the qualifications of a Fannie Mae
or Freddie Mac seller/servicer.

     Upon determination by the Trustee that an Event of Default has occurred,
the Trustee (a) may terminate the Servicer hereunder, if in its judgment such
termination is in the best interests of the Trust Fund; or (b) shall terminate
the Servicer hereunder, if instructed to do so by the NIMS Insurer, if any, the
majority Class X Certificateholders or the Holders of Certificates evidencing
not less than 50% of the Voting Rights evidenced by the Certificates exercised
in writing following delivery to such Holders by the Trustee of notice of the
occurrence of such Event of Default pursuant to Section 7.2(b).

     Upon any such termination, the Trustee shall enter into a substitute
servicing arrangement with another mortgage loan servicing company acceptable
to the Trustee, each Rating Agency, the Class X Certificateholders and the NIMS
Insurer, if any, under which such mortgage loan servicing company shall assume,
satisfy, perform and carry out all liabilities, duties, responsibilities and
obligations that are to be, or otherwise were to have been, satisfied,
performed and carried out by the terminated Servicer hereunder. Until such
time as the Trustee enters into a substitute servicing agreement with respect
to the Mortgage Loans, the Trustee shall assume, satisfy, perform and carry out
all obligations which otherwise were to have been

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satisfied, performed and
carried out by the terminated Servicer; provided, however, that, without
affecting the immediate termination of the rights of the Servicer hereunder, it
is understood and acknowledged by the parties hereto that there will be a
period of transition not to exceed 90 days (the “Transition Period”) before the
servicing transfer is fully effected. During the Transition Period, neither
the successor servicer nor the Trustee shall be responsible for the lack of information and documents that it cannot reasonably obtain on a
practicable basis under the circumstances. As compensation to the Trustee for
any servicing obligations fulfilled or assumed by the Trustee, the Trustee
shall be entitled to any servicing compensation to which the terminated
Servicer would have been entitled if such Servicer had not been terminated.
The successor servicer (whether the Trustee or an entity appointed by the
Trustee) shall be entitled to be reimbursed by the Servicer (or from the Trust
Fund if the Servicer is unable to fulfill its obligations hereunder) for all
reasonable “out-of-pocket” costs associated with the transfer of servicing from
the predecessor servicer, including, without limitation, any reasonable
“out-of-pocket” costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
servicer to service the Mortgage Loans properly and effectively.

     (b) Without regard to whether an Event of Default has occurred, upon the
occurrence of a Servicer Trigger Event, the Seller shall have the option to
terminate the Servicer hereunder and appoint a successor mortgage loan
servicing company acceptable to the Trustee, each Rating Agency, the Class X
Certificateholders and the NIMS Insurer, if any, under which such mortgage loan
servicing company shall assume, satisfy, perform and carry out all liabilities,
duties, responsibilities and obligations that are to be, or otherwise were to
have been, satisfied, performed and carried out by the terminated Servicer
hereunder. For purposes of this Section 7.1(b), “Servicer Trigger Event” shall
have the meaning assigned to the term “Trigger Event” in the Purchase Price and
Terms Letter, 2004-3 Servicing Rights Sale, dated as of June 2, 2004, between
the Seller and the Servicer, a copy of which has been received and acknowledged
by the Trustee.

     (c) Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late
collection of any payment on a Mortgage Loan which was due prior to the notice
terminating such Servicer’s rights and obligations as Servicer hereunder and
received after such notice, that portion thereof to which such Servicer would
have been entitled pursuant to Sections 3.8(a)(i) through (viii), and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder.

     In no event shall the termination of the Servicer under this Agreement
result in any diminution of the Servicer’s right to reimbursement for any
outstanding Advances or Servicing Advances or accrued and unpaid Servicing Fees
due such Servicer at the time of termination. The successor servicer shall be
obligated to promptly reimburse the terminated Servicer for outstanding
Advances and Servicing Advances and accrued and unpaid Servicing Fees provided,
however, that such reimbursement obligation shall be limited to the funds
available in the Collection Account for such purposes pursuant to Sections
3.8(a)(ii), (iii) and (v) of this Agreement. In addition, any such
reimbursement for outstanding Advances and Servicing

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Advances and accrued and
unpaid Servicing Fees shall be made on a first in, first out (“FIFO”) basis no
later than the 18th day of each month, provided that the successor servicer has
received prior written notice from the appropriate party, pursuant to this
Agreement, of such reimbursement amount.

     (d) Without regard to whether an Event of Default has occurred, the
Servicer shall, promptly following the occurrence of any failure by the
Servicer to remit to the Trustee any payment required to be made under the
terms of this Agreement as provided in paragraph (a)(i)(b) of this Section, pay
to the Trustee (i) the amount of any investment income that would have been
earned on amounts in the Distribution Account had such failure not occurred and
(ii) the amount of any additional costs or expenses incurred by the Trustee as
a result of such failure.

     Section 7.2 Notification to Certificateholders.

     (a) Upon any termination of or appointment of a successor to the Servicer,
the Trustee shall give prompt written notice thereof to Certificateholders,
each Rating Agency and the NIMS Insurer, if any.

     (b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and the NIMS Insurer,
if any, notice of each such Event of Default hereunder known to the Trustee,
unless such Event of Default shall have been cured or waived.

ARTICLE VIII

CONCERNING THE TRUSTEE

     Section 8.1 Duties of Trustee.

     The Trustee, prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge and after the curing of
all Events of Default that may have occurred, shall undertake to perform such
duties and only such duties as are specifically set forth in this Agreement.
In case an Event of Default of which a Responsible Officer of the Trustee has
actual knowledge has occurred and remains uncured, the Trustee shall exercise
such of the rights and powers vested in it by this Agreement, and use the same
degree of care and skill in their exercise as a prudent person would exercise
or use under the circumstances in the conduct of such person’s own affairs.

     The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
If any such instrument is found not to conform in any material respect to the
requirements of this Agreement, the Trustee shall notify the Certificateholders
and the NIMS Insurer, if any, of such instrument in the event that the Trustee,
after so requesting, does not receive a satisfactorily corrected instrument.

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     No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own willful misconduct; provided, however, that:

     (i) unless an Event of Default of which a Responsible Officer of the
Trustee has actual knowledge shall have occurred and be continuing, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Agreement which it believed in good faith to be genuine and to have
been duly executed by the proper authorities respecting any matters
arising hereunder;

     (ii) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be finally proven by a court having jurisdiction
that the Trustee was negligent in ascertaining the pertinent facts;

     (iii) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Holders of Certificates evidencing not less than
25% of the Voting Rights of Certificates relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee
under this Agreement;

     (iv) the Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of
its duties hereunder or the exercise of any of its rights or powers if
there is reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not assured to
it, and none of the provisions contained in this Agreement shall in any
event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this
Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and
privileges of, the Servicer; and

     (v) without limiting the generality of this Section 8.1, the Trustee
shall have no duty (A) to see to any recording, filing, or depositing of
this Agreement or any agreement referred to herein or any financing
statement or continuation statement evidencing a security interest, or to
see to the maintenance of any such recording or filing or deposit or to
any rerecording, refiling or redepositing of any thereof, (B) to see to
the provision of any insurance, (C) to see to the payment or discharge of
any tax, assessment, or other governmental charge or any lien or
encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund other than from funds available in
the Distribution Account (D) to confirm or verify the contents of any
reports or certificates of the Servicer delivered to the Trustee pursuant
to this Agreement believed

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by the Trustee to be genuine and to have been
signed or presented by the proper party or parties.

     Section 8.2 Certain Matters Affecting the Trustee.

     Except as otherwise provided in Section 8.1:

     (i) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officers’
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties and the Trustee
shall have no responsibility to ascertain or confirm the genuineness of
any signature of any such party or parties;

     (ii) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any advice of counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel;

     (iii) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;

     (iv) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
Holders of Certificates evidencing not less than 25% of the Voting Rights
allocated to each Class of Certificates; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require indemnity satisfactory to the Trustee
against such cost, expense or liability as a condition to taking any such
action.

     (v) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of such agent, accountant or
attorney appointed by the Trustee with due care;

     (vi) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers
hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it;

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     (vii) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the
investment security);

     (viii) the Trustee shall not be deemed to have knowledge of an Event
of Default until a Responsible Officer of the Trustee shall have received
written notice thereof and in the absence of such notice, the Trustee may
conclusively assume that there is no Event of Default;

     (ix) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity satisfactory
to the Trustee against the costs, expenses and liabilities which may be
incurred therein or thereby;

     (x) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act; and

     (xi) the Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers
granted hereunder.

     Section 8.3 Trustee Not Liable for Certificates or Mortgage
Loans.

     The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor, the Seller or Servicer, as the case may be,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Agreement or
of the Certificates or of any Mortgage Loan or related document other than with
respect to the Trustee’s execution and counter-signature of the Certificates.
The Trustee shall not be accountable for the use or application by the
Depositor or the Servicer of any funds paid to the Depositor or the Servicer in
respect of the Mortgage Loans or deposited in or withdrawn from the Collection
Account by the Depositor or the Servicer.

     Section 8.4 Trustee May Own Certificates.

     The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights as it would have if it were not
the Trustee.

     Section 8.5 Trustee’s Fees and Expenses.

     The Trustee, as compensation for its activities prior to making the
distributions pursuant to Section 4.1 hereunder, shall be entitled to (i)
deduct from the Distribution Account an amount equal to the Trustee Fee for
such Distribution Date and (ii) retain any earnings on or investment income
with respect to funds in the Distribution Account as provided in Section 3.8.

     The Trustee shall, subject to the limitation on amounts reimbursable to
the Trustee in any Anniversary Year as provided in this Agreement, also be
entitled to reimburse itself from the

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Distribution Account for reasonable
expenses, except for expenses, disbursements and advances incurred by the
Trustee in the routine administration of its duties in accordance with this Agreement and any such expenses, disbursements or advances arising from
its negligence, bad faith or willful misconduct. The Trust Fund shall, subject
to the limitation on amounts reimbursable to the Trustee in any Anniversary
Year as provided in this Agreement, indemnify and hold harmless the Trustee,
the Paying Agent or the Custodian and any director, officer, employee or agent
thereof against any loss, liability and expense, including reasonable
attorney’s fees, incurred in connection with or arising out of this Agreement,
any custodial agreement or the Certificates, including, but not limited to, any
such loss, liability or expense incurred in connection with any legal action
against the Trust Fund or the Trustee, the Paying Agent or the Custodian or any
director, officer, employee or agent thereof, or the performance of any of the
duties of the Trustee or the Paying Agent under this Agreement or the duties of
the Custodian under any custodial agreement (including, but not limited to, the
execution and delivery of documents in connection with a foreclosure sale,
trustee’s sale, or deed in lieu of foreclosure of a Mortgage Loan, including,
but not, limited to, any deed of reconveyance, any substitution of trustee
documents or any other documents to release, satisfy, cancel or discharge any
Mortgage Loan), other than, in each case, any loss, liability or expense
incurred by the Trustee, the Paying Agent or the Custodian by reason of the
willful misfeasance, bad faith or negligence of such party in the performance
of its duties under this Agreement or by reason of the willful misfeasance, bad
faith or gross negligence of the Custodian under any custodial agreement
(including specifically any loss, liability or expense incurred by the
Custodian by reason of simple negligence). The provisions of this Section 8.5
shall survive the resignation or removal of the Trustee or the Paying Agent and
the termination of this Agreement and the resignation or removal of the
Custodian under any custodial agreement.

     The Trustee may receive an additional indemnity from a party acceptable to
the Trustee.

     Section 8.6 Eligibility Requirements for Trustee.

     The Trustee hereunder shall at all times (i) be a corporation or an
association organized and doing business under the laws of a state or the
United States of America, (ii) be authorized under such laws to exercise
corporate trust powers, (iii) have a combined capital and surplus of at least
$50,000,000, (iv) be subject to supervision or examination by federal or state
authority, (v) have a credit rating that would not cause any Rating Agency to
reduce its then-current ratings of the Certificates (or have provided such
security from time to time as is sufficient to avoid such reduction) and (vi)
not be an affiliate of the Servicer or any successor servicer. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 8.6 the combined
capital and surplus of such corporation or association shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 8.6, the Trustee
shall resign immediately in the manner and with the effect specified in Section
8.7 hereof. The entity serving as Trustee may have normal banking and trust
relationships with the Depositor and its affiliates.

