POOLING AND SERVICING AGREEMENT

 

Exhibit 4.1

 

AEGIS ASSET BACKED SECURITIES CORPORATION,

Depositor

AEGIS MORTGAGE CORPORATION,

Seller

 

[           ],

Master Servicer, Securities Administrator and Custodian

 

[           ],

Servicer

 

[[           ],

Credit Risk Manager]

 

and

[           ],

Trustee

FORM OF

POOLING AND SERVICING AGREEMENT

Dated as of [           ], 20[   ]

AEGIS ASSET BACKED SECURITIES TRUST

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 20[   ]-[   ]

 

 

 

TABLE OF CONTENTS

SCHEDULES

 

EXHIBITS

 

[The provisions of the Pooling and Servicing Agreement for each series will be modified as applicable]

This POOLING AND SERVICING AGREEMENT dated as of [           ], 20[   ] (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”), [           ], as master servicer (in such capacity, the “Master Servicer”), securities administrator (in such capacity, the “Securities Administrator”) and custodian (in such capacity, the “Custodian”), [           ], as servicer (together with any successor in interest, the “Servicer”), [           ], as credit risk manager (the “Credit Risk Manager”), and [           ], 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 Master Servicer, the Securities Administrator, the Custodian, 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, an election shall be made 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, (iii) the Basis Risk Reserve Fund, (iv) the Supplemental Interest Trust (v) [the Supplemental Interest Trust Account], [(vi) the Pre-Funding Account, (vii) the Capitalized Interest Account] and [(viii)] the obligation to pay Class I Shortfalls (collectively, the “Excluded Trust Assets”)) be treated for federal income tax purposes as comprising three real estate mortgage investment conduits under Section 860D of the Code (each a “REMIC” or, in the alternative “REMIC 1,” “REMIC 2,” and “REMIC 3,” 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 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 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 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.

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”):

On each Distribution Date, the Securities Administrator shall first pay or charge as an expense of REMIC 1 all expenses of the Trust Fund for such Distribution Date, other than any Net Swap Payment or Swap Termination Payment required to be made from the Trust Fund.

 

 

 

On each Distribution Date the Securities Administrator shall distribute the aggregate Interest Remittance Amount for the two Mortgage Pools (net of expenses described in the preceding paragraph) with respect to each of the Lower Tier Interests in REMIC 1 based on the above-described interest rates.

On each Distribution Date, the Securities Administrator shall distribute the aggregate Principal Remittance Amount for the two Mortgage Pools with respect to the Lower Tier Interests in REMIC 1, first to the Class LT1-A Interest until its principal balance is reduced to zero, and then sequentially, to the other Lower Tier Interests in REMIC 1 in ascending order of their numerical class designation, and, with respect to each pair of classes having the same numerical designation, in equal amounts to each such class, until the principal balance of each such class is reduced to zero. All losses on the Mortgage Loans shall be allocated among the Lower Tier Interests in REMIC 1 in the same manner that principal distributions are allocated.

On each Distribution Date, the Securities Administrator shall distribute 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-F59 and Class LT1-V59 Lower Tier Interests, respectively.

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 Interest) is hereby designated as a regular interest in REMIC 2 (the “REMIC 2 Regular Interests”):

___________________________

 

 

 

 

 

 

On each Distribution Date, interest shall be distributed on the Lower Tier Interests in REMIC 2 based on the above-described interest rates , provided , however , that interest that accrues on the Class LT2-Q Interest shall be deferred in an amount equal to one-half of the increase, if any, in the Overcollateralization Amount for such Distribution Date. Any interest so deferred shall itself bear interest at the interest rate for the Class LT2-Q Interest. An amount equal to the interest so deferred shall be distributed as additional principal on the other Lower Tier Interests in REMIC 2 having a principal balance in the manner described under priority (a) below.

On each Distribution Date principal shall be distributed, and Realized Losses shall be allocated, among the Lower Tier Interests in REMIC 2 in the following order of priority:

On each Distribution Date, the Securities Administrator shall be deemed to have distributed the Prepayment Penalties passed through with respect to the Class LT1-F59 and Class LT1-V59 Lower Tier Interests in REMIC 1 on such Distribution Date to the Class LT2-Q 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.

 

 

 

___________________________

 

 

As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled Principal Balance of $[           ].

ARTICLE I

DEFINITIONS

Accepted Master Servicing Practices : With respect to any Mortgage Loan, as applicable, either (x) those customary mortgage master servicing practices of prudent mortgage servicing institutions that master service mortgage loans of the same type and quality as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, to the extent applicable to the Master Servicer (except in its capacity as successor to the Servicer), or (y) as provided in Section 3A.1 hereof, but in no event below the standard set forth in clause (x).

Account : The Custodial 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.

[ Addition Notice : With respect to each sale of Subsequent Mortgage Loans to the Trustee pursuant to Section [    ] of this Agreement, a notice from the Depositor substantially in the form of Exhibit [   ] hereto delivered to the Trustee, the Master Servicer, the Securities Administrator, the Custodian, each Rating Agency and any NIMS Insurer. ]

[ Additional Mortgage Loan : A Mortgage Loan that is conveyed as of the Transfer Date to the Trustee by the Depositor pursuant to a Transfer Supplement to the [ Sale ] Agreement, which Mortgage Loan shall be identified in such Transfer Supplement as a Additional Mortgage Loan and added by the Depositor to the Mortgage Loan Schedule.]

[Additional Termination Event : As defined in the Swap Agreement.]

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 Distribution Date (and the related Accrual Period), an amount equal to (i) two, multiplied by (ii) the weighted average of the interest rates for such Distribution Date for the Class LT2-[A], Class LT2-[M], Class LT2-[B] and Class LT2-Q Interests, weighted in proportion to their Class Principal Amounts as of the beginning of the related Accrual Period and computed by subjecting the rate on the Class LT2-Q to a cap of 0.00%, and by subjecting the rate on each of the Class LT2-[A], Class LT2-[M] and Class LT2-[B] Interests to a cap that corresponds to the Certificate Interest Rate (determined by substituting the REMIC 2 Net Funds Cap for the Net Funds Cap) for the Corresponding Class of Certificates, provided, however , that for each Class of LIBOR Certificates, the Certificate Interest Rate shall be multiplied by an amount equal to (a) the actual number of days in the Accrual Period, divided by (b) 30.]

Advance : Each of a Delinquency Advance and a Servicing Advance, as applicable.

Advance Facility : As defined in Section 3.20.

Advance Facility Counterparty : As defined in Section 3.20.

