<PAGE>
EXHIBIT 99.1
EXECUTION
================================================================================
AEGIS REIT CORPORATION,
SELLER
and
AEGIS ASSET BACKED SECURITIES CORPORATION,
DEPOSITOR
SALE AGREEMENT
Dated as of October 1, 2006
Aegis Asset Backed Securities Trust 2006-1
(Mortgage Backed Notes)
================================================================================
<PAGE>
TABLE OF CONTENTS
Section 1. Sale and
Purchase of Mortgage Loans.............................
2
Section 2. Purchase
Price of Mortgage Loans................................
2
Section 3. Transfer of
the Mortgage Loans.................................. 2
Section 4.
Representations and Warranties of the Seller....................
4
Section 5. Covenants
of the Seller......................................... 6
Section 6. Cure,
Repurchase and Substitution Obligations...................
6
Section 7. Conditions
to Obligation of the Depositor....................... 7
Section 8. Mandatory
Delivery; Grant of Security Interest.................. 8
Section 9.
Indemnification.................................................
9
Section 10.
Notices........................................................
9
Section 11. Severability of
Provisions..................................... 10
Section 12. Governing
Law.................................................. 11
Section 13. Agreement of the
Seller........................................ 11
Section 14.
Survival.......................................................
11
Section 15.
Assignment.....................................................
11
Section 16.
Miscellaneous..................................................
11
Section 17. Request for
Opinions........................................... 13
Section 18.
Guaranty.......................................................
13
Schedule I
Mortgage Loans
Exhibit A
Representations and Warranties of Aegis REIT Corporation
i
<PAGE>
SALE AGREEMENT
This
SALE AGREEMENT dated as of October 1, 2006 (this "Agreement"), is
by
and between Aegis Asset Backed Securities Corporation, a Delaware
corporation
(the "Depositor") and Aegis REIT Corporation, a Maryland
corporation (the
"Seller").
RECITALS
(1)
Schedule I attached hereto and made a part hereof lists a pool of
one-
to four-family, fully amortizing and balloon mortgage loans
(collectively, the
"Mortgage Loans") currently owned by the Seller that the Seller
desires to sell
to the Depositor.
(2)
The Depositor desires to purchase the Mortgage Loans from the
Seller
and intends immediately thereafter to transfer the Mortgage Loans
and any other
assets constituting the Trust Estate, and assign all its rights and
delegate all
of its obligations under this Agreement, to Aegis Asset Backed
Securities Trust
2006-1 (the "Trust" or the "Issuer") pursuant to the terms of a
transfer and
servicing agreement dated as of October 1, 2006 (the "Transfer and
Servicing
Agreement"), among the Issuer, the Depositor, the Seller, Wells
Fargo Bank,
N.A., as master servicer (in such capacity, the "Master Servicer")
and as
administrator (in such capacity, the "Administrator"), Ocwen Loan
Servicing,
LLC, as servicer (the "Servicer") and Deutsche Bank National Trust
Company, as
indenture trustee (in such capacity, the "Indenture Trustee") and
as custodian
(in such capacity, the "Custodian"). The Trust will in turn pledge
the Trust
Estate and all such rights and obligations to the Indenture Trustee
for the
benefit of the Noteholders.
(3)
The Trust will be formed pursuant to a trust agreement dated as
of
October 1, 2006 (the "Trust Agreement"), among the Depositor, the
Administrator
and Wilmington Trust Company, as owner trustee (the "Owner
Trustee"). The Issuer
(i) pursuant to an indenture dated as of October 1, 2006 (the
"Indenture"),
among the Issuer, the Administrator and the Indenture Trustee, will
issue the
Aegis Asset Backed Securities Trust 2006-1 Mortgage Backed Notes
(the "Notes")
and (ii) pursuant to the Trust Agreement will issue a single
ownership
certificate (the "Ownership Certificate," and together with the
Notes, the
"Securities").
(4)
The Securities to be delivered to the Depositor or its
designee(s),
registered in such names as the Depositor shall designate, will be
designated as
(i) the Aegis Asset Backed Securities Trust 2006-1 Mortgage Backed
Notes, Class
A1, Class A2, Class A3, Class M1, Class M2, Class M3, Class M4,
Class M5, Class
M6, Class M7, Class M8, Class M9, Class M10, Class N and (ii) the
Aegis Asset
Backed Securities Trust 2006-1 Ownership Certificate.
(5)
Capitalized terms used and not defined herein shall have the
meanings
assigned to them in the Transfer and Servicing Agreement.
AGREEMENT
NOW
THEREFORE, in consideration of the mutual promises herein made
and
other good and valuable consideration, the receipt and adequacy of
which are
hereby acknowledged, the parties hereby agree as follows:
<PAGE>
Section 1. Sale and Purchase of Mortgage Loans.
(a) Subject to the terms and conditions of this Agreement, the
Seller
agrees to sell, and the Depositor agrees to purchase, on the date
of issuance of
the Securities, which is expected to be on or about October 30,
2006 (the
"Closing Date"), the Mortgage Loans (exclusive of the servicing
rights related
thereto) having an aggregate principal balance as of October 1,
2006 (the
"Cut-off Date"), of $525,007,504.36.
(b) The Seller and the Depositor have agreed upon which of the
mortgage loans owned by the Seller are to be purchased by the
Depositor pursuant
to this Agreement, and the Seller has prepared, or has provided
information to
the Depositor enabling the Depositor to prepare, Schedule I
attached hereto
("Schedule I"), setting forth information with respect to the
Mortgage Loans to
be purchased by the Depositor as of the Closing Date. The Seller
shall, with the
Depositor's consent, amend or modify, or provide information to the
Depositor
enabling the Depositor to amend or modify Schedule I on or prior to
the Closing
Date if necessary to reflect the actual Mortgage Loans transferred
by the Seller
and accepted by the Depositor on the Closing Date. Schedule I, as
so amended or
modified, shall conform to the requirements of the Depositor as set
forth in
this Agreement and to the definition of "Mortgage Loan Schedule"
under the
Transfer and Servicing Agreement, and shall be the definitive
Mortgage Loan
Schedule attached as an exhibit to the Transfer and Servicing
Agreement.