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     Section 8.7 Resignation and Removal of Trustee.

     The Trustee may at any time resign and be discharged from the trust hereby
created by giving written notice of resignation to the Depositor, the Servicer,
each Rating Agency and the NIMS Insurer, if any, not less than 60 days before
the date specified in such notice when, subject to Section 8.8, such
resignation is to take effect, and acceptance by a successor trustee in
accordance with Section 8.8 meeting the qualifications set forth in Section
8.6. If no successor trustee meeting such qualifications shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice or resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.

     If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.6 hereof and shall fail to resign after written
request thereto by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a
tax is imposed with respect to the Trust Fund by any state in which the Trustee
or the Trust Fund is located and the imposition of such tax would be avoided by
the appointment of a different trustee, then the Depositor may remove the
Trustee and appoint a successor trustee by written instrument, in triplicate,
one copy of which instrument shall be delivered to each of the Trustee, the
Servicer and the successor trustee.

     The NIMS Insurer, if any, and the Holders of Certificates entitled to at
least 51% of the Voting Rights each may at any time remove the Trustee and
appoint a successor trustee by written instrument or instruments, in
triplicate, signed by the NIMS Insurer, if any, or such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered by the successor trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. Notice
of any removal of the Trustee shall be given to each Rating Agency and the NIMS
Insurer, if any, by the successor trustee.

     Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.7 shall become
effective upon acceptance by the successor trustee of appointment as provided
in Section 8.8 hereof.

     Section 8.8 Successor Trustee.

     Any successor trustee appointed as provided in Section 8.7 hereof shall
execute, acknowledge and deliver to the Depositor, the Seller, the NIMS
Insurer, if any, its predecessor trustee and the Servicer an instrument
accepting such appointment hereunder and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The Depositor, the
Servicer, the Seller, and the NIMS Insurer, if any, and the predecessor trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor trustee all such rights, powers, duties, and obligations.

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     No successor trustee shall accept appointment as provided in this Section
8.8 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.6 hereof and its appointment shall
not adversely affect the then current rating of the Certificates.

     Upon acceptance of appointment by a successor trustee as provided in this
Section 8.8, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates. If the Depositor fails to mail such
notice within 10 days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of
the Depositor.

     Section 8.9 Merger or Consolidation of Trustee.

     Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor
of the Trustee hereunder, provided that such corporation shall be eligible
under the provisions of Section 8.6 hereof, without the execution or filing of
any paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.

     Section 8.10 Appointment of Co-Trustee or Separate Trustee.

     Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time
be located, the Servicer and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders and the NIMS Insurer, if any, such title to
the Trust Fund or any part thereof, whichever is applicable, and, subject to
the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Servicer and the Trustee may consider necessary or
desirable. If the Servicer shall not have joined in such appointment within
15 days after the receipt by it of a request to do so, or in the case an Event
of Default shall have occurred and be continuing, the Trustee alone shall have
the power to make such appointment. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 8.6 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.8.

     Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

     (i) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and each such separate trustee or co-trustee
jointly (it being understood that each such separate trustee

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or co-trustee is not authorized to act separately without the
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;

     (ii) No trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute any such
separate trustee or co-trustee as agent of the Trustee;

     (iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and

     (iv) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to
any such separate trustee or co-trustee.

     Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the separate trustees and co-trustees at the same
time, as effectively as if given to each of them. Every instrument appointing
any separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Servicer, the Depositor and the NIMS
Insurer, if any.

     Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Trustee, to the extent permitted by law, without the appointment of a
new or successor trustee.

     Section 8.11 Tax Matters.

     (a) It is intended that the assets with respect to which the REMIC
elections are to be made, as set forth in Preliminary Statement, shall
constitute, and that the conduct of matters relating to such assets shall be
such as to qualify such assets as, REMICs as defined in and in accordance with
the REMIC Provisions. In furtherance of such intention, the Trustee covenants
and agrees that it shall act as agent (and the Trustee is hereby appointed to
act as agent) on behalf of each such REMIC and that in such capacity it shall:
(a) prepare and file, or cause to be prepared and filed, in a timely manner, a
U.S. Real Estate Mortgage Investment Conduit Income

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Tax Return (Form 1066 or any successor form adopted by the Internal
Revenue Service) and prepare and file or cause to be prepared and filed with
the Internal Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with respect to each
such REMIC, containing such information and at the times and in the manner as
may be required by the Code or state or local tax laws, regulations, or rules,
and furnish or cause to be furnished to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby; (b) within 30 days of the Closing Date, furnish or cause to be
furnished to the Internal Revenue Service, on Forms 8811 or as otherwise may be
required by the Code, the name, title, address, and telephone number of the
person that the Holders of the Certificates may contact for tax information
relating thereto, together with such additional information as may be required
by such Form, and update such information at the time or times in the manner
required by the Code; (c) make or cause to be made REMIC elections as directed
in the Preliminary Statement on the federal tax returns for each such REMIC’s
first taxable year (and, if necessary, under applicable state law); (d) prepare
and forward, or cause to be prepared and forwarded, to the Certificateholders,
the NIMS Insurer, if any, the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the prepayment
assumption; (e) provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax); (f) to the extent that they are under its control conduct
matters relating to such assets at all times that any Certificates are
outstanding so as to maintain the status of each REMIC created hereunder under
the REMIC Provisions; (g) not knowingly or intentionally take any action or
omit to take any action that would cause an Adverse REMIC Event; (h) pay the
amount of any federal, state or local tax, including prohibited transaction
taxes as described below, imposed on any such REMIC prior to its termination
when and as the same shall be due and payable (but such obligation shall not
prevent the Trustee or any other appropriate Person from contesting any such
tax in appropriate proceedings and shall not prevent the Trustee from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings); (i) ensure that federal, state or local income tax or
information returns shall be signed by the Trustee or such other person as may
be required to sign such returns by the Code or state or local laws,
regulations or rules; (j) maintain records relating to any such REMIC,
including but not limited to the income, expenses, assets and liabilities
thereof and the fair market value and adjusted basis of the assets determined
at such intervals as may be required by the Code, as may be necessary to
prepare the foregoing returns, schedules, statements or information; and (k) as
and when necessary and appropriate, represent any such REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any such REMIC, enter into settlement agreements with any
governmental taxing agency, extend any statute of l
imitations relating to any
tax item of any such REMIC, and otherwise act on behalf of any such REMIC in
relation to any tax matter or controversy involving it.

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     To enable the Trustee to perform its duties as set forth herein, the
Depositor shall provide, or cause to be provided, to the Trustee within 10 days
after the Closing Date all information or data that the Trustee requests in
writing and determines to be relevant for tax purposes to the valuations and
offering prices of the Certificates, including, without limitation, the price,
yield, prepayment assumption and projected cash flows of the Certificates and
the Mortgage Loans. Thereafter, the Depositor shall provide to the Trustee
promptly upon written request therefor, any such additional information or data
that the Trustee may, from time to time, reasonably request in order to enable
the Trustee to perform its duties as set forth herein. The Depositor hereby
indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause
to be provided, accurate information or data to the Trustee on a timely basis.

     The Depositor, the Servicer and the Trustee covenant and agree that (i)
they shall, to the extent such matters are under their control, conduct matters
relating to the assets of the Trust Fund at all times that any Certificates are
outstanding so as to maintain the status of each REMIC created hereunder under
the REMIC Provisions (and, with respect to matters that are under its control
and which are otherwise required to be performed by the Trustee pursuant to
this Agreement, the Trustee shall maintain the treatment of each of the Basis
Risk Reserve Fund and the Supplemental Interest Trust and the rights with
respect to payments from each of the Basis Risk Reserve Fund and the
Supplemental Interest Trust as provided in paragraph (b) below), and (ii) it
shall not knowingly or intentionally take any action or omit to take any action
that would cause an Adverse REMIC Event.

     (b) The Trustee shall treat each of the Basis Risk Reserve Fund and the
Supplemental Interest Trust as an outside reserve fund within the meaning of
Treasury Regulation Section 1.860G-2(h) that is owned by the Holders of the
Class X Certificates and that is not an asset of any REMIC and all amounts
deposited into the Basis Risk Reserve Fund or the Supplemental Interest Trust
shall be treated as amounts distributed to the Class X Certificateholders.

     (c) The Trustee shall treat the holders of Certificates (other than the
Class P, Class X and Class R Certificates) as having entered into a notional
principal contract with respect to the holders of the Class X Certificates.
Pursuant to each such notional principal contract, all holders of Certificates
(other than the Class P, Class X and Class R Certificates) shall be treated as
having agreed to pay, on each Distribution Date, to the holders of the Class X
Certificates an aggregate amount equal to the excess, if any, of (i) the amount
payable on such Distribution Date on the interest in REMIC 4 corresponding to
such Class of Certificates over (ii) the amount payable on such Class of
Certificates on such Distribution Date (such excess, a “Class I Shortfall”). A
Class I Shortfall payable from interest collections shall be allocated pro rata
among such Certificates based on the amount of interest otherwise payable to
such Certificates, and a Class I Shortfall payable from principal collections
shall be allocated to the most subordinate Class of Certificates with an
outstanding principal balance to the extent of such balance. In addition,
pursuant to such notional principal contract, the holder of the Class X
Certificates shall be treated as having agreed to pay Basis Risk Shortfalls and
Unpaid Basis Risk Shortfalls to the holders of the Certificates (other than the
Class P, Class X and Class R

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Certificates) in accordance with the terms of this Agreement. Any
payments to the Certificates in light of the foregoing shall not be payments
with respect to a “regular interest” in a REMIC within the meaning of Code
Section 860G(a)(1). However, any payment from the Certificates of a Class I
Shortfall shall be treated for tax purposes as having been received by the
holders of such Certificates in respect of their Interests in REMIC 4 and as
having been paid by such holders to the Supplemental Interest Trust pursuant to
the notional principal contract. Thus, each Certificate (other than the Class
P, Class X and Class R Certificates) shall be treated as representing not only
ownership of regular interests in the Upper Tier REMIC, but also ownership of
an interest in (and obligations with respect to) a notional principal contract.
For tax purposes, the notional principal contract shall be deemed to have a
value of $10,000.

     (d) Notwithstanding the priority and sources of payments set forth in
Article IV hereof or otherwise, the Trustee shall account for all distributions
on the Certificates as set forth in this section. In no event shall any
payments of Basis Risk Shortfalls or Unpaid Basis Risk Shortfalls provided for
in this section be treated as payments with respect to a “regular interest” in
a REMIC within the meaning of Code Section 860G(a)(1).

     (e) The Preliminary Statement to this Agreement sets forth the
designations and “latest possible maturity date” for federal income tax
purposes of all interests in each of the REMICs created hereby. The “tax
matters person” with respect to each REMIC hereunder shall be the Trustee and
the Trustee shall hold the Tax Matters Person Certificate. Each REMIC’s fiscal
year shall be the calendar year.

     Section 8.12 Filings.

     (a) The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Thereafter, within 15 days (or, if applicable,
within such shorter period of time as is required under the rules of the
Commission) after each Distribution Date, the Trustee shall, in accordance with
industry standards, file with the Commission via the Electronic Data Gathering
and Retrieval System (EDGAR), a Form 8-K with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
January 30, 2005, the Trustee shall, in accordance with industry standards,
file a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable. On or prior to March 20, 2005 (or if such day is not a Business
Day, the preceding Business Day), the Trustee shall prepare a Form 10-K and
submit it to the Depositor. The Depositor shall execute the Form 10-K and
return it to the Trustee no later than March 25, 2005 (or if such day is not a
Business Day, the preceding Business Day). Prior to March 30, 2005, the
Trustee shall file the Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. The Form 10-K shall include the
certification required pursuant to Rule 13a-14 under the Exchange Act and any
future guidance from the Commission (the “Form 10-K Certification”) signed by
an appropriate party or parties (which Form 10-K Certification the Trustee
shall not be required to sign). The Depositor hereby grants to the Trustee a
limited power of attorney to execute and file each Form 8-K on behalf of the
Depositor. Such power of attorney shall continue until either the earlier of
(i) receipt by the Trustee from the Depositor of written termination of such
power of attorney and (ii) the termination of the Trust Fund. The Depositor
agrees to promptly furnish to the Trustee, from time to time upon request, such
further information, reports, and financial statements within its control related to this Agreement and the Mortgage Loans as the Trustee
reasonably deems

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appropriate to prepare and file all necessary reports with the
Commission. The Trustee shall have no responsibility to file any items other
than those specified in this section.