Advance Reimbursement Payment : With respect to each Distribution Date until the Initial Advance Facility has been terminated, the sum of (i) the amount available from collections on the Mortgage Loans with respect to such Distribution Date to reimburse the Servicer (or the Subservicer) for unreimbursed Advances made by it, such right of reimbursement pursuant to this subclause (i) being limited to amounts received on any Mortgage Loan in respect of which any such Advance was made, and (ii) to the extent of other available amounts, the amount necessary to reimburse the Servicer (or the Subservicer) for any Nonrecoverable Advance previously made.

 

 

 

Advance Reimbursement Rights : As defined in Section 3.20.

[ Advance Reimbursement Shortfall Amount : As defined in Section 3.01.]

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.

[Affected Party : As defined in the Swap Agreement.]

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 : Not Applicable.

Aggregate Pool Balance : As of any date of determination, the aggregate of the Pool Balances of Pool 1 and Pool 2 on such date.

Aggregate Overcollateralization Release Amount : With respect to any Distribution Date, the lesser of (x) the aggregate of the Principal Remittance Amounts for each Mortgage Pool 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 aggregate of the Principal Remittance Amounts for such Distribution Date is applied on such date in reduction of the aggregate Certificate Principal Amount of the LIBOR 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 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 Aggregate 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 assignment of the Mortgage to the Trustee for the benefit of the Certificateholders, 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.

[B] Principal Distribution Amount : With respect to any Distribution Date, the amount, if any, by which (x) the sum of (i) the aggregate Class Principal Amount of the Class [A] and Class [M] Certificates, in each case after giving effect to distributions on such Distribution Date, and (ii) the Class Principal Amount of the Class [B] Certificates immediately prior to such Distribution Date exceeds (y) the [B] Target Amount.

[B] Target Amount : With respect to any Distribution Date, an amount equal to the lesser of (a) the product of (i) [           ]% and (ii) the Aggregate Pool Balance for such Distribution Date and (b) the amount, if any, by which (i) the Aggregate 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(e) 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 applicable 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 applicable Net Funds Cap.

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 [A], Class [M] and Class [B] 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 Florida, Georgia, Maryland, Minnesota or Texas are closed.

[ Capitalized Interest Account : The account created and maintained by the Securities Administrator pursuant to Section [    ] . Such account shall not be an asset of any REMIC. ]

[ Capitalized Interest Requirement : With respect to any Distribution Date to and including the Distribution Date following the end of the Pre-Funding Period, an amount equal to the product of (i) the weighted average Net Mortgage Rate of the Mortgage Loans divided by 12, multiplied by (ii) the excess of (a) the balance in the Pre-Funding Account as of the Closing Date over (b) the aggregate Scheduled Principal Balance of the Subsequent Mortgage Loans that will have a scheduled interest payment included in the related Interest Remittance Amount for such Distribution Date. ]

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 or 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) and with respect to any other Class of Certificates, the Certificateholder.

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 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 and REMIC 2, all Lower Tier Interests], bearing the same class designation.

Class A Certificates : Collectively, the Class [A] Certificates.

Class B Certificates : Collectively, the Class [B] 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 3 on such Distribution Date, all as further provided in Section 8.11(c) hereof.

Class M Certificates : Collectively, the Class [M] 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 $[           ] (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 regular interests in REMIC 2 as specified in the Preliminary Statement hereto.

Closing Date : [           ], 20[   ].

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 Master 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 or the Master 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. In accordance with Section 3A.11, the Master Servicer will be required to make any payment of Compensating Interest required to be made but not made by the Servicer pursuant to this Agreement with respect to any Distribution Date, but only to the extent of compensation received by the Master Servicer on such Distribution Date in accordance with Section 3.A.8. 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.

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

Corporate Trust Office : With respect to the Trustee, the principal corporate trust office of the Trustee, which office at the date of the execution of this instrument is located at [           ], [           ], [           ], Attention:   AEGIS 20[   ]-[   ], or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Master Servicer, the Securities Administrator and the Servicer. With respect to the Securities Administrator, the office of the Securities Administrator, which for purposes of Certificate transfers and surrender is located at [           ], [           ], [           ], [           ], Attention: [Corporate Trust Services] (AEGIS 20[   ]-[   ]) and for all other purposes is located at[           ], [           ], [           ], Attention: [Corporate Trust Services] (AEGIS 20[   ]-[   ]) or for overnight deliveries, at [           ], [           ], [           ], Attention: [Corporate Trust Services] (Aegis 20[   ]-[   ]).

Corresponding Class : The Class of Certificates that corresponds to a class of interests in REMIC 2, as provided in the Preliminary Statement.

Corresponding REMIC 2 IO : For each Lower Tier Interest in REMIC 2 having an “A” in its class designation, the class of Lower Tier Interest in REMIC 2 having the same numeric designation and an “IO” in its class designation, as described in the table for REMIC 2 set out in the Preliminary Statement.

 

 

 

[ Credit Advance Rate : The related per annum interest rate set forth in the related Mortgage Note with respect to any Revolving Credit Loan.]

[ Credit Line : With respect to a Revolving Credit Loan, the maximum principal amount which may be advanced to a Mortgagor under the terms of the related Mortgage Note.]

[Credit Line Advance : With respect to a Revolving Credit Loan, a principal disbursement to a Mortgagor under the terms of the related Mortgage Note (collectively, “Credit Line Advances”).]

[Credit Risk Management Agreements : The Loan Performance Advisor Agreement and the Loan Performance Advisor Agreement Term Sheet, each dated as of the Closing Date, entered into by the Subservicer and [the Credit Risk Manager], in the form of Exhibit N attached hereto.]

[Credit Risk Manager : [           ], a [           ] limited liability company, 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 : [           ]% 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.

Custodial Account : The separate Eligible Account or Accounts established and maintained by the Servicer (or any subservicer on its behalf) pursuant to Section 3.5 hereof.

Custodian : [           ] or any successor thereto.

Cut-off Date : [[           ], 20[   ]] [As set forth for each Mortgage Loan in the Mortgage Loan Schedule].

Cut-off Date Balance : [The Pool Balance as of the Cut-off Date] [With respect to the Mortgage Loans in the Trust on the Closing Date, the sum of (i) the aggregate Scheduled Principal Balance for all such Initial Mortgage Loans as of [           ] and (ii) the Pre-Funding Amount].

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.

 

 

 

[Defaulting Party : As defined in the Swap Agreement.]

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 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 a successor servicer) or the Master Servicer pursuant to Section 3.19.

Delinquency Event : With respect to any Distribution Date, a “Delinquency Event” shall have occurred if the Rolling Three Month Delinquency Rate as of the last day of the immediately preceding calendar month equals or exceeds [           ]% 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.

 

 

 

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

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.

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 16th day of the month in which such Distribution Date occurs, or, if such 16th day is not a Business Day, the immediately 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 Securities Administrator 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 [           ] 20[   ].

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, the Securities Administrator 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:

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

 

 

 

 

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 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 [B], 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 : A Servicer Event of Default or a Master Servicer Event of Default, as applicable.

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 [           ] 20[   ].

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.

Form 10-K Certification : As defined in Section 7.3.

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 Securities Administrator, the Master Servicer, the Servicer, any subservicer retained by 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 and the Securities Administrator 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 Securities Administrator, the Master Servicer, the Servicer or [the Credit Risk Manager] in determining whether any Certificates are registered to an Affiliate of the Depositor, the Securities Administrator, the Master Servicer, the Servicer or [the Credit Risk Manager].

 

 

 

[Home Equity Accepted Servicing Practices : With respect to any Revolving Credit Loan, those mortgage loan servicing practices (including collection procedures) of prudent mortgage banking institutions which service home equity mortgage loans of the same type as such Revolving Credit Loan in the jurisdiction where the related Mortgaged Property is located.]

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 Advance Facility : The Subservicing Advance Agreement dated as of[           ], 20[   ], between the Initial Advance Facility Counterparty and the Subservicer. For purposes of this Agreement, the Initial Advance Facility shall have been terminated if (i) the Subservicer is no longer acting as subservicer (or as Servicer) or (ii) the Initial Advance Facility Counterparty shall have notified the Securities Administrator and the Trustee in writing that the Initial Advance Facility has been terminated.]

[Initial Advance Facility Counterparty : [           ], and its successors and permitted assigns under the Initial Advance Facility.]

Initial LIBOR Rate : [           ]%.

[Initial Mortgage Loan : A Mortgage Loan that is conveyed to the Trustee pursuant to this Agreement on the Closing Date. The Initial Mortgage Loans subject to this Agreement are identified on the Mortgage Loan Schedule annexed hereto as Schedule I and have an aggregate Scheduled Principal Balance as of the Cut-off Date of $[           ].]

Initial Optional Purchase Date : The later of (1) the Distribution Date following the month in which the Pool Balance is less than 10.0% of the Cut-off Date Balance and (2) [           ] 20[   ].

Insurance Fee Rate : Not applicable.

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.

Interest Remittance Amount : With respect to each Mortgage Pool and 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 in such Mortgage Pool during the related Collection Period minus (x) any PMI Insurance Premiums related to the Mortgage Loans in such Mortgage Pool for such Distribution Date and any state taxes imposed on such premium, (y) the Servicing Fee with respect to the Mortgage Loans in such Mortgage Pool and (z) previously unreimbursed Delinquency Advances due to the Servicer or the Master Servicer to the extent allocable to interest and the allocable portion of previously unreimbursed Servicing Advances with respect to the Mortgage Loans, (ii) any Compensating Interest Payments with respect to such Mortgage Loans and the related Prepayment Period, (iii) the portion of any Purchase Price or Substitution Adjustment Amount paid with respect to the Mortgage Loans 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, for each Mortgage Pool, (b) the product of (i) the applicable Pool Percentage for such Distribution Date and (ii) any costs, expenses or liabilities reimbursable to the Master Servicer, the Securities Administrator, the Custodian, the Servicer or the Trustee to the extent provided in this Agreement or any other Operative Document and not reimbursed pursuant to clause (a) above ( provided, however , that in the case of the Trustee, such reimbursable amounts to the Trustee pursuant to Section 3.8 from amounts otherwise allocable to interest 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 for such amounts from the Interest Remittance Amount in accordance with the priority of distributions under Section [    ] or, in subsequent Anniversary Years, from amounts otherwise allocable to interest (subject to the $200,000 per Anniversary Year limitation); 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). [For each Distribution Date up to and including the Distribution Date in [            ], the Interest Remittance Amount shall include amounts distributable from the Capitalized Interest Account in an amount equal to the Capitalized Interest Requirement for such Distribution Date.] [

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.

Latest Possible Maturity Date : The Distribution Date occurring in [           ] 20[   ].

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 Securities Administrator 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 Securities Administrator shall 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 shall be the most recently published Interest Settlement Rate. In the event that the BBA no longer sets an Interest Settlement Rate, the Securities Administrator shall designate an alternative index that has performed, or that the Securities Administrator expects to perform, in a manner substantially similar to the BBA’s Interest Settlement Rate. The Securities Administrator shall 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(c), that the selection of such index shall not cause an Adverse REMIC Event.

The establishment of LIBOR by the Securities Administrator and the Securities Administrator’s subsequent calculation of the Certificate Interest Rate applicable to the LIBOR Certificates for the relevant Accrual Period, in the absence of manifest error, shall 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 [A], Class [M] or Class [B] 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 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.

[M] Principal Distribution Amount : With respect to any Distribution Date, the amount, if any, by which (x) the sum of (i) the aggregate Class Principal Amount of the Class [A] Certificates, after giving effect to distributions on such Distribution Date and (ii) the Class Principal Amount of the Class [M] Certificates immediately prior to such Distribution Date exceeds (y) the [M] Target Amount.

[M] Target Amount : With respect to any Distribution Date, an amount equal to the lesser of (a) the product of (i) [           ]% and (ii) the Aggregate Pool Balance for such Distribution Date and (b) the amount, if any, by which (i) the Aggregate 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.

Master Servicer : As of the Closing Date, [           ] and thereafter, any successor in interest or assign that meets the requirements of this Agreement. So long as [           ] shall be the Master Servicer, if [           ] shall resign or be terminated as Master Servicer under this Agreement, [           ] shall simultaneously resign or be terminated as Securities Administrator.

Master Servicer Event of Default : Any one of the events, conditions or circumstances enumerated in Section 7.1(f).