     (b) If so requested, the Trustee shall sign a certification (in the form
attached hereto as Exhibit L) for the benefit of the Person(s) signing the Form
10-K Certification regarding certain aspects of such Form 10-K Certification
(provided, however, that the Trustee shall not be required to undertake an
analysis of the accountant’s report attached as an exhibit to the Form 10-K).

     (c) Each Person (including their officers or directors) that signs any
Form 10-K Certification shall be entitled to indemnification from the Trust
Fund for any liability or expense incurred by it in connection with such
certification, other than any liability or expense attributable to such
Person’s own bad faith, negligence or willful misconduct. The provisions of
this subsection shall survive any termination of this Agreement and the
resignation or removal of such Person.

     (d) Upon any filing with the Commission, the Trustee shall promptly
deliver to the Depositor a copy of any executed report, statement or
information.

     (e) The fiscal year of the Trust Fund for all filing purposes shall be the
calendar year.

     (f) For so long as a certificate under the Sarbanes-Oxley Act of 2002, as
amended (“Sarbanes-Oxley”) is required to be delivered on behalf of the Trust
Fund, a Servicing Officer shall execute and deliver on March 15 of each
applicable year, commencing in 2005, an Officer’s Certificate to the Depositor
for the benefit of the Depositor and its officers, directors and affiliates, in
the form of Exhibit K hereto.

     Section 8.13 Reporting Requirements of the Commission and
Indemnification

     Notwithstanding any other provision of this Agreement, to the extent that,
following the Closing Date, the contents of Forms 8-K, 10-K or other Forms
required by the Exchange Act and the rules and regulations of the Commission,
or the time by which such Forms are required to be filed, differ from the
provisions of this Agreement, the Trustee hereby agrees that it shall
reasonably cooperate to amend the provisions of this Agreement (in accordance
with Section 10.1) in order to comply with such amended reporting requirements.
Any such amendment to this Agreement may result in the reduction or increase
of the reports filed under the Exchange Act. Notwithstanding the foregoing,
the Trustee shall not be obligated to enter into any amendment pursuant to this
Section that adversely affects its obligations and immunities under this
Agreement.

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ARTICLE IX

TERMINATION

     Section 9.1 Termination upon Liquidation or Purchase of all Mortgage
Loans.

     (a) Subject to Section 9.3, the obligations and responsibilities of the
Depositor, the Servicer, the Seller and the Trustee created hereby with respect
to the Trust Fund shall terminate upon the earlier of:

     (i) the purchase by the Majority Class X Certificateholders or their
designee (or the NIMS Insurer or the Servicer, to the extent provided
herein) of all Mortgage Loans (including REO Properties not otherwise
disposed of pursuant to Section 3.11(i)) remaining in the Trust Fund at a
price equal to the sum of (A) 100% of the unpaid principal balance of
each Mortgage Loan, (B) the lesser of (x) the appraised value of any REO
Property as determined by a real estate broker meeting the
qualifications, and applying broker’s price opinion methodology,
generally acceptable to residential mortgage servicers, or other property
valuation opinion methodology customarily used by residential mortgage
servicers with respect to defaulted loans and (y) the unpaid principal
balance of each Mortgage Loan related to any REO Property, (C) any costs
and damages incurred by the Trust Fund as a result of violation of any
applicable federal, state or local predatory or abusive lending law in
connection with the origination of any Mortgage Loan and (D) any Swap
Termination Payment payable to the Swap Counterparty as a result of a
termination pursuant to this Section 9.1. In addition, such purchase
price shall include with respect to the Mortgage Loans (including REO
Properties) accrued and unpaid interest thereon, as determined by the
Servicer, at the applicable Mortgage Rate, except to the extent the
Servicer was not or would not be required to make an Advance hereunder,
and any and all amounts payable or reimbursable to the Servicer and/or
the Trustee pursuant to the provisions of this Agreement; and

     (ii) the later of (A) the maturity or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund and the disposition of all REO Property and (B) the
distribution to Certificateholders and the Swap Counterparty of all
amounts required to be distributed to them pursuant to this Agreement.
In no event shall the trusts created hereby continue beyond the earlier
of (i) the expiration of 21 years from the death of the survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United
States to the Court of St. James’s, living on the date hereof, and (ii)
the Latest Possible Maturity Date.

     The right to purchase all Mortgage Loans and REO Properties pursuant to
clause (i) above shall be conditioned upon the Pool Balance, at the time of any
such repurchase, aggregating less than ten percent of the Cut-off Date Balance.

     If the Majority Class X Certificateholders fail to exercise their option
to purchase the Mortgage Loans on the first Distribution Date on which they are
entitled to do so, the NIMS Insurer, if any, so long as either the NIM Securities remain outstanding
and are covered by the NIMS Insurer’s, if any, guaranty or if the NIMS Insurer,
if any, is owed amounts in respect of its

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guaranty of the NIM Securities, may exercise such option. In
addition, at any time after the Pool Balance aggregates less than ten percent
of the Cut-off Date Balance, provided that the NIM Securities are no longer
outstanding, the Servicer may notify the Majority Class X Certificateholders in
writing that the Servicer intends to purchase all of the Mortgage Loans and REO
Properties for the purchase price specified in clause (i) above. If the
Majority Class X Certificateholders do not exercise their option to purchase
the Mortgage Loans and REO Properties as provided in this Section within 30
days following receipt of such notice, the Servicer may effect such purchase.

     Each of the Majority Class X Certificateholders and the NIMS Insurer, if
any, has agreed, and the Servicer hereby agrees, not to cause the liquidation
of the Trust Fund pursuant to this Section 9.1(a) so long as any NIM Securities
remain outstanding.

     (b) With respect to any purchase pursuant to subsection (a), upon deposit
of the price determined pursuant to subsection (a)(i) in the Distribution
Account, the Trustee or the Custodian on its behalf shall release or cause to
be released to the purchaser of each such Mortgage Loan the related Mortgage
File and shall execute and deliver such instruments of transfer or assignment
prepared by the purchaser of such Mortgage Loan (including appropriate
instruments with respect to any REO Property), in each case without recourse,
as shall be necessary to vest in the purchaser of such Mortgage Loan any
Mortgage Loan sold pursuant hereto, and the purchaser of such Mortgage Loan
shall succeed to all the Trustee’s right, title and interest in and to such
Mortgage Loan and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. The purchaser of such
Mortgage Loan shall thereupon own such Mortgage Loan, and all security and
documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.

     Section 9.2 Final Distribution on the Certificates.

     If on any Determination Date the Trustee determines that there are no
outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Account, the Trustee shall promptly send a
final distribution notice to each Certificateholder and the NIMS Insurer, if
any. If the Majority Class X Certificateholders or the NIMS Insurer, if any,
elect to terminate the Trust Fund pursuant to clause (a)(i) of Section 9.1, at
least 20 days prior to the date notice is to be mailed to the affected
Certificateholders, the Majority Class X Certificateholders shall notify the
Depositor and the Trustee of the date the Majority Class X Certificateholders
intend to terminate the Trust Fund and of the applicable repurchase price of
the Mortgage Loans and REO Properties.

     Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee by letter to Certificateholders and the NIMS Insurer, if any, mailed
not earlier than the 10th day and no later than the 15th day of the month next
preceding the month of such final distribution. Any such notice shall specify
(a) the Distribution Date upon which final distribution on the Certificates
will be made upon presentation and surrender of Certificates at the office
therein designated, (b) the amount of such final distribution, (c) the location
of the office or agency at which such presentation and surrender must be made,
and (d) that the Record Date otherwise applicable to such Distribution

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Date is not applicable, distributions being made only upon presentation
and surrender of the Certificates at the office therein specified. The Trustee
will give such notice to each Rating Agency at the time such notice is given to
Certificateholders.

     In the event such notice is given, the Trustee shall cause all funds in
the Collection Account to be remitted to the Trustee for deposit in the
Distribution Account on the Business Day prior to the applicable Distribution
Date in an amount equal to the sum of the final distribution in respect of the
Certificates and any Swap Termination Payment owed to the Swap Counterparty (to
the extent not paid on previous Distribution Dates). Upon such final deposit
with respect to the Trust Fund and the receipt by the Trustee of a Request for
Release therefor, the Trustee shall promptly release to the majority Class X
Certificateholders, the NIMS Insurer, if any, or the Servicer, as applicable,
the Mortgage Files for the Mortgage Loans.

     Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in the order
set forth in Section 4.2 hereof, on the final Distribution Date, in the case of
the Certificateholders, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, an amount equal to (i) as
to each Class of Regular Certificates, the Certificate Balance thereof plus
accrued interest thereon (or on their Notional Amount, if applicable) in the
case of an interest bearing Certificate, and (ii) as to the Residual
Certificates, the amount, if any, which remains on deposit in the Distribution
Account (other than the amounts retained to meet claims) after application
pursuant to clause (i) above.

     In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above-mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within six months after the second notice all the applicable Certificates shall
not have been surrendered for cancellation, the Trustee may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets which remain a
part of the Trust Fund. If within one year after the second notice all
Certificates shall not have been surrendered for cancellation, the holder of
each of the Class R Certificates shall be entitled to all unclaimed funds and
other assets of the REMICs held for distribution to such Certificateholders,
which remain subject hereto.

     Section 9.3 Additional Termination Requirements.

     (a) In the event the Majority Class X Certificateholders exercise their
purchase option or the Servicer exercises its purchase option, each as provided
in Section 9.1, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee and the NIMS Insurer, if
any, have been supplied with an Opinion of Counsel, at the expense of the
Trustee, to the effect that the failure to comply with the requirements of this
Section 9.3 will not result in an adverse REMIC Event:

     (i) The Trustee shall sell all of the assets that constitute the
Trust Fund for cash as provided in Section 9.1(a)(i), and, within 90 days
of such sale (such period the

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“90-day liquidation period”), shall distribute to (or credit to the
account of) the Holders of the Certificates the proceeds of such sale
together with other cash on hand (less amounts retained to meet claims)
in complete liquidation of the Trust Fund and each REMIC created
hereunder; and

     (ii) The Trustee shall attach a statement to the final federal
income tax return for each REMIC created hereunder stating that pursuant
to Treasury Regulation § 1.860F-1, the first day of the 90-day
liquidation period for each such REMIC was the date on which the Trustee
sold the assets of the Trust Fund pursuant to Section 9.1(a)(i).

     (b) Notwithstanding anything herein to the contrary, the portion of the
purchase price required to be paid by Section 9.1(a)(i) that is contained in
clause (D) thereof shall not be paid to any REMIC formed hereby. Instead, such
amount shall be paid by the purchaser directly to the holder of the Class X
Certificates pursuant to a cash settled option contract. As a result, such
amount shall not be paid to any REMIC or distributed by any REMIC.

     (c) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Trustee to undertake the above-described actions.

ARTICLE X

MISCELLANEOUS PROVISIONS

     Section 10.1 Amendment.

     This Agreement may be amended from time to time by the Depositor, the
Seller, the Servicer, the Credit Risk Manager and the Trustee without the
consent of any of the Certificateholders, the NIMS Insurer, if any, or the Swap
Counterparty (i) to cure any ambiguity or mistake, (ii) to cause the provisions
herein to conform to or be consistent with or in furtherance of the statements
made with respect to the Certificates, the Trust Fund or this Agreement in any
disclosure document pursuant to which any Certificates were offered; to correct
any defective provision herein or to supplement any provision herein which may
be inconsistent with any other provision herein, (iii) to add, with such
Person’s consent, to the duties of the Depositor, the Seller, the Servicer, the
Credit Risk Manager or the Trustee, (iv) to add any other provisions with
respect to matters or questions arising hereunder, (v) to modify, alter, amend,
add to or rescind any of the terms or provisions contained in this Agreement or
(vi) to comply with any rules promulgated by the Commission; provided that any
action pursuant to clauses (iv) or (v) above shall not, as evidenced by an
Opinion of Counsel addressed and delivered to the Trustee and the NIMS Insurer,
if any, and the Swap Counterparty (which Opinion of Counsel shall not be an
expense of the Trustee or the Trust Fund), adversely affect in any material
respect the interests of any Certificateholder, the NIMS Insurer, if any, or
the Swap Counterparty; provided, however, that the amendment shall not be
deemed to adversely affect in any material respect the interests of the
Certificateholders or the NIMS Insurer, if any, if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings
then assigned to the Certificates; it being understood and agreed that any such
letter in and of itself will not represent a determination as to the
materiality of any such amendment and will represent

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a determination only as to the credit issues affecting any such rating.
The Depositor, the Seller, the Servicer, the Credit Risk Manager and the
Trustee also may at any time and from time to time amend this Agreement without
the consent of the Certificateholders, the NIMS Insurer, if any, or the Swap
Counterparty, to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of
each REMIC created hereunder as a REMIC under the Code, (ii) avoid or minimize
the risk of the imposition of any tax on any such REMIC pursuant to the Code
that would be a claim at any time prior to the final redemption of the
Certificates or (iii) comply with any other requirements of the Code, provided
that the Trustee has been provided an Opinion of Counsel, which opinion shall
be an expense of the party requesting such opinion but in any case shall not be
an expense of the Trustee or the Trust Fund, to the effect that such action is
necessary or helpful to, as applicable, (i) maintain such qualification, (ii)
avoid or minimize the risk of the imposition of such a tax or (iii) comply with
any such requirements of the Code.

     This Agreement may also be amended from time to time by the Depositor, the
Seller, the Servicer, the Credit Risk Manager and the Trustee with the consent
of the NIMS Insurer, if any, the Swap Counterparty and the Holders of a
Majority in Interest of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments required to be distributed on any Certificate without the consent of
the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other
than as described in (i), without the consent of the Holders of Certificates of
such Class evidencing, as to such Class, Percentage Interests aggregating 66%,
or (iii) reduce the aforesaid percentages of Certificates the Holders of which
are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then outstanding.

     Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall not be an expense of the
Trustee or the Trust Fund, to the effect that such amendment will not cause an
Adverse REMIC Event.

     Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the NIMS Insurer, if any, and the Swap
Counterparty, the Trustee shall furnish written notification of the substance
or a copy of such amendment to each Certificateholder and each Rating Agency.

     It shall not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner
of obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations
as the Trustee may prescribe.

     Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund), satisfactory to the Trustee and
the NIMS Insurer, if any, that (i) such amendment is

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permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.1.

     Section 10.2 Recordation of Agreement; Counterparts.

     This 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 Trustee at its expense, but only upon
direction by the NIMS Insurer, if any, or by a majority of the
Certificateholders to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders or the NIMS
Insurer, if any. However, the foregoing sentence notwithstanding, the Servicer
may provide copies hereof to counsel, judicial officers and government
agencies, or may cause this Agreement to be recorded, in any jurisdiction in
which, in the Servicer’s judgment, such disclosure or recording may facilitate
foreclosure or other recovery with respect to any one or more of the Mortgage
Loans.

     For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed (by
facsimile or otherwise) simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.

     Section 10.3 Governing Law.

     THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CONFLICTS
OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS))
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO, THE
CERTIFICATEHOLDERS AND THE NIMS INSURER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.

     Section 10.4 Intention of Parties.

     It is the express intent of the Seller and the Depositor that the
conveyance of the Trust Fund by the Depositor to the Trustee be, and be
construed as, absolute sales thereof to the Trustee. It is, further, not the
intention of the parties that such conveyances be deemed a pledge thereof by
the Depositor to the Trustee. However, in the event that, notwithstanding the
intent of such parties, such assets are held to be the property of the
Depositor, or if for any other reason this Agreement is held or deemed to
create a security interest in such assets, then (i) this Agreement shall be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York and (ii) the conveyance provided for in this
Agreement shall be deemed to be an assignment and a grant by the Depositor to
the Trustee, for

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the benefit of the Certificateholders and the NIMS Insurer, if any, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.

     The Depositor, for the benefit of the Certificateholders, shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Trust Fund, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such
throughout the term of the Agreement. The Depositor shall arrange for filing
any Uniform Commercial Code continuation statements in connection with any
security interest granted or assigned to the Trustee for the benefit of the
Certificateholders and the NIMS Insurer, if any.

     Section 10.5 Notices.

     (a) The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency, the NIMS Insurer, if any, and the Swap Counterparty with
respect to each of the following of which it has actual knowledge:

     (i) any material change or amendment to this Agreement;

     (ii) the occurrence of any Event of Default that has not been cured;

     (iii) the resignation or termination of the Servicer or the Trustee
and the appointment of any successor;

     (iv) the repurchase or substitution of Mortgage Loans pursuant to
Section 2.3 hereof;

     (v) the final payment to Certificateholders; and

     (vi) any rating action involving the long-term credit rating of the
Trustee, which notice shall be made by first-class mail within two
Business Days after the Trustee gains actual knowledge thereof.

     In addition, the Trustee shall promptly furnish to each Rating Agency, the
NIMS Insurer, if any, and the Swap Counterparty copies of the following:

     (i) Each report to Certificateholders described in Section 4.5
hereof;

     (ii) Upon request, each annual statement as to compliance described
in Section 3.16 hereof;

     (iii) Upon request, each annual Independent public accountants’
servicing report described in Section 3.17 hereof; and

     (iv) Any notice of a purchase of a Mortgage Loan pursuant to Section
2.2, 2.3 or 3.11 hereof.

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     (b) All directions, demands, authorizations, consents, waivers,
communications and notices hereunder shall be in writing and shall be deemed to
have been duly given when delivered by first class mail, facsimile or courier
to the applicable Notice Address. Notices to Certificateholders shall be
deemed given when mailed, first class postage prepaid, to their respective
addresses appearing in the Certificate Register.

     Section 10.6 Severability of Provisions.

     If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.

     Section 10.7 Assignment.

     Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.2, this Agreement may not be assigned by the Servicer
without the prior written consent of the Trustee, the Depositor and any NIMS
Insurer.

     Section 10.8 Limitation on Rights of Certificateholders.

     The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder’s legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.

     No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of
an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.

     No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless
such Holder previously shall have given to the Trustee and the NIMS Insurer, if
any, a written notice of an Event of Default and of the continuance thereof, as
herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall, with the
prior written consent of the NIMS Insurer, if any, also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by each Certificateholder with

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every other Certificateholder and the Trustee, that no one or more Holders
of Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of the Certificates
or the NIMS Insurer, if any, or to obtain or seek to obtain priority over or
preference to any other such Holder or the NIMS Insurer, if any, or to enforce
any right under this Agreement, except in the manner herein provided and for
the common benefit of all Certificateholders and the NIMS Insurer, if any. For
the protection and enforcement of the provisions of this Section 10.8, each and
every Certificateholder, the NIMS Insurer, if any, and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

     Section 10.9 Inspection and Audit Rights.

     The Servicer agrees that, on five Business Days’ prior notice, it will
permit and will cause each subservicer to permit any representative of the
Depositor, the Trustee or the NIMS Insurer, if any, during the Servicer’s
normal business hours, to examine all the books of account, records, reports
and other papers of the Servicer relating to the Mortgage Loans, to make copies
and extracts therefrom, to cause such books to be audited by independent
certified public accountants selected by the Depositor, the Trustee or the NIMS
Insurer, if any, and to discuss its affairs, finances and accounts relating to
the Mortgage Loans with its officers, employees and independent public
accountants (and by this provision the Trustee hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the
Depositor, the Trustee or the NIMS Insurer, if any, of any right under this
Section 10.9 shall be borne by the party requesting such inspection (which, in
the case of all reasonable out-of-pocket expenses of the Trustee, shall be
reimbursable to the Trustee from funds then on deposit in the Distribution
Account); all other such expenses shall be borne by the Servicer or the related
subservicer. The party requesting such inspection agrees to hold all such
information in confidence and shall not disclose such information without the
consent of the servicer (unless required by law or a court of applicable
jurisdiction).

     Section 10.10 Certificates Nonassessable and Fully Paid.

     It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof
by the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

     Section 10.11 Limitations on Actions; No Proceedings.

     (a) Other than pursuant to this Agreement, or in connection with or
incidental to the provisions or purposes of this Agreement, the trust created
hereunder shall not (i) issue debt or otherwise borrow money, (ii) merge or
consolidate with any other entity reorganize, liquidate or transfer all or
substantially all of its assets to any other entity, or (iii) otherwise engage
in any activity or exercise any power not provided for in this Agreement.

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     (b) Notwithstanding any prior termination of this Agreement, the Trustee,
the Servicer, the Seller, the Credit Risk Manager and the Depositor shall not,
prior to the date which is one year and one day after the termination of this
Agreement, acquiesce, petition or otherwise invoke or cause any Person to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Depositor or the Trust Fund under
any federal or state bankruptcy, insolvency or other similar law or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Depositor or the Trust Fund or any substantial part of
their respective property, or ordering the winding up or liquidation of the
affairs of the Depositor or the Trust Fund.

     Section 10.12 Mortgage Data.

     The Depositor hereby represents to S&P that, to the Depositor’s knowledge,
the information provided to such Rating Agency, including any loan level
detail, is true and correct according to such Rating Agency’s requirements.

     Section 10.13 Benefits of Agreement; Additional Rights of NIMS
Insurer. 

     (a) The NIMS Insurer, if any, shall be deemed a third-party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement. Nothing in this
Agreement or in the Certificates, express or implied, shall give to any Person,
other than the parties to this Agreement and their successors hereunder, the
Holders of the Certificates and the NIMS Insurer, if any, any benefit or any
legal or equitable right, power, remedy or claim under this Agreement.

     (b) Each party to this Agreement and any agent thereof and any successor
thereto shall furnish to the NIMS Insurer a copy of any notice, direction,
demand, opinion, schedule, list, certificate, report, statement, filing,
information, data or other communication provided by it or on its behalf to any
other Person pursuant to this Agreement at the same time, in the same form and
in the same manner as such communication is so provided and shall address or
cause such communication to be addressed to the NIMS Insurer, if any, in
addition to any other addressee thereof. The Servicer shall cause the NIMS
Insurer, if any, to be an addressee of any report furnished pursuant to this
Agreement.

     (c) Wherever in this Agreement there shall be a requirement that there be
no downgrade, reduction, withdrawal or qualification of or other effect on the
rating of any Class of Certificates by any Rating Agency as of any date, there
also shall be deemed to be a requirement that there be no such effect on any
class of notes issued pursuant to the Indenture and guaranteed by the NIMS
Insurer, if any, as of such date. In addition, unless there exists a
continuance of any failure by the NIMS Insurer, if any, to make a required
payment under the policy insuring the NIM Securities, if any (such event a
“NIMS Insurer Default”), wherever in this Agreement there shall be a
requirement that any Person or any communication, object or other matter be
acceptable or satisfactory to or otherwise receive the consent or other
approval of any other Person (whether as a condition to the eligibility of such
Person to act in any capacity, as a condition to any circumstance or state of
affairs related to such matter, or otherwise), there also
shall be deemed to be a requirement that such Person or matte be approved
in writing by the NIMS Insurer, if any, which approval shall not be
unreasonably withheld or delayed.

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*   *    *

140

 

     IN WITNESS WHEREOF, the Depositor, the Seller, the Servicer, the Credit
Risk Manager and the Trustee, have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year
first above written.