Maximum Interest Rate : [With respect to any Distribution Date, an annual rate equal to: (i) in the case of the Class [A] Certificates, 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 Pool 1 Mortgage Loans, exceeds the Servicing Fee 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 allocable to Pool 1 (based on the applicable Pool Percentage)] divided by the Pool Balance for Pool 1 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 allocable to Pool 1 (based on the applicable Pool Percentage)] divided by the Pool Balance for Pool 1 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; (ii) in the case of the Class [A] Certificates, 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 Pool 2 Mortgage Loans, exceeds the Servicing Fee 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 allocable to Pool 2 (based on the applicable Pool Percentage)] divided by the Pool Balance for Pool 2 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 allocable to Pool 2 (based on the applicable Pool Percentage)] divided by the Pool Balance for Pool 2 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; and (iii) in the case of the Class [M] and Class [B] Certificates, an annual rate equal to the weighted average of (a) the Maximum Interest Rate for the Class [A] Certificates, weighted on the basis of the Pool Subordinate Amount for Pool 1, and (b) the Maximum Interest Rate for the Class [A] Certificates, weighted on the basis of the Pool Subordinate Amount for Pool 2.]

 

 

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, of (i) the Pool 1 Monthly Excess Interest and the Pool 2 Monthly Excess Interest for such date, (ii) the Aggregate Overcollateralization Release Amount for such date and (iii) any remaining Principal Distribution Amount from either Mortgage Pool after making the distributions in Section 4.1(d) 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 Custodian on behalf of 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 Trustee pursuant to Section 2.1 or Section 2.3, including without limitation each [Mortgage Loan] [Initial Mortgage Loan and [Subsequent Mortgage Loan][Additional 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 I, which shall identify each Mortgage Loan, as such schedule may be amended from time to time to reflect the addition of Mortgage Loans to [(including the addition of any [Subsequent][Additional] Mortgage Loans)], or the deletion of Mortgage Loans from, the Trust Fund. The Depositor shall be responsible for providing the Master Servicer and the Custodian on behalf of the Trustee with all amendments to the Mortgage Loan Schedule[, including as a consequence of the addition of [Subsequent] [Additional] Mortgage Loans on a Transfer Date].

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

Mortgage Pool : Either of Pool 1 or Pool 2.

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 aggregate of the Interest Remittance Amounts for each Mortgage Pool for such Distribution Date [(as reduced by the sum of the Credit Risk Manager’s Fee)] exceeds (b) the Current Interest payable with respect to the Certificates for such date and (ii) twelve, and the denominator of which is the Aggregate Pool Balance for such Distribution Date, multiplied by (B) a fraction, the numerator of which is thirty and the denominator of which is the greater of thirty and the actual number of days in the immediately preceding calendar month.

Net Funds Cap : The Pool 1 Net Funds Cap, the Pool 2 Net Funds Cap or the Subordinate Net Funds Cap, as the context requires.

Net Liquidation Proceeds : With respect to any Liquidated Mortgage Loan, the related Liquidation Proceeds net of (i) unreimbursed expenses, (ii) unreimbursed 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 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 Servicing Fee 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, as calculated by the Swap Counterparty, which net payment shall not take into account any Swap Termination Payment.]

Net WAC Rate : With respect to any Distribution Date (and the related Accrual Period), a per annum rate equal to the weighted average of the Net Mortgage Rates of the Mortgage Loans as of the first day of the related Collection Period (not including for this purpose Mortgage Loans for which prepayments in full have been received and distributed in the month prior to that Distribution Date).

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 subsequent to the Closing Date 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.

[Non-passive Derivative : A derivative contract that provides the Seller with discretionary options, such as the option to call or put other financial instruments.]

Nonrecoverable Advance : Any portion of any Advance previously made or proposed to be made by or on behalf of 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 Master Servicer, the Securities Administrator, the Custodian, the Servicer, the Trustee, [the Credit Risk Manager], the NIMS Insurer, if any, each Rating Agency and [the Swap Counterparty] are as follows:

 

 

 

 

 

 

 

 

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.

Operative Documents : This Agreement, the Sale Agreement, the Depository Agreement, [the Swap Agreement], the Certificates and each other document contemplated by any of the foregoing to which the Depositor, the Seller, the Master Servicer, the Servicer, the Securities Administrator, the Trustee or the Custodian is a party.

Opinion of Counsel : A written opinion of counsel, reasonably acceptable in form and substance to the Trustee, the Securities Administrator and the NIMS Insurer, if any, and which may be in-house or outside counsel to the Depositor, the Master Servicer, the Trustee or the Securities Administrator 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.

[Original Capitalized Interest Amount: $[         ].]

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 Aggregate Pool Balance for such Distribution Date exceeds (y) the aggregate Class Principal Amount of the Class [A], Class [M] and Class [B] 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 [           ] 20[   ], 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:

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 Class Principal Amounts of the Class [A], Class [M] and Class [B] Certificates 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.

 

 

 

[Passive Derivative : A derivative contract that does not offer any options to the Seller or other parties.]

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 : Initially, the Securities Administrator, and thereafter any subsequent 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 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 : With respect to each Mortgage Pool, the aggregate of the Scheduled Principal Balances of all Mortgage Loans in such Mortgage Pool at the date of determination [plus, during the [Pre-Funding Period] [Revolving Period], the amount of the [Pre-Funding Amount] [Revolving Amount] applicable to such Mortgage Pool which has not been previously applied towards the purchase of [Subsequent Mortgage Loans] [Additional Mortgage Loans].

Pool 1 : The aggregate of the Mortgage Loans identified on the Mortgage Loan Schedule as being included in Pool 1.

 

 

 

Pool 1 Monthly Excess Interest : With respect to any Distribution Date, the amount of any Interest Remittance Amount for Pool 1 remaining after application pursuant to clauses (i) through (xix) of Section 4.1(b) on such date.

Pool 1 Net Funds Cap : [With respect to any Distribution Date and the Class [A] Certificates, a per annum rate equal to (a) a fraction, expressed as a percentage, the numerator of which is the product of (1) (i) the Pool 1 Optimal Interest Remittance Amount for such Distribution Date minus (ii) the lesser of (x) the product of (A) [any Net Swap Payment or Swap Termination Payment (to the extent not due to a Swap Counterparty Trigger Event) owed to the Swap Counterparty for such Distribution Date] and (B) the Pool Percentage for Pool 1 for such Distribution Date and (y) the Pool 1 Optimal Interest Remittance Amount and (2) 12, and the denominator of which is the Pool Balance for Pool 1 as of the first day of the related Collection Account 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.]

Pool 1 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 of the Mortgage Loans in Pool 1 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 Pool 1 as of the first day of the related Collection Period.

Pool 2 : The aggregate of the Mortgage Loans identified on the Mortgage Loan Schedule as being included in Pool 2.

Pool 2 Monthly Excess Interest : With respect to any Distribution Date, the amount of any Interest Remittance Amount for Pool 2 remaining after application pursuant to clauses (i) through (xx) of Section 4.1(c) on such date.

Pool 2 Net Funds Cap : [With respect to any Distribution Date and the Class [A] Certificates, a per annum rate equal to (i) (a) a fraction, expressed as a percentage, the numerator of which is the product of (1) (i) the Pool 2 Optimal Interest Remittance Amount for such Distribution Date minus (ii) the lesser of (x) the product of (A) [any Net Swap Payment or Swap Termination Payment (to the extent not due to a Swap Counterparty Trigger Event) owed to the Swap Counterparty for such Distribution Date] and (B) the Pool Percentage for Pool 2 for such Distribution Date and (y) the Pool 2 Optimal Interest Remittance Amount and (2) 12, and the denominator of which is the Pool Balance for Pool 2 as of the first day of the related Collection Period 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.]

Pool 2 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 of the Mortgage Loans in Pool 2 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 Pool 2 as of the first day of the related Collection Period.

Pool Percentage : With respect to each Mortgage Pool and any Distribution Date, the fraction, expressed as a percentage, the numerator of which is the Pool Balance for such Mortgage Pool for such date and the denominator of which is the Aggregate Pool Balance for such date.

 

 

 

Pool Subordinate Amount : As to any Mortgage Pool and any Distribution Date, the excess of the Pool Balance as of the first day of the preceding calendar month, as reduced by Scheduled Payments due on such day for such Mortgage Pool over the aggregate Class Principal Amount of the Class [A] Certificates (in the case of Pool 1) or the Class Principal Amount of the Class [A] Certificates (in the case of Pool 2), in each case, immediately before such Distribution Date.

Pre Cut-off Date Servicing Advances : None.

[ Pre-Funding Account : The pre-funding account established by the Securities Administrator pursuant to Section [     ].]

[ Pre-Funding Amount : The amount deposited by the Securities Administrator into the Pre-Funding Account on the Closing Date.]

[ Pre-Funding Period : The period beginning on the Closing Date and ending on [      ].]

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 each Mortgage Pool and any Distribution Date, an amount equal to the Principal Remittance Amount for such Mortgage Pool for such date minus the Aggregate Overcollateralization Release Amount, if any, allocable to such Mortgage Pool for such Distribution Date (based on the Pool Percentage).

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 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 each Mortgage Pool and 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 in such Mortgage Pool during the related Collection Period (less unreimbursed Advances due to the Servicer or the Master Servicer with respect to the related Mortgage Loans, to the extent allocable to principal), (ii) all Principal Prepayments in full or in part received during the related Prepayment Period on the Mortgage Loans in such Mortgage Pool, 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 in such Mortgage Pool 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 in such Mortgage Pool 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 in such Mortgage Pool during the related Prepayment Period, to the extent allocable to principal, as reduced by, for each Mortgage Pool, (b) to the extent not reimbursed pursuant to clause (a) above or from amounts allocable to interest on the Mortgage Loans, the product of (i) the applicable Pool Percentage for such Distribution Date and (ii) any costs, expenses or liabilities reimbursable to the Trustee, the Master Servicer, the Securities Administrator, the Custodian and the Servicer to the extent provided in this Agreement or any other Operative Document; and to the extent such amounts allocable to interest on the Mortgage Loans are less than amounts reimbursable to the Trustee pursuant to Section 3.8, the product of (x) the applicable Pool Percentage for such Distribution Date and (y) any amounts reimbursable during the related Anniversary Year to the Trustee therefrom and not reimbursed from such amounts allocable to interest on the Mortgage Loans, or otherwise ( provided, however , that such reimbursable amounts from such amounts allocable to interest or principal on the Mortgage Loans, 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 amounts allocable to principal on the Mortgage Loans for such amounts in subsequent Anniversary Years, but in no event shall such amounts allocable to interest and principal on the Mortgage Loans 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). [On the first Distribution Date after the end of the Revolving Period, the Principal Remittance Amount shall include amounts allocable to principal that were deposited in the Revolving Account during the Revolving Period and not withdrawn to purchase Additional Mortgage Loans.] [On the first Distribution Date after the end of the Pre-Funding Period, the Principal Remittance Amount shall include amounts allocable to principal that were deposited in the Pre-Funding Account during the Pre-Funding Period and not withdrawn to purchase Subsequent Mortgage Loans.]

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 [           ], 20[   ], together with the accompanying prospectus dated [           ], 20[   ], relating to the Class [A], Class [M] and Class [B] Certificates.

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, plus any unreimbursed Servicing Advances, (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, (d) the fair market value of all other property being purchased, (e) any outstanding amounts due to the Master Servicer, the Securities Administrator, the Custodian and the Trustee and (f) [any Swap Termination Payment payable to the Swap Counterparty]. The Servicer (or any other party making Advances, if applicable) shall be reimbursed from the Purchase Price for any Mortgage Loan or related REO Property for any Advances made or other amounts advanced with respect to such Mortgage Loan that are reimbursable to the Servicer under this Agreement (or to the Master Servicer hereunder), together with any accrued and unpaid compensation due to the Servicer or the Master Servicer 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:

 

 

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.

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, (xvii) contains provisions covering the payment of Prepayment Penalties by the Mortgagor for early prepayment of the Mortgage Loan at least as favorable as the Deleted Mortgage Loan and (xviii) for any Mortgage Loan to be substituted into Pool 2, has an original principal balance within the maximum dollar amount limitations prescribed by Freddie Mac for conforming one- to four-family residential mortgage loans. 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], [S&P] and [Fitch].

Rating Agency Condition : With respect to any action to which the Rating Agency Condition applies, that each Rating Agency shall have been given 10 days (or such shorter period as is acceptable to each Rating Agency) prior notice thereof and that each Rating Agency shall have notified the Depositor and the Trustee in writing that such action will not result in a reduction or withdrawal of the then current rating of the rated Certificates.

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 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).

Regulation AB : Regulation AB promulgated under the Securities Act and the Exchange Act, as the same may be amended from time to time; and all references to any rule, item, section or subsection of, or definition or term contained in, Regulation AB mean such rule, item, section, subsection, definition or term, as the case may be, or any successor thereto, in each case as the same may be amended from time to time.