	 	 	 	 	 
	 	AEGIS ASSET BACKED SECURITIES CORPORATION,

as Depositor

 	 
	 	By:  	 /s/ Stuart D. Marvin	 
	 	 	Name:  	Stuart D. Marvin 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	AEGIS MORTGAGE CORPORATION,

as Seller

 	 
	 	By:  	 /s/ Stuart D. Marvin	 
	 	 	Name:  	Stuart D. Marvin 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 
	 	CHASE MANHATTAN MORTGAGE CORPORATION,

as Servicer

 	 
	 	By:  	 /s/
Susan C. Johnson	 
	 	 	Name:  	Susan C. Johnson	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as Trustee

 	 
	 	By:  	 /s/ Stacey Taylor	 
	 	 	Name:  	Stacey Taylor 	 
	 	 	Title:  	Assistant Vice President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	THE MURRAYHILL COMPANY,

as Credit Risk Manager

 	 
	 	By:  	 /s/ Kevin J. Kanouff	 
	 	 	Name:  	Kevin J. Kanouff 	 
	 	 	Title:  	President and General Counsel 	 

 

 

	 	 	 	 	 

Schedule I

MORTGAGE LOAN SCHEDULE

I-1

 

EXHIBIT A

FORMS OF CERTIFICATES

A-1

 

EXHIBIT B

[Reserved]

B-1

 

EXHIBIT C

FORM OF INITIAL CERTIFICATION OF CUSTODIAN

_______________ __, 2004

Aegis Asset Backed Securities Corporation

3250 Briarpark, Suite 400

Houston, Texas 77042

Attention: Secondary Marketing

Aegis Mortgage Corporation, as Seller

3250 Briarpark, Suite 400

Houston, Texas 77042

Attention: Secondary Marketing

Chase Manhattan Mortgage Corporation

343 Thornall Street

Edison, New Jersey 08837

Attention: General Counsel

[NIMS Insurer, if any]

AEGIS ASSET BACKED SECURITIES TRUST

MORTGAGE PASS-THROUGH CERTIFICATES,

SERIES 2004-3

Ladies and Gentlemen:

     In accordance with Section 2.2 of the Pooling and Servicing Agreement
dated as of June 1, 2004, among Aegis Asset Backed Securities Corporation, as
Depositor, Aegis Mortgage Corporation, as Seller, Chase Manhattan Mortgage
Corporation, as Servicer, The Murrayhill Company, as Credit Risk Manager and
Wells Fargo Bank, N.A., as Trustee, the Custodian hereby certifies that it has
received and is holding a Mortgage File with respect to each Mortgage Loan
(other than any Mortgage Loan listed on the schedule of exceptions attached
hereto) listed on Schedule I (a copy of which is attached hereto) to the
Pooling and Servicing Agreement.

     In connection therewith, the Custodian has examined each Mortgage File to
confirm that:

     (i) each Note (or, if applicable, a lost note affidavit) required to be
included in the Mortgage File is in its possession; and

     (ii) the name of the related borrower set forth on each Note (or, if
applicable, a lost note affidavit) required to be included on the Mortgage File
is identical to the name of the related borrower set forth on the Mortgage Loan
Schedule.

C-1

 

     The Custodian further certifies that the Custodian’s initial review of
each Mortgage File included each of the procedures relevant to an initial
review set forth in Section 2.2 of the Pooling and Servicing Agreement.

     The Custodian has not (i) inspected, reviewed or examined any such
documents, instruments, securities or other papers to determine that they or
the signatures thereon are genuine, enforceable, or appropriate for the
represented purpose, any such documents, instruments, securities or other
papers have actually been recorded or that any document that appears to be an
original is in fact an original, or (ii) determined whether any Mortgage File
should include any surety or guaranty, Note Assumption Rider, buydown
agreement, assumption agreement, modification agreement, written assurance or
substitution agreement.

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.,

as Custodian

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

C-2

 

	 	 	 	 	 

EXHIBIT D

FORM OF FINAL CERTIFICATION OF CUSTODIAN

_____________ __, 2004

Aegis Asset Backed Securities Corporation

3250 Briarpark, Suite 400

Houston, Texas 77042

Attention: Secondary Marketing

Aegis Mortgage Corporation, as Seller

3250 Briarpark, Suite 400

Houston, Texas 77042

Attention: Secondary Marketing

Chase Manhattan Mortgage Corporation

343 Thornall Street

Edison, New Jersey 08837

Attention: General Counsel

[NIMS Insurer, if any]

AEGIS ASSET BACKED SECURITIES TRUST

MORTGAGE PASS-THROUGH CERTIFICATES,

SERIES 2004-3

Ladies and Gentlemen:

     In accordance with Section 2.2 of the Pooling and Servicing Agreement
dated as of June 1, 2004, among Aegis Asset Backed Securities Corporation, as
Depositor, Aegis Mortgage Corporation, as Trustee, Chase Manhattan Mortgage
Corporation, as Servicer, The Murrayhill Company, as Credit Risk Manager, Aegis
Mortgage Corporation, as Seller and Wells Fargo Bank, N.A., as Trustee, the
Custodian hereby certifies that it has received and is holding a Mortgage File
with respect to each Mortgage Loan (other than any Mortgage Loan listed on the
schedule of exceptions attached hereto) listed on Schedule I (a copy of which
is attached hereto) to the Pooling and Servicing Agreement.

     In connection therewith, the Custodian has examined each Mortgage File to
confirm that:

     (i) each Note required to be included in the Mortgage File is in its
possession;

D-1

 

     (ii) the name of the related borrower set forth on each Note (or, if
applicable, a lost note affidavit) required to be included on the
Mortgage File is identical to the name of the related borrower set forth
on the Mortgage Loan Schedule;

     (iii) all documents required to be contained in the Mortgage File
are in its possession;

     (iv) such documents have been reviewed by it and appear to relate to
such Mortgage Loan and are not torn or mutilated; and

     (v) based on its examination and only as to the foregoing documents,
the mortgage information set forth on the Mortgage Loan Schedule
accurately reflects information set forth in the Mortgage File and each
balance listed as the “Original Balance” on Schedule I to the Pooling and
Servicing Agreement is identical to the original principal amount of the
corresponding Note (or, if applicable, the amount set forth in a lost
note affidavit).

     The Custodian further certifies that the Custodian’s final review of each
Mortgage File included each of the procedures relevant to the final review set
forth in Section 2.2 of the Pooling and Servicing Agreement.

     The Custodian has not (i) inspected, reviewed or examined any such
documents, instruments, securities or other papers to determine that they or
the signatures thereon are genuine, enforceable, or appropriate for the
represented purpose, any such documents, instruments, securities or other
papers have actually been recorded or that any document that appears to be an
original is in fact an original, or (ii) determined whether any Mortgage File
should include any surety or guaranty, Note Assumption Rider, buydown
agreement, assumption agreement, modification agreement, written assurance or
substitution agreement.

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.,

as Custodian

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

D-2

 

	 	 	 	 	 

EXHIBIT E-1

FORM OF RESIDUAL TRANSFER AFFIDAVIT (TRANSFEROR)

PURSUANT TO SECTIONS 860D(a)(6)(A) and 860E(e)(4)

OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED

	 	 	 
	Re:

	 	Aegis Asset Backed Securities Trust

Mortgage Pass-Through Certificates, Series 2004-3, Class R

	 	 	 	 	 
	STATE OF [ _____________ ]

	 	 	)	 
	

	 	 	)	ss:  
	COUNTY/CITY OF [ ____________ ]

	 	 	)	 

     This letter is delivered to you in connection with the sale
by            (the “Seller”) to             (the “Purchaser”) of             %
Percentage Interest of Aegis Asset Backed Securities Trust Mortgage
Pass-Through Certificates, Series 2004-3, Class R (the “Certificate”), pursuant
to Section 5.2(c) of the Pooling and Servicing Agreement (the “Pooling and
Servicing Agreement”) dated as of June 1, 2004, among Aegis Asset Backed
Securities Corporation, as Depositor, Aegis Mortgage Corporation, as Seller,
Chase Manhattan Mortgage Corporation, as Servicer, The Murrayhill Company, as
Credit Risk Manager, and Wells Fargo Bank, N.A., as Trustee. All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with the Depositor and the Trustee that:

     1. No purpose of the Seller relating to the sale of the Certificate
by the Seller to the Purchaser is or will be to enable the Seller to
impede the assessment or collection of tax.

     2. The Seller understands that the Purchaser has delivered to the
Trustee and the Depositor a transferee affidavit and agreement in the
form attached to the Pooling and Servicing Agreement as Exhibit E-2. The
Seller does not know or believe that any representation contained therein
is false.

     3. The Seller has no actual knowledge that the Purchaser is not a
Permitted Transferee.

     4. The Seller has no actual knowledge that the Purchaser would be
unwilling or unable to pay taxes due on its share of the taxable income
attributable to the Certificates.

     5. At the time of this transfer (I) the Seller has conducted a
reasonable investigation of the financial condition of the Purchaser and,
as a result of the investigation, found that the Purchaser has
historically paid its debts as they came due, and found no significant
evidence to indicate that the Purchaser will not continue to pay its
debts as they come due in the future, (II) the Purchaser represents that
it will not cause

E-1-1

 

income from the Certificates to be attributable to a foreign
permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of the Purchaser or another U.S. Person and
(III) either (A) the Seller both (1) has determined all of the following:
(i) at the time of the transfer, and at the close of each of the
Purchaser’s two fiscal years preceding the year of transfer, the
Purchaser’s gross assets for financial reporting purposes exceed $100
million and its net assets for such purposes exceed $10 million
(disregarding, for purposes of determining gross or net assets, the
obligation of any person related to the Purchaser within the meaning of
section 860L(g) of the Code or any other asset if a principal purpose for
holding or acquiring that asset is to permit the Purchaser to satisfy
this minimum gross asset or net asset requirement), (ii) the Purchaser is
a domestic C corporation for United States federal income tax purposes
that is not for such purposes an exempt corporation, a regulated
investment company, a real estate investment trust, a REMIC, or a
cooperative organization to which part I of subchapter T of the Code
applies, (iii) there are no facts or circumstances on or before the date
of transfer (or anticipated) which would reasonably indicate that the
taxes associated with the Certificates will not be paid, (iv) the
Purchaser is not a foreign branch of a domestic corporation, and (v) the
transfer does not involve a transfer or assignment to a foreign branch of
a domestic corporation (or any other arrangement by which any Certificate
is at any time subject to net tax by a foreign country or U.S.
possession) and the Purchaser will not hereafter engage in any such
transfer or assignment (or any such arrangement), and (2) does not know
or have reason to know that the Purchaser will not honor the restrictions
on subsequent transfers of any Class R Certificate described in paragraph
12 of the Transferee Affidavit, or (B) the Seller has determined that the
present value of the anticipated tax liabilities associated with the
holding of the Certificates does not exceed the sum of (1) the present
value of any consideration given to the Purchaser to acquire the
Certificates, (2) the present value of the expected future distributions
on the Certificates, and (3) the present value of the anticipated tax
savings associated with holding the Certificates as the REMIC generates
losses (having made such determination by (I) assuming that the Purchaser
pays tax at a rate equal to the highest rate of tax specified in Section
11(b)(1) of the Code (provided that, if the Purchaser has been subject to
the alternative minimum tax under Section 55 of the Code in the preceding
two years and will compute its taxable income in the current taxable year
using the alternative minimum tax rate, then the Purchaser may use the
tax rate specified in Section 55(b)(1)(B) of the Code), and (II)
utilizing a discount rate for present valuation purposes equal to the
Federal short-term rate prescribed by Section 1274(d) of the Code.

     6. The Purchaser has represented to the Seller that, if the
Certificates constitute a non-economic residual interest, it (i)
understands that as holder of a non-economic residual interest it may
incur tax liabilities in excess of any cash flows generated by the
interest, and (ii) intends to pay taxes associated with its holding of
the Certificates as they become due.

     The Seller understands that the transfer of the Certificates may not be
respected for United States income tax purposes (and the Seller may continue to
be liable for United States income taxes associated therewith) unless there is
compliance with the standards of paragraph 5 above as to any transfer.

E-1-2

 

     We agree to indemnify the Depositor, the Servicer and the Trustee against
any liability that may result if we sell or transfer a Residual Certificate to
a purchaser or transferee who does not comply with any conditions for transfer
set forth in the Pooling and Servicing Agreement.

E-1-3

 

     IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed by its duly authorized representative as of the [   ] day of [  ]  200[  ].

	 	 	 	 	 
	 	[NAME OF TRANSFEROR]

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

     Personally appeared before me [              ], known or proved to
me to be the same person who executed the foregoing instrument and to be a
[              ] of the Seller, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.

     Subscribed and sworn before me this [         ] day of [           ] 200[  ].

Notary Public

My commission expires the
[        ] day of
[         ]
200[    ].

E-1-4

 

EXHIBIT E-2

FORM OF RESIDUAL TRANSFER AFFIDAVIT (TRANSFEREE)

	 	 	 	 	 
	STATE OF [            ]

	 	 	)	 
	

	 	 	)	ss: 
	COUNTY/CITY OF [            ]

	 	 	)	 

     [NAME OF OFFICER],             being first duly sworn, deposes and
says:

     1. That he [she] is [title of officer]               of
[name of Purchaser]             (the
“Purchaser”), a             [description of type of entity]
duly organized and existing under the laws of the [State of             ]
[United States], on behalf of which he [she] makes this affidavit.