Related Senior Principal Distribution Amount : For each Mortgage Pool and any Distribution Date an amount equal to the lesser of (x) the aggregate Class Principal Amount of the Class [A] Certificates (with respect to Pool 1) or the aggregate Class Principal Amount of the Class [A] Certificates (with respect to Pool 2) immediately prior to that Distribution Date and (y) the product of (a) the Senior Principal Distribution Amount and (b) the related Senior Proportionate Percentage, in each case for such 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 2 Net Funds Cap : For any Distribution Date (and the related Accrual Period) and any Class of Certificates, an amount equal to (i) the weighted average of the interest rates on the Lower Tier Interests in REMIC 2 (other than the Class LT2-IO Interests), weighted in proportion to their Class Principal Amounts as of the beginning of the related Accrual Period, multiplied by (ii) an amount equal to (a) 30, divided by (b) the actual number of days in the Accrual Period.

REMIC 3 : 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.

[REMIC Swap Rate : For each Distribution Date (and the related Accrual Period), a per annum rate equal to the product of: (i) [           ]%, and (ii) the quotient of (a) the actual number of days in the related Accrual Period and (b) 30.]

REO Property : A Mortgaged Property acquired by the Servicer on behalf of 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.

 

 

 

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 or the Securities Administrator, 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 [B], Class X, Class P or Class R Certificate.

[ Revolving Account : The revolving account maintained by the Securities Administrator in which Revolving Deposits are deposited by the Securities Administrator to be used to acquire Additional Mortgage Loans during the Revolving Period.]

[ Revolving Amount : With respect to each Payment Date during the Revolving Period, the total amount of Revolving Deposits deposited in the Revolving Account on such Payment Date.]

[ Revolving Credit Loan : An individual Revolving Credit Loan that is the subject of this Agreement, each Revolving Credit Loan subject to this Agreement being identified on the Revolving Credit Loan Schedule, which Revolving Credit Loan includes without limitation the Revolving Credit Loan documents, the monthly payments, Principal Prepayments, Liquidation Proceeds, condemnation proceeds, Insurance Proceeds, REO disposition proceeds, and all other rights, benefits, proceeds and obligations arising from or in connection with such Revolving Credit Loan.]

[ Revolving Credit Loan Schedule : A schedule of the Revolving Credit Loans setting forth information with respect to such Revolving Credit Loans (including any MERS identification number (if available) with respect to each MERS Mortgage Loan and a Prepayment Penalty schedule), attached hereto as [Schedule I], which may be amended from time to time to include additional mortgage loans which are transferred to the Servicer by a predecessor Servicer.]

[ Revolving Deposits : With respect to any Payment Date during the Revolving Period, all payments that would otherwise be made to Certificateholders in respect of principal [and excess interest] that is deposited in the Revolving Account on such Payment Date.]

 

 

 

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 [(with respect to the Initial Mortgage Loans) or Subsequent Cut-off Date (with respect to the Subsequent mortgage Loans),] after giving effect to principal payments due on or before the Cut-off Date [or Subsequent Cut-off Date, as applicable], whether or not received, less an amount equal to principal payments due after the Cut-off Date [or Subsequent Cut-off Date, as applicable], and on or before the Due Date in the related Collection Period, whether or not received from the Mortgagor or advanced by or on behalf of 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 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 as of the Cut-off Date [or Subsequent Cut-off Date, as applicable], as specified in the Mortgage Loan Schedule.

SEC Rules : As defined in Section 6.5.

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

Securities Administrator : As of the Closing Date, [           ], 20[   ] and thereafter, any successor in interest or assign that meets the requirements of this Agreement. So long as [           ], 20[   ] shall be the Securities Administrator, if [           ], 20[   ] shall resign or be terminated as Securities Administrator under this Agreement, [           ], 20[   ] shall simultaneously resign or be terminated as Master Servicer.

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 Aggregate 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 for both Mortgage Pools 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 lesser of (x) the Principal Distribution Amount for both Mortgage Pools and (y) the amount, if any, by which (x) the aggregate Class Principal Amount of the Class [A] Certificates immediately prior to such Distribution Date exceeds (y) the Senior Target Amount.

Senior Priority : With respect to Pool 1, to the Class [A] Certificates, sequentially, in that order, in reduction of their Class Principal Amounts, until the Class Principal Amount of each such Class has been reduced to zero.

Senior Proportionate Percentage : With respect to Pool 1 and any Distribution Date, the fraction, expressed as a percentage, the numerator of which is the Principal Remittance Amount for Pool 1 for such Distribution Date and the denominator of which is the aggregate of the Principal Remittance Amounts for Pool 1 and Pool 2 for such Distribution Date. With respect to Pool 2 and any Distribution Date, the fraction, expressed as a percentage, the numerator of which is the Principal Remittance Amount for Pool 2 for such Distribution Date and the denominator of which is the aggregate of the Principal Remittance Amounts for Pool 1 and Pool 2 for such Distribution Date.

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

Servicer : [           ] or any successor in interest, or if any successor servicer shall be appointed as herein provided, then such successor servicer.

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

Servicer Remittance Date : The day in each calendar month on which the Servicer is required to remit payments to the Collection Account, which is the 19 ^th day of each calendar month no later than 1:00 p.m. (New York City time) (or, if such 19 ^th day is not a Business Day, the immediately preceding Business Day).

 

 

 

[Servicer Termination Event : So long as [           ] (or an Affiliate of [           ]) remains the Servicer, a Servicer Termination Event shall have occurred if either (a) the Delinquency Rate for any month exceeds 20.00 percent or (b) Cumulative Realized Losses as of any date exceed [           ] percent.]

Servicing Advances : All customary, reasonable and necessary “out of pocket” costs and expenses other than Delinquency 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, (e) any losses sustained by a Servicer with respect to the liquidation of the Mortgaged Property and (f) executing and recording instruments of satisfaction, deeds of reconveyance or Assignments to the extent not recovered from the related borrower or otherwise payable under this Agreement.

Servicing Criteria : The “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time.

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 or Master Servicer, as applicable, involved in, or responsible for, the administration and servicing or master servicing, if applicable, of one or more Mortgage Loans at the time of performance of the relevant activity of the Servicer or Master 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, the Master Servicer and the NIMS Insurer, if any) to assume the servicing of Distressed Mortgage Loans pursuant to Section 3.22 hereof.

[ Specially Serviced Revolving Credit Loan : A Revolving Credit Loan as to which a Servicing Event (as defined in Section 3.11[(n)]) has occurred and is continuing.]

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

Stepdown Date : [The earlier to occur of (a) the Distribution Date on which the aggregate Class Principal Amount of the Class A Certificates has been reduced to zero and (b) the later to occur of (x) the Distribution Date in [           ] 20[   ] 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 [           ]%.]

Subcontractor : Any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the mortgage-backed securities market) of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of the Servicer or a Subservicer.

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

Subordinate Net Funds Cap : With respect to any Distribution Date will equal the weighted average of the Pool 1 Net Funds Cap and the Pool 2 Net Funds Cap, weighted on the basis of the Pool Subordinate Amount for each Mortgage Pool.

[ Subsequent Cut-off Date : The date specified as the Cut-off Date with respect to a [Subsequent Mortgage Loan] [Additional Mortgage Loan] in the related Transfer Supplement, which shall be no later than [      ].]

[ Subsequent Mortgage Loan : A Mortgage Loan that is conveyed as of the Transfer Date to the Trustee by the Depositor pursuant to a Transfer Supplement to the Sale Agreement, which Mortgage Loan shall be identified in such Transfer Supplement as a Subsequent Mortgage Loan and added by the Depositor to the Mortgage Loan Schedule.]

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.

[Subservicer : Aegis Mortgage Corporation or any successor in interest.]

 

 

 

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 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 Supplemental Interest Trust Account], the right to receive the Class X Distributable Amount as provided in Section 4.1(e)(xviii), the Class LT4-I interest in REMIC 4 and the right to receive Class I Shortfalls.]

[Supplemental Interest Trust Account : The account created pursuant to Section 4.7 of this Agreement.]

[Supplemental Interest Trust Amount : With respect to any Distribution Date, the sum of any Net Swap Payment and any Swap Termination Payment deposited into the Supplemental Interest Trust Account.]

[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[           ].]

[Swap Counterparty Trigger Event : A Swap Counterparty Trigger Event shall have occurred if any of a Swap Default with respect to which the Swap Counterparty is a Defaulting Party, a Termination Event with respect to which the Swap Counterparty is the sole Affected Party or an Additional Termination Event with respect to which the Swap Counterparty is the sole Affected Party has occurred.]

[Swap Default : Any of the circumstances constituting an “Event of Default” under the Swap Agreement.]

[Swap LIBOR : With respect to any Distribution Date (and the related Accrual Period), and as calculated by the Swap Counterparty, the product of (i) LIBOR as defined in the Swap Agreement, (ii) two, and (iii) the quotient of (a) the actual number of days in the accrual period for the LIBOR Certificates divided by (b) 30.]

 

 

 

[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 Aggregate 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, $[           ] , (y) on or after the Stepdown Date, and provided that an Overcollateralization Trigger Event is not in effect, the greater of (i) $[           ] and (ii) [           ]% of the Aggregate 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 : Initially, Aegis Mortgage Corporation or its designated affiliate; thereafter, and for each taxable year beginning with the taxable year ending [           ], 20[   ], the holder of the largest Percentage Interest in the Residual Certificates.

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).

[Termination Event : As defined in the Swap Agreement.]

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 aggregate of the Interest Remittance Amounts for such date, (ii) the aggregate of the Principal Remittance Amounts 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.

[ Transfer Date : Any date during the [Pre-Funding Period] [Revolving Period] on which [Subsequent Mortgage Loans] [Additional Mortgage Loans] are conveyed by the Depositor to the Trustee pursuant to Section [      ], as specified in the applicable Transfer Supplement.

[ Transfer Price : With respect to any [Subsequent Mortgage Loan] [Additional Mortgage Loan], the price specified in the Transfer Supplement which shall be no less than the outstanding principal balance of such [Subsequent Mortgage Loan] [Additional Mortgage Loan] as of the Subsequent Cut-off Date specified in the Transfer Supplement.]

 

 

 

[ Transfer Supplement : With respect to each sale of [Subsequent Mortgage Loans] [Additional Mortgage Loans] from the Seller to the Depositor pursuant to the Mortgage Loan Purchase Agreement, the transfer supplement entered into between the Seller and the Depositor, substantially in the form of Exhibit [    ] to the Sale Agreement.

Trigger Event : A Trigger Event shall have occurred with respect to any Distribution Date if (i) a Delinquency Event or (ii) an Overcollateralization Cumulative Loss Trigger Event shall have occurred.

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, [the Pre-Funding Account, the Capitalized Interest Account,] any Insurance Policies, any REO Property and the other items referred to in, and conveyed to the Trustee under, Section 2.1(a).

Trustee : [           ], 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 : The annual fee payable by the Master Servicer on behalf of the Trust Fund to the Trustee from income on funds held in the Collection Account as provided in Section 3.8 and pursuant to the terms of Section II of the separate fee letter agreement for Aegis Asset Backed Securities Trust Mortgage Pass-Through Certificates, Series 20[   ]-[   ], a copy of which has been provided to the Master Servicer and the Securities Administrator.

Trustee Fee Rate : Not applicable..

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

Underwriters : [           ], [           ], [           ] and [           ].

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 applicable Net Funds Cap but limited to a rate no greater than the Maximum Interest Rate).

Upper Tier REMIC : REMIC 3.

 

 

 

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.

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 Master Servicer and then to the Securities Administrator as supplied to the Master Servicer by the Servicer and to the Securities Administrator by the Master Servicer. The Securities Administrator shall not be required to recompute, verify or recalculate the information supplied to it by the Master Servicer or [the Credit Risk Manager].

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. Accrued interest, if any, on the Class X Certificates and each class of Lower Tier Interests shall be calculated based upon a 360-day year consisting of twelve 30-day months.

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.

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES

 

 

(a)   [Initial Mortgage Loans] 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, subject to Section 2.3, in trust, and for the exclusive benefit of the Certificateholders as their respective 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) exclusive of the servicing rights related thereto, 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 delegates its obligations thereunder) 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].

[[ Subsequent Mortgage Loans] [Additional Mortgage Loans] . On each Transfer Date occurring during the [Pre-Funding Period] [Revolving Period], provided that each condition set forth in this Section 2.1(a) is satisfied, the Depositor shall convey to the Trustee, and the Trustee shall purchase pursuant to this Section 2.1(a), all [Subsequent Mortgage Loans] [Additional Mortgage Loans] which satisfy the criteria set forth in this Section 2.1(a) then offered for sale by the Depositor; provided, however , that the related aggregate Transfer Price shall not exceed the [Pre-Funding Amount] [Revolving Amount].