     2. That the Purchaser’s Taxpayer Identification Number is [     
].

     3. That the Purchaser is not a “disqualified organization” within
the meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986,
as amended (the “Code”) and will not be a “disqualified organization” as
of [date of transfer], and that the Purchaser is not acquiring a Residual
Certificate (as defined in the Pooling and Servicing Agreement) for the
account of, or as agent (including a broker, nominee, or other middleman)
for, any person or entity from which it has not received an affidavit
substantially in the form of this affidavit. For these purposes, a
“disqualified organization” means the United States, any state or
political subdivision thereof, any foreign government, any international
organization, any agency or instrumentality of any of the foregoing
(other than an instrumentality if all of its activities are subject to
tax and a majority of its board of directors is not selected by such
governmental entity), any cooperative organization furnishing electric
energy or providing telephone service to persons in rural areas as
described in Code Section 1381(a)(2)(C), any “electing large partnership”
within the meaning of Section 775 of the Code, or any organization (other
than a farmers’ cooperative described in Code Section 521) that is exempt
from federal income tax unless such organization is subject to the tax on
unrelated business income imposed by Code Section 511.

     4. The Purchaser either (a) is not, and on             [date of
transfer] will not be, an employee benefit plan or other retirement
arrangement subject to Section 406 of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Code
(collectively, a “Plan”) or a person acting on behalf of any such Plan or
investing the assets of any such Plan to acquire the Residual
Certificate; (b) if the Residual Certificate has been the subject of an
ERISA-Qualifying Underwriting, is an insurance company that is purchasing
the Certificate with funds contained in an “insurance company general
account” as defined in Section V(e) of Prohibited Transaction Class
Exemption (“PTCE”) 95-60 and the purchase and holding of the

E-2-1

 

Residual Certificate are covered under Section I and III of PTCE
95-60; or (c) herewith delivers to the Trustee an opinion of counsel
satisfactory to the Trustee, to the effect that the purchase or holding
of such Residual Certificate by the Investor will not constitute or
result in any non-exempt prohibited transactions under Section 406 of
ERISA or Section 4975 of the Code and will not subject the Trustee, the
Depositor, the Seller, the Servicer, or the NIMS Insurer, if any, to any
obligation in addition to those undertaken by such entities in the
Pooling and Servicing Agreement, which opinion of counsel shall not be an
expense of the Trust Fund or any of the above parties.

     5. That the Purchaser hereby acknowledges that under the terms of
the Pooling and Servicing Agreement dated as of June 1, 2004 (the
“Pooling and Servicing Agreement”), by and among Aegis Asset Backed
Securities Corporation, as Depositor, Aegis Mortgage Corporation, as
Seller, Chase Manhattan Mortgage Corporation, as Servicer, The Murrayhill
Company, as Credit Risk Manager, and Wells Fargo Bank, N.A., as Trustee,
with respect to Aegis Asset Backed Securities Trust Mortgage Pass-Through
Certificates, Series 2004-3 no transfer of the Residual Certificates
shall be permitted to be made to any person unless the Trustee has
received a certificate from such transferee containing the
representations in paragraphs 3 and 4 hereof.

     6. That the Purchaser does not hold REMIC residual securities as
nominee to facilitate the clearance and settlement of such securities
through electronic book-entry changes in accounts of participating
organizations (such entity, a “Book-Entry Nominee”).

     7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes legally
required to be paid with respect to such Residual Certificate.

     8. That the Purchaser will not transfer a Residual Certificate to
any person or entity (i) as to which the Purchaser has actual knowledge
that the requirements set forth in paragraph 3, paragraph 6 or paragraph
10 hereof are not satisfied or that the Purchaser has reason to believe
does not satisfy the requirements set forth in paragraph 7 hereof, and
(ii) without obtaining from the prospective Purchaser an affidavit
substantially in this form and providing to the Trustee a written
statement substantially in the form of Exhibit C to the Pooling and
Servicing Agreement.

     9. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of any
cash flows generated by the interest and that it intends to pay taxes
associated with holding such Residual Certificate as they become due.

     10. That (I) the Purchaser (i) is not a Non-U.S. Person, (ii) is a
Non-U.S. Person that holds a Residual Certificate in connection with the
conduct of a trade or business within the United States and has furnished
the transferor and the Trustee with an effective Internal Revenue Service
Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption From
Withholding on Income Effectively Connected With the Conduct of a Trade
or Business in the United States) or successor form at the time and in
the manner

E-2-2

 

required by the Code or (iii) is a Non-U.S. Person that has
delivered to the transferor, the Trustee an opinion of a nationally
recognized tax counsel to the effect that the transfer of such Residual
Certificate to it is in accordance with the requirements of the Code and
the regulations promulgated thereunder and that such transfer of a
Residual Certificate will not be disregarded for federal income tax
purposes and (II) if Purchaser is a partnership for U.S. federal income
tax purposes, each person or entity that holds an interest (directly, or
indirectly through a pass-through entity) is a person or entity described
in (I). “Non-U.S. Person” means any person other than a “United States
person” within the meaning of Section 7701(a)(30) of the Code.

     11. The Purchaser will not cause income from the Residual
Certificate to be attributable to a foreign permanent establishment or
fixed base of the Purchaser or another U.S. taxpayer.

     12. The Purchaser will, in connection with any transfer that it
makes of a Class R Certificate deliver to the Certificate Registrar a
representation letter substantially in the form of Exhibit N to the
Pooling and Servicing Agreement. [The Purchaser hereby agrees that it
will not make any transfer of any Class R Certificate unless (i) the
transfer is to an entity which is a domestic C corporation (other than an
exempt corporation, a regulated investment company, a real estate
investment trust, a REMIC, or a cooperative organization to which part I
of Subchapter T of the Code applies) for federal income tax purposes, and
(ii) the transfer is in compliance with the conditions set forth in
paragraph 5 of Exhibit N of the Pooling and Servicing Agreement.]1

     [13. The Purchaser hereby represents to and for the benefit of the
transferor that (i) at the time of the transfer, and at the close of each
of the Purchaser’s two fiscal years preceding the year of transfer, the
Purchaser’s gross assets for financial reporting purposes exceed $100
million and its net assets for such purposes exceed $10 million
(disregarding, for purposes of determining gross or net assets, the
obligation of any person related to the Purchaser within the meaning of
section 860L(g) of the Code or any other asset if a principal purpose for
holding or acquiring that asset is to permit the Purchaser to satisfy
this minimum gross asset or net asset requirement), (ii) the Purchaser is
a domestic C corporation for United States federal income tax purposes
that is not for such purposes an exempt corporation, a regulated
investment company, a real estate investment trust, a REMIC, or a
cooperative organization to which part I of subchapter T of the Code
applies, (iii) there are no facts or circumstances on or before the date
of transfer (or anticipated) which would reasonably indicate that the
taxes associated with the Class R Certificates will not be paid, and (iv)
the Purchaser is not a foreign branch of a domestic corporation, the
transfer does not involve a transfer or assignment to a foreign branch of
a domestic corporation (or any other arrangement by which any Class R
Certificate is at any time subject to net tax by a foreign country or
U.S. possession), and

	1	 	Bracketed text to be included if the Purchaser is relying on the transferee’s
compliance with the “Asset Test Safe Harbor” rather than the “Formula Test Safe
Harbor.”

E-2-3

 

the Purchaser will not hereafter engage in any such transfer or
assignment (or any such arrangement).]2

     14. That the Purchaser agrees to such amendments of the Pooling and
Servicing Agreement as may be required to further effectuate the
restrictions on transfer of any Residual Certificate to such a
“disqualified organization,” an agent thereof, a Book-Entry Nominee, or a
person that does not satisfy the requirements of paragraph 7 and
paragraph 10 hereof.

     15. That the Purchaser consents to the designation of the Trustee to
act as agent for the “tax matters person” of each REMIC created by the
Trust Fund pursuant to the Pooling and Servicing Agreement.

     We agree to indemnify the Depositor, the Seller, the Servicer and the
Trustee against any liability that may result if we sell or transfer a Residual
Certificate to a purchaser or transferee who does not comply with any
conditions for transfer set forth in the Pooling and Servicing Agreement.

	2	 	Bracketed text to be included if the Purchaser is relying on the transferee’s
compliance with the “Asset Test Safe Harbor” rather than the “Formula Test Safe
Harbor.”

E-2-4

 

     IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this           day of             20     .

	 	 	 	 	 
	 	 	 
	 	 
[name of Purchaser]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

     Personally appeared before me the above-named [name of officer]
            , known or proved to me to be the same person who executed the
foregoing instrument and to be the [title of officer]             of the
Purchaser, and acknowledged to me that he [she] executed the same as his [her]
free act and deed and the free act and deed of the Purchaser.

     Subscribed and sworn before me this           day of             20     .

NOTARY PUBLIC

	 	 	 
	 

	 
	 	 
	COUNTY OF____________________________

	 
	 	 
	STATE OF_____________________________

My commission expires the          day of              20    .

E-2-5

 

EXHIBIT F

FORM OF TRANSFEROR CERTIFICATE

	 	 	 
	

	 	

	

	 	Date

Aegis Asset Backed Securities Corporation

3250 Briarpark, Suite 400

Houston, Texas 77042

Wells Fargo Bank, N.A.

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

Attn: Corporate Trust Services – Aegis 2004-3

	 	 	 
	Re:

	 	Aegis Asset Backed Securities Trust

Mortgage Pass-Through Certificates, Series 2004-3

Ladies and Gentlemen:

     In connection with our disposition of the above Certificates we certify
that we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or
taken any other action which would result in, a violation of Section 5 of the
Securities Act of 1933, as amended.

	 	 	 	 	 
	 	Very truly yours,

[NAME OF TRANSFEROR]

 	 
	 	By:  	______________________________
 	 
	 	 	 	 
	 	 	 	 

F-1

 

	 	 	 	 	 

EXHIBIT G-1

FORM OF INVESTMENT LETTER (NON-RULE 144A)

	 	 	 
	

	 	

	

	 	Date

Aegis Mortgage Corporation

3250 Briarpark, Suite 400

Houston, Texas 77042

Attention: Secondary Marketing

Aegis Asset Backed Securities Corporation

3250 Briarpark, Suite 400

Houston, Texas 77042

Attention: Secondary Marketing

Wells Fargo Bank, N.A.

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

Attention: Corporate Trust Services – Aegis 2004-3

	 	 	 
	Re:

	 	Aegis Asset Backed Securities Trust
	

	 	Mortgage Pass-Through Certificates, Series 2004-3

Ladies and Gentlemen:

     In connection with our acquisition of the above-captioned Certificates, we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the “Act”), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
“accredited investor” under Rule 501(a)(1), (2), (3) or (7) under the Act, or a
Person in which all of the equity owners are such accredited investors, and
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) we are acquiring the Certificates
for investment for our own account and not with a view to any distribution of
such Certificates (but without prejudice to our right at all times to sell or
otherwise dispose of the Certificates in accordance with clause (f) below), (e)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, or taken any other action which would result in a
violation of Section 5 of the Act, and (f) we will not sell, transfer or
otherwise dispose of any Certificates unless (i) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Act or is exempt from such

G-1-1

 

registration requirements, and if requested, we will at our expense
provide an opinion of counsel satisfactory to the addressees of this
Certificate that such sale, transfer or other disposition may be made pursuant
to an exemption from the Act, (ii) the purchaser or transferee of such
Certificate has executed and delivered to you a certificate to substantially
the same effect as this certificate, and (iii) the purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Pooling
and Servicing Agreement.

	 	 	 	 	 
	 	Very truly yours,

[NAME OF TRANSFEREE]

 	 
	 	By:  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 

G-1-2

 

	 	 	 	 	 

EXHIBIT G-2

FORM OF INVESTMENT LETTER (RULE 144A)

	 	 	 
	

	 	

	

	 	Date

Wells Fargo Bank, N.A.

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

Attention: Corporate Trust Services – Aegis 2004-3

Aegis Mortgage Corporation

3250 Briarpark, Suite 400

Houston, Texas 77042

Attention: Secondary Marketing

Aegis Asset Backed Securities Corporation

3250 Briarpark, Suite 400

Houston, Texas 77042

Attention: Secondary Marketing

	 	 	 
	Re:

	 	Aegis Asset Backed Securities Trust
	

	 	Mortgage Pass-Through Certificates, Series 2004-3

Ladies and Gentlemen:

     In connection with the purchase on the date hereof of the captioned
Certificates (the “Purchased Certificates”), the undersigned (the “Transferee”)
hereby certifies and covenants to the transferor, the Seller, the Trustee, the
Certificate Registrar, the Trustee and the Trust Fund as follows:

     1. The Transferee is a “qualified institutional buyer” as that term is
defined in Rule 144A (“Rule 144A”) promulgated under the Securities Act of
1933, as amended (the “Securities Act”), and has completed the form of
certification to that effect attached hereto as Annex A. The Transferee is
aware that the sale to it is being made in reliance on Rule 144A.

     2. The Transferee understands that the Purchased Certificates have not
been registered under the Securities Act or registered or qualified under any
state securities laws and that no transfer may be made unless the Purchased
Certificates are registered under the Securities Act and under applicable state
law or unless an exemption from such registration is available. The Transferee
further understands that neither the Seller, the Trustee, the Certificate
Registrar, the Paying Agent, the Trustee nor the Trust Fund is under any
obligation to register the Purchased Certificates or make an exemption from
such registration available.

G-2-1

 

     3. The Transferee is acquiring the Purchased Certificates for its own
account or for the account of a “qualified institutional buyer,” and
understands that such Purchased Certificates may be resold, pledged or
transferred only (a) to a person reasonably believed to be such a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, or (b) pursuant to another
exemption from registration under the Securities Act and under applicable state
securities laws. In addition, such transfer may be subject to additional
restrictions, as set forth in Section 5.2 of the Pooling and Servicing
Agreement.

     4. The Transferee has been furnished with all information that it
requested regarding (a) the Purchased Certificates and distributions thereon
and (b) the Pooling and Servicing Agreement referred to below.

     5. If applicable, the Transferee has complied or will comply in all
material respects with applicable regulatory guidelines relating to the
ownership of mortgage derivative products.

     All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement
dated as of June 1, 2004, by and among Aegis Asset Backed Securities
Corporation, as Depositor, Aegis Mortgage Corporation, as Seller, Chase
Manhattan Mortgage Corporation, as Servicer, The Murrayhill Company, as Credit
Risk Manager, and Wells Fargo Bank, N.A., as Trustee, pursuant to which the
Purchased Certificates were issued.

     IN WITNESS WHEREOF, the undersigned has caused this Rule 144A
Agreement—QIB Certification to be executed by a duly authorized representative
this [   ] day of [   ] 200[   ].

	 	 	 	 	 
	 	[NAME OF TRANSFEREE]

 	 
	 	By:  	 	 
	 	Title: 	 
	 	 	 	 

G-2-2

 

	 	 	 	 	 

EXHIBIT H

BENEFIT PLAN AFFIDAVIT

	 	 	 
	Re:

	 	[Trust Information] ERISA-Restricted Certificates and
ERISA-Restricted Swap Certificates

	 	 	 	 	 
	STATE OF [              ]

	 	 	)	 
	

	 	 	)	ss: 
	COUNTY/CITY OF [              ]

	 	 	)	 

     Under penalties of perjury, I, the undersigned, declare that, to the best
of my knowledge and belief, the following representations are true, correct and
complete.

     1. That I am a duly authorized officer of [Organization], a [State]
corporation (the “Purchaser”), whose taxpayer identification number is
[              ], and on behalf of which I have the authority to make this
affidavit.

     2. In the case of an ERISA-Restricted Certificate, the Purchaser either:

	(i)	 	is not an employee benefit plan or other retirement
arrangement subject to Section 406 of ERISA or Section 4975 of the
Code (“Plan”), nor a person acting on behalf of any such Plan or
using the assets of any such Plan to effect such transfer;
	 
	(ii)	 	if the Certificate has been the subject of an
ERISA-Qualifying underwriting, is an insurance company and the
purchaser is purchasing the Certificate with funds contained in an
“insurance company general account” (as such term is defined in
Section V(e) of Prohibited Transaction Class Exemption 95-60 (“PTCE
95-60”)) and the acquisition and holding of such Certificate are
covered under Sections I and III of PTCE 95-60; or
	 
	(iii)	 	has provided an Opinion of Counsel satisfactory to the
Trustee to the effect that the acquisition or holding of such
Certificate will not result in prohibited transactions under Section
406 of ERISA and Section 4975 of the Code and will not subject the
Trustee, the Depositor, the Seller, the Servicer or the NIMS
Insurer, if any, to any obligation in addition to those expressly
undertaken in this Agreement; such Opinion of Counsel will not be at
the expense of any of the above parties or the Trust Fund.

     3. In the case of an ERISA-Restricted Swap Certificate, either:

	(i)	 	the Purchaser is neither a Plan nor a person acting on behalf
of any such Plan or using the assets of any such Plan to effect such
transfer; or

H-1

 

	(ii)	 	the acquisition and holding of the ERISA- Restricted Swap
Certificate are eligible for exemptive relief under Prohibited
Transaction Class Exemption (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38,
PTCE 95-60 or PTCE 96-23.

     Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Pooling and Servicing Agreement dated as
of June 1, 2004, by and among Aegis Asset Backed Securities Corporation, as
Depositor, Aegis Mortgage Corporation, as Seller, Chase Manhattan Mortgage
Corporation, as Servicer, The Murrayhill Company, as Credit Risk Manager, and
Wells Fargo Bank, N.A., as Trustee.

	 	 	 	 	 
	 	[NAME OF PURCHASER]

 	 
	 	By:  	 	 
	 	 	[TITLE] 	 
	 	 	 	 

H-2

 

	 	 	 	 	 

EXHIBIT I

[Reserved]

I-1

 

EXHIBIT J

REQUEST FOR RELEASE OF DOCUMENTS

	 	 	 
	To:

	 	Wells Fargo Bank, N.A.
	

	 	1015 10th Avenue S.E.
	

	 	Minneapolis, MN 55414-0031
	

	 	Attn: Inventory Control

	 	 	 
	Re:

	 	Pooling and Servicing Agreement dated as of June 1, 2004,
among Aegis Asset Backed Securities Corporation, as Depositor,
Aegis Mortgage Corporation, as Seller, Chase Manhattan Mortgage
Corporation, as Servicer, The Murrayhill Company, as Credit Risk
Manager, and Wells Fargo Bank, N.A., as Trustee

     In connection with the administration of the Mortgage Loans held by you
as Custodian for the Owner pursuant to the above-captioned Pooling and
Servicing Agreement, we request the release, and hereby acknowledge receipt,
of the Custodian’s Mortgage File for the Mortgage Loan described below, for
the reason indicated.

     Mortgage Loan Number:

     Mortgagor Name, Address & Zip Code:

     Reason for Requesting Documents (check one):

	 	 	 	 	 	 	 	 	 
	 _________ 

	 	 	1.	 	 	Mortgage Paid in Full	 	 
	 
	 	 	 	 	 	 	 	 
	 _________ 

	 	 	2.	 	 	Foreclosure	 	 
	 
	 	 	 	 	 	 	 	 
	 _________ 

	 	 	3.	 	 	Substitution	 	 
	 
	 	 	 	 	 	 	 	 
	 _________ 

	 	 	4.	 	 	Other Liquidation (Repurchases, etc.)	 	 
	 
	 	 	 	 	 	 	 	 
	 _________ 

	 	 	5.	 	 	Nonliquidation
	 	Reason: _________________ 

	 	 	 
	Address to which Custodian should

	 	

	Deliver the Custodian’s Mortgage File

	 	

	

	 	

	 	 	 
	 

	 	By:  ____________________________________ 
	

	 	                  (authorized signer)
	

	 	Issuer:  _________________________________ 

J-1

 

	 	 	 
	

	 	Address:  ___________________________________________ 
	 
	 	 
	

	 	Date:  _______________________________________________ 

Custodian

Wells Fargo Bank, N.A.

Please acknowledge the execution of the above request by your signature and
date below:

	 	 	 
	___________________________________________ 

	 	________________________ 
	Signature

	 	Date
	 
	 	 
	Documents returned to Custodian:
	 	 
	 
	 	 
	___________________________________________ 

	 	________________________ 
	Custodian

	 	Date

J-2

 

EXHIBIT K

FORM OF CERTIFICATION TO BE

PROVIDED TO THE DEPOSITOR BY THE SERVICER

Aegis Asset Backed Securities Corporation

3250 Briarpark, Suite 400

Houston, TX 77042

	 	 	 
	

	 	Re: Aegis Asset Backed Securities Trust
	

	 	Mortgage Pass-Through Certificates, Series 2004-3

     Reference is made to the pooling and servicing agreement dated as of June
1, 2004 (the “Pooling and Servicing Agreement”), among Aegis Asset Backed
Securities Corporation, as Depositor, Aegis Mortgage Corporation, as Seller,
Chase Manhattan Mortgage Corporation, as Servicer, The Murrayhill Company, as
Credit Risk Manager, and Wells Fargo Bank, N.A., as Trustee. I, [identify the
certifying individual], a [TITLE] of the Servicer, hereby certify to the
Depositor and its officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:

	1.	 	I have reviewed the information required to be delivered to the Trustee
pursuant to the Pooling and Servicing Agreement (the “Servicing
Information”);
	 
	2.	 	Based on my knowledge, the Servicing Information has been provided to the
Trustee when and as required under the Pooling and Servicing Agreement;
	 
	3.	 	Based on my knowledge, the Servicing Information does not contain any
material untrue information or omit to state information necessary to make
the Servicing Information, in light of the circumstances under which such
information was provided, not misleading as of the date of this
certification; and
	 
	4.	 	I am responsible for reviewing the activities performed by the Servicer
under the Pooling and Servicing Agreement, and based upon my knowledge and
the review required under the Pooling and Servicing Agreement, and except
as disclosed in writing to you on or prior to the date of this
certification either in the accountants’ report required under the Pooling
and Servicing Agreement or in disclosure, a copy of which is attached
hereto, the Servicer has, as of the last day of the period covered by such
reports, fulfilled its obligations under the Pooling and Servicing
Agreement.

	 	 	 	 	 
	 	Chase Manhattan Mortgage Corporation,

as Servicer

 	 
	 	 	 
	 	By:  	 	 
	 	Title: 	 
	 	Date: 	 

K-1

 

	 	 	 	 	 

EXHIBIT L

FORM OF CERTIFICATION TO BE PROVIDED

TO THE DEPOSITOR BY THE TRUSTEE

	 	 	 
	

	 	Re: Aegis Asset Backed Securities Trust
	

	 	Mortgage Pass-Through Certificates, Series 2004-3

I, [identify the certifying individual], a [title] of Wells Fargo Bank, N.A.,
as Trustee, hereby certify to Aegis Asset Backed Securities Corporation (the
“Depositor”), and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification that:

1. [I have reviewed the annual report on Form 10-K for the fiscal year [            ],
and all reports on Form 8-K containing distribution reports filed in respect of
periods included in the year covered by that annual report, of the Depositor,
relating to the above-referenced trust;]

2. [Based on my actual knowledge, without independent investigation or inquiry,
the information in these distribution reports prepared by the Trustee, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made not misleading as of the
last day of the period covered by that annual report; and]

3. [Based on my knowledge, the distribution information required to be provided
by the trustee under the pooling and servicing agreement is included in these
distribution reports.]