Subject to the conditions set forth in this Section 2.1(a), in consideration of the Securities Administrator’s delivery on the related Transfer Date to the Depositor or its designee, or upon the order of the Depositor, of the Transfer Price for the related [Subsequent Mortgage Loans] [Additional Mortgage Loans] from amounts on deposit in the related [Pre-Funding Account] [Revolving Amount], the Depositor shall, on each Transfer Date, sell, transfer, assign, set over and otherwise convey to the Trustee, without recourse, but subject to the other terms and provisions of this Agreement, all of the right, title and interest of the Depositor in and to each [Subsequent Mortgage Loan] [Additional Mortgage Loan] (including all interest and principal thereon received after the related Subsequent Cut-off Date specified in the Transfer Supplement) identified in the Addition Notice delivered by the Depositor on such Transfer Date and all items in the related Mortgage File. In connection therewith, the Depositor shall amend the Mortgage Loan Schedule to reflect the inclusion of such [Subsequent Mortgage Loan] [Additional Mortgage Loan] in the Mortgage Pool as part of the assets of the Trust Fund. The Depositor shall promptly deliver to the Trustee, the Custodian, the Securities Administrator and the Master Servicer a copy of the Mortgage Loan Schedule as so amended.

Concurrently with the execution and delivery of each Transfer Supplement, the Depositor does hereby assign to the Trustee all of its rights and interest under the Sale Agreement with respect to the [Subsequent Mortgage Loans] [Additional Mortgage Loans] added to the Sale Agreement pursuant to such Transfer Supplement, but only to the extent assigned under the Sale Agreement. The Trustee hereby accepts such assignment, and shall be entitled to exercise all the rights of the Depositor under the Sale Agreement as amended by the related Transfer Supplement as if, for such purpose, it were the Depositor.

 

 

 

The Depositor shall on any Transfer Date transfer to the Trustee the applicable [Subsequent Mortgage Loans] [Additional Mortgage Loans] and the other property and rights related thereto described in the immediately preceding paragraph, as applicable, and the Trustee shall purchase such [Subsequent Mortgage Loans] [Additional Mortgage Loans], property and rights only upon the satisfaction of each of the following conditions on or prior to the related Transfer Date:

[To be added for each transaction with Subsequent Mortgage Loans or Additional Mortgage Loans]

[Concurrently with the execution of this Agreement, the Swap Agreement shall be delivered to the Securities Administrator on behalf of the Trustee. In connection therewith, the Depositor hereby directs the Trustee (solely in its capacity as such) to execute and deliver the Swap Agreement on behalf of, and for the benefit of, the Certificateholders. The Seller, the Master Servicer, the Securities Administrator, the Depositor, the Servicer and the Certificateholders (by their acceptance of such Certificates) acknowledge and agree that the Trustee is executing and delivering the Swap Agreement solely in its capacity as Trustee of the Trust Fund and not in its individual capacity.]

It is agreed and understood by the Depositor and the Trustee (and the Seller 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 (i) a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective November 27, 2003, (ii) a “High-Cost Home Loan” as defined in the New Mexico Home Loan Protection Act effective January 1, 2004, (iii) a “High-Risk Home Loan” as defined in the Illinois High-Risk Home Loan Act effective January 1, 2004, (iv) a “High-Cost Home Mortgage Loan” as defined in the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004, or (v) a “High Cost Home Loan” as defined in the Indiana Home Loan Practices Act effective January 1, 2005.

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

 

 

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 Custodian on behalf of the Trustee as promptly as possible upon receipt thereof and, in any event, within 720 days following the Closing Date [(or, in the case of [Subsequent] [Additional] Mortgage Loan, the Transfer Date)]. The Depositor or the Servicer shall forward or cause to be forwarded to the Custodian on behalf of the Trustee (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. 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 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 Custodian on behalf of the Trustee 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 [(or, in the case of [Subsequent] [Additional] Mortgage Loan, the Transfer 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.

 

 

 

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 [(or, in the case of [Subsequent] [Additional] Mortgage Loan, the Transfer Date)], the Depositor, in lieu of delivering the above documents to the Custodian on behalf of the Trustee, will deposit in the Custodial Account the portion of such payment that is required to be deposited in the Custodial Account pursuant to Section 3.5 hereof.

The Seller shall at its expense deliver to the Servicer copies of all trailing documents required to be included in the Mortgage File at the same time the originals or certified copies thereof are delivered to the Custodian on behalf of the Trustee, such documents to include but not be limited to the mortgagee policy of title insurance and any mortgage loan documents upon their return from the recording office.

Subject to the provisions of Section 2.1, the Trustee acknowledges receipt of the assets transferred by the Depositor of the assets included in the Trust Fund and has directed that the documents referred to in Section 2.1 and all other assets included in the definition of “Trust Fund” be delivered to the Custodian on behalf of the Trustee.

The Custodian, by execution and delivery, hereof, and 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 the Custodian declares that it holds and will hold such documents and the other documents delivered to it constituting the Mortgage Files, and that 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 Custodian agrees to execute and deliver on the Closing Date [(or, in the case of [Subsequent] [Additional] Mortgage Loan, the Transfer Date)] to the Depositor, the Seller, the Master Servicer, the Servicer and the NIMS Insurer, if any, an Initial Certification in the form annexed hereto as Exhibit C. Based on 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 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 [(or, in the case of [Subsequent] [Additional] Mortgage Loan, the Transfer Date)], the Custodian shall deliver to the Depositor, the Seller, the Master Servicer, 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 Custodian may transmit such exceptions electronically (via email) to the Depositor, the Seller, the Master Servicer, the Servicer, the Trustee and the NIMS Insurer, if any, subject to the prior approval of the Depositor, the Seller, the Master Servicer, the Servicer, the Trustee and the NIMS Insurer, if any.

If, in the course of such review, 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 Custodian shall 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, 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 the 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 Deposit 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 Custodian shall 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 Custodian on behalf of the Trustee, 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 the 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 the Seller.

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

(a)   The Servicer represents and warrants to the Master Servicer, the Securities Administrator, 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 :

 

 

(b)   The Master Servicer hereby represents and warrants to the Servicer, 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:

 

 

 

 

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

 

 

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

 

 

(e)   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.

(f)   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 or 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, however , that any such substitution pursuant to clause (i) above shall not be effected prior to the delivery to the Trustee and the Securities Administrator 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 Custodian on behalf of the Trustee 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 the 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 the 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 Custodian on behalf of the Trustee 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 the 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 Custodian on behalf of the Trustee, the Master Servicer 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 Custodian shall release the Mortgage File held for the benefit of the Certificateholders relating to such Deleted Mortgage Loan to the Seller and the Trustee 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 the Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will determine the amount (if any) 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 the Seller on or before the Deposit 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 the 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 the 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 Custodian on behalf of the Trustee shall release the related Mortgage File held for the benefi