     Date:  ________________________

     Wells Fargo Bank, N.A., as Trustee

	 	 	 	 	 
	 	 	 
	 	 By:  	
 	 
	 	 	[Signature] 	 
	 	 	[Title] 	 

L-1

 

	 	 	 	 	 

EXHIBIT M

FORM OF LIMITED POWER OF ATTORNEY TO BE

PROVIDED TO THE SERVICER BY THE TRUSTEE

	 	 	 
	WHEN RECORDED MAIL TO:

	 	PREPARED BY:
	CHASE MANHATTAN MORTGAGE CORPORATION

	 	WELLS FARGO BANK, N.A.
	PAID ACCOUNTS DEPARTMENT

	 	ATTN: KATHLEEN DEAN
	10790 RANCHO BERNARDO ROAD

	 	9062 OLD ANNAPOLIS ROAD
	SAN DIEGO, CA 92127

	 	COLUMBIA, MD 21045

LIMITED POWER OF ATTORNEY

     WELLS FARGO BANK, N.A., a national banking association, (the “Company”)
hereby irrevocably constitutes and appoints Chase Manhattan Mortgage
Corporation, (“Chase”), and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Company and in the name of
the Company or in its own name, from time to time in Chase’s discretion, for
the purpose of servicing mortgage loans, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of servicing mortgage loans, and, without
limiting the generality of the foregoing, the Company hereby gives Chase the
power and right, on behalf of the Company, without assent by the Company, to do
the following, to the extent consistent with the terms and conditions of the
Pooling and Servicing Agreements and Servicing Agreements attached hereto as
Exhibit A :

     (A) to direct any party liable for any payment under any loans to
make payment of any and all moneys due or to become due thereunder
directly to Chase or as Chase shall direct and in the name of the Company
or its own name, or otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances, or other instruments for
the payment of moneys due under any loans (including those related to
mortgage insurance); (B) to execute substitutions of trustee,
reconveyance documents, foreclosure documents, modifications, grant deeds
and other instruments conveying real property, and such other
documents as Chase deems necessary to carry out its obligations to
service the mortgage loans; (C) to ask or demand for, collect, receive
payment of and receipt for, any and all moneys, claims, and other amounts
due or to become due at any time in respect of or arising out of any
loans; (D) to commence and prosecute any suits, actions, or proceedings
at law or in equity in any court of competent jurisdiction to collect the
loans or any thereof and to enforce any other right in respect of any
loans; and (E) generally, to do, at Chase’s option, at any time, and from
time to time, all acts and things which Chase deems necessary to protect,
preserve or realize upon the loans and the liens thereon and to effect
the intent of the Agreement, all as fully and effectively as the Company
might do.

DATED this ____ day of __________________ 200_.

	 	 	 	 	 
	 	 	Wells Fargo Bank, N.A., a national

banking association

 	 
	 	By:  	 	 
	 	Its:	 
	 	 	 	 
	 

STATE OF MARYLAND

M-1

 

COUNTY OF HOWARD

On this            day of                 2004, before me, the
undersigned, a notary public, personally appeared                 President of Wells Fargo
Bank, N.A., a national banking association, who is personally known to me on
the basis of satisfactory evidence to be the person whose name is subscribed to
the within instrument and acknowledged to me that they executed the same in
his/her authorized capacities and that by their signatures on the instrument
the persons of the entry upon behalf of which the persons acted, executed the
Instrument.

WITNESS my hand and official seal.

Signature ___________________________

M-2

 

Exhibit A [to Exhibit M]

Pooling and Servicing Agreement

Among

Aegis Asset Backed Securities Corporation, Aegis Mortgage Corporation, Chase Manhattan Mortgage Corporation,

The Murrayhill Company and Wells Fargo Bank, N.A.

Aegis Asset Backed Securities Trust

Mortgage Pass-Through Certificates, Series 2004-3

M-1

 

EXHIBIT N

CREDIT RISK MANAGEMENT AGREEMENT

N-1

 

EXHIBIT O

SWAP AGREEMENT

O-1<PAGE>
                                                                    EXHIBIT 10.3

                               RETENTION AGREEMENT

     This Agreement is made this 17th of February, 2004, by and between
Sensytech, Inc., a Delaware corporation (the "Company"), and Donald F. Fultz,
(the "Executive").

     WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that the possibility of a Change of Control (as defined below) exists and that
the threat or the occurrence of a Change of Control can result in significant
distraction of the Company's key management personnel because of the
uncertainties inherent in such a situation;

     WHEREAS, the Board has determined that it is essential, and in the best
interest of the Company and its stockholders, for the Company to retain the
services of the Executive in the event of a threat, or the occurrence, of a
Change of Control and to ensure the Executive's continued dedication and efforts
in such event without undue concern for the Executive's personal financial and
employment security; and

     WHEREAS, in order to induce the Executive to remain in the employ of the
Company in the event of a threat, or the occurrence, of a Change of Control, the
Company desires to enter into this Agreement with the Executive to provide the
Executive with certain benefits in the event of a Change of Control.

     NOW, THEREFORE, the parties hereto, in consideration of the respective
agreements of the parties contained herein and intending to be legally bound,
agree as follows:

     1. Term of Agreement. This Agreement shall commence as of February 17th
(the "Effective Date"), and shall continue in effect until January I, 2005 (the
"Term"); provided, however, that on January 1,2005, and on each January 1
thereafter, the Term shall automatically be extended for one (1) year unless
either the Executive or the Company shall have given written notice to the other
at least ninety (90) days prior thereto that the Term shall not be so extended;
provided, further, however, that following the occurrence of a Change of
Control, the Term shall not expire prior to the expiration of at least
twenty-four (24) months after such event.

     2. Payments. (a) If, during the Term, the Executive's employment with the
Company or its Affiliates shall be terminated within twenty-four (24) months
following a Change of Control, the Executive shall be entitled to the following
compensation and benefits:

     i. within 60 days of the termination of his employment, he shall be paid an
amount equal to two (2) years of his base salary at the date of the Change of
Control; and

     ii. for the next eighteen (18) months, the Company shall, at its expense,
continue on behalf of the Executive and his dependents and beneficiaries, the
life insurance, disability, medical, dental and hospitalization coverage and
benefits provided to the Executive immediately prior to the Change of Control.
The Company's obligation hereunder with respect to this subparagraph ii shall be
reduced to the extent that the Executive obtains coverage and benefits pursuant
to a subsequent employer's benefit plans, provided that the aggregate coverage
and

<PAGE>

benefits of the combined benefit plans is no less favorable to the Executive
than the coverage and benefits required to be provided hereunder. In the event
such coverage and benefits may not be continued (or where such continuation
would adversely affect the tax status of the benefit plan pursuant to which the
coverage and benefits are provided) under applicable law or regulations, the
Company shall pay to the Executive the cash equivalent in lieu of such coverage
and benefits.

         iii. The Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
and no such payment shall be offset or reduced by the amount of any compensation
or benefits provided to the Executive in any subsequent employment except as
provided in subparagraph ii above.

         (b) If the Executive is still employed by the Company twenty-four (24)
months after a Change in Control, he shall be paid on that date an amount equal
to two (2) years of his base salary at the date of the Change of Control.

         3. Fees and Expenses. The Company shall pay all legal fees and related
expenses (including the costs of experts, evidence and counsel) incurred by the
Executive as they become due as a result of the Executive seeking to obtain or
enforce any right or benefit provided by this Agreement or by any other plan or
arrangement maintained by the Company under which the Executive is or may be
entitled to receive benefits.

         4. Notices. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing, shall be
signed by the Executive, if to the Company, or by a duly authorized officer of
the Company, if to the Executive, and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage paid, addressed to the respective addresses given by each party to the
other, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.

         5. Nature of Rights. Nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company or any Affiliate of
the Company and for which the Executive may qualify, nor shall anything herein
limit or reduce such rights or benefits the Executive may have under any other
agreements with the Company or any Affiliate of the Company. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan or program of the Company or any Affiliate of the Company shall be
payable in accordance with such plan or program.

         6. Settlement of Claims. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including without
limitation, any set-off, counterclaim, defense, recoupment, or other right which
the Company may have against the Executive or others. Notwithstanding the
foregoing, the Company need not make the payments provided for in this Agreement
if the

                                       2

<PAGE>

Executive is terminated as a result of (a) conviction of a felony; (b) a
material violation of the Company's Code of Conduct; (c) a criminal conviction
involving a violation of the federal securities laws; (d) a judgment by a court
of competent jurisdiction in a case brought by the Securities and Exchange
Commission involving a violation of the federal securities laws; or (e) actions
by the Executive which demonstrate moral turpitude on his part.

     7. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Executive and the Company. No waiver by either party hereto at
any time of any breach by the other party hereto of, or of an obligation to
comply with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by any party which are not expressly set
forth in this Agreement.

     8. Successors; Binding Agreement.

     (a) This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns. The Company shall require its successors
and assigns to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that it would be required to perform this
Agreement if no such succession or assignment had taken place.

     (b) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. The
Agreement shall inure to the benefit of and by enforceable by the Executive and
his heirs, executors and legal representatives.

     9. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Virginia.

     10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

     11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto, and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto,
with respect to the subject matter hereof.

     12. Definitions.

     (a) Affiliate. For purposes of this Agreement, "Affiliate" means, with
respect to any person, any entity, directly or indirectly, controlled by,
controlling or under common control with such person.

                                        3
<PAGE>

     (b) "Beneficial Owner," "Beneficially Owned," and "Beneficially Owning"
shall have the same meanings as under Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended.

     (b) Change of Control. "Change of Control" shall mean any of the following:

     (i) the acquisition by any person of Beneficial Ownership of voting
securities of the Company, which when added to the voting securities of the
Company then Beneficially Owned by such person, would result in such person
Beneficially Owning 33% or more of the combined voting power of the Company's
then outstanding voting securities; provided, however, that for purposes of this
paragraph a person shall not be deemed to have an acquisition of voting
securities if such person: (A) acquires voting securities as a result of a stock
split, stock dividend or other corporate restructuring in which all stockholders
of the class of such voting securities are treated the same on a pro rata basis;
(B) acquires the voting securities directly from the Company; (C) is the Company
or any corporation or other person of which a majority of its voting power or
its equity securities or equity interest is owned directly or indirectly by the
Company (a "Controlled Entity"); or (D) acquires voting securities in connection
with a "Non-control Transaction" (as defined in paragraph (c) below); or

     (ii) the individuals who, as of the Effective Date, are members of the
Board (the "Incumbent Board") cease for any reason to constitute at least
two-thirds of the Board; provided, however, that if either the election of any
new director or the nomination for election of any new director by the Company's
stockholders was approved by a vote of at least two-thirds of the Incumbent
Board prior to such election or nomination, such new director shall be
considered as a member of the Incumbent Board; provided further, however, that
no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under the
1934 Act) or other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board (a "Proxy Contest"), including by
reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest; or

     (iii) approval, as required by the Delaware General Corporation Law, by the
stockholders of the Company of:

         (A) a merger, consolidation or reorganization involving the Company (a
"Business Combination"), unless

         (1) the stockholders of the Company immediately before the Business
Combination own, directly or indirectly, immediately following the Business
Combination at least a majority of the combined voting power of the outstanding
voting securities of the corporation resulting from the Business Combination
(the "Surviving Corporation") in substantially the same proportion as their
ownership of the voting securities of the Company immediately before the
Business Combination, and

                                        4

<PAGE>

         (2) the individuals who were members of the Incumbent Board immediately
prior to the execution of the agreement providing for the Business Combination
constitute at least a majority of the Board of Directors of the Surviving
Corporation, and

         (3) no person (other than the Company or any Controlled Entity, a
trustee or other fiduciary holding securities under one or more employee benefit
plans or arrangements (or any trust forming a part thereof) maintained by the
Company, the Surviving Corporation or any Controlled Entity, or any person who
immediately prior to the Business Combination had Beneficial Ownership of 33% or
more of the then outstanding voting securities) has Beneficial Ownership of 33%
or more of the combined voting power of the Surviving Corporation's then
outstanding voting securities (a Business Combination satisfying the conditions
of clauses (1), (2) and (3) of this subparagraph (A) shall be referred to as a
"Non-control Transaction");

         (B) a complete liquidation or dissolution of the Company; or

         (C) the sale or other disposition of all or substantially all of the
assets of the Company (other than a transfer to a Controlled Entity).

     Notwithstanding the foregoing, a Change of Control shall not be deemed to
occur solely because 33% or more of the outstanding voting securities of the
Company is Beneficially Owned by (x) a trustee or other fiduciary holding
securities under one or more employee benefit plans or arrangements (or any
trust forming a part thereof) maintained by the Company or any Controlled Entity
or (y) any corporation which, immediately prior to its acquisition of such
interest, is owned, directly or indirectly, by the stockholders of the Company
in the same proportion as their ownership of stock in the Company immediately
prior to such acquisition.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
one of its duly authorized officers, and the Executive has personally executed
this Agreement, all as of the date first written above.

SENSYTECH, INC.                                   DONALD F. FULTZ

By:  /s/ S. KENT ROCKWELL                         /s/ DONALD F. FULTZ
   ---------------------------                    -----------------------------
Title: CEO
      ------------------------                    -----------------------------

                                        5

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