Section 2. Purchase Price of Mortgage Loans.
(a) On the Closing Date, as full consideration for the Seller's
sale
of the Mortgage Loans to the Depositor, the Depositor shall deliver
to the
Seller cash and Securities equal to $531,938,352.06.
(b) The Depositor or any assignee or transferee of the
Depositor
(which may include the Issuer, acting on behalf of the Noteholders)
shall be
entitled to all Scheduled Payments due after the Cut-off Date, and
all
curtailments or other principal prepayments received with respect
to the
Mortgage Loans paid by each borrower after the Cut-off Date, except
that the
Depositor or any assignee or transferee of the Depositor will not
be entitled to
any curtailments or other prepayments received on or after the
Cut-off Date but
reflected in the aggregate Cut-off Date Balance. All Scheduled
Payments due on
or before the Cut-off Date and collected on or after the Cut-off
Date shall
belong to the Seller.
(c) Pursuant to the Transfer and Servicing Agreement, the
Depositor
will transfer and assign all its right, title and interest in and
to the
Mortgage Loans and any other assets constituting the Trust Estate
to the Issuer
in consideration of the issuance of the Securities to the Depositor
or its
designee(s).
Section 3. Transfer of the Mortgage Loans.
(a) Mortgage File. For purposes of this Agreement, the "Mortgage
File"
will be as defined in the Transfer and Servicing Agreement.
2
<PAGE>
(b) Transfer of Ownership. Upon the sale of any Mortgage Loans,
the
ownership of each Mortgage Loan Document with respect thereto shall
be vested in
the Depositor, and the ownership of all other records and documents
with respect
thereto prepared by or which come into the possession of the Seller
shall
immediately vest in the Depositor. The Seller shall, upon the
direction of the
Depositor, promptly deliver to the Custodian or such other designee
as the
Depositor may direct, any documents that come into its possession
with respect
to such Mortgage Loans following such sale. Prior to such delivery,
the Seller
shall hold any such documents for the benefit of the Depositor, its
successors
and assigns.
(c) Delivery of Mortgage Files. To the extent not previously
delivered
to the Depositor or a designee of the Depositor, the Seller shall,
not later
than two Business Days prior to the Closing Date, at the direction
of the
Depositor, deliver to the Custodian, each of the Mortgage Loan
Documents
required to be included in the Mortgage File. The Mortgage Note for
each such
Mortgage Loan shall be endorsed in blank or as otherwise directed
by the
Depositor, and the Mortgage for each such Mortgage Loan shall name
the
Depositor, the Custodian or such other party as designated by the
Depositor as
mortgagee or beneficiary, as appropriate, or be assigned in blank
or as
otherwise directed by the Depositor.
Prior to the transfer and sale of any Mortgage Loans, the Mortgage
Loan
Documents delivered to the Custodian shall be held by the Custodian
for the
benefit of the Seller and the possession by the Custodian of such
Mortgage Loan
Documents will be at the will of the Seller and will be in a
custodial capacity
only. Following the transfer and sale of any Mortgage Loans from
the Seller to
the Depositor in accordance with the terms and upon satisfaction of
the
conditions of this Agreement, the Custodian will hold all Mortgage
Loan
Documents delivered to it hereunder for the benefit of the
Depositor, as its
agent and bailee. The Custodian will act as a custodian for the
receipt and
custody of all Mortgage Files and, after the transfer of any
Mortgage Loans from
the Depositor to the Trust, the Custodian will hold all Mortgage
Loan Documents
delivered to it hereunder for the benefit of the Trust and on
behalf of the
Noteholders.
(d) Examination of Mortgage Loan Documents: Acceptance of
Mortgage
Loans. To the extent not previously delivered to the Depositor or a
designee of
the Depositor, the Seller shall, prior to the Closing Date, either
(i) deliver
to the Depositor or its designee in escrow, for examination, the
Mortgage Loan
Documents pertaining to each Mortgage Loan then being sold by it or
(ii) make
such Mortgage Loan Documents available to the Depositor or its
designee for
examination at the Seller's offices or at such other place as the
Seller shall
specify. Any such Mortgage Loan Documents so held by the Seller and
so made
available to the Depositor or its designee shall be held by the
Seller and so
made available solely as a matter of convenience to the Depositor
or its
designee and in lieu of delivering such Mortgage Loan Documents to
the Depositor
or its designee. The Depositor, the Custodian or a designee of
either entity may
review the Mortgage Loan Documents to verify that all documents
required to be
included in each Mortgage File (as such term has been defined in
the Transfer
and Servicing Agreement) are so included.
Prior to the Closing Date, the Seller shall cause the Custodian to
review
the documents delivered pursuant to Section 3(c) hereof to
ascertain that, as to
each Mortgage Loan listed on
3
<PAGE>
Schedule I, (i) all documents required to be delivered by the
Seller pursuant to
Section 3(c) have been received, (ii) such documents appear regular
on their
face and relate to such Mortgage Loan and (iii) the information on
Schedule I
accurately reflects the information set forth in the corresponding
Mortgage
File, to the extent required by Section 2.1 of the Transfer and
Servicing
Agreement. An additional review shall be conducted by the Custodian
or its
designee prior to the first anniversary of the Closing Date to
determine that
all Mortgage Loan Documents required to be included in the Mortgage
File are
included therein. If at any time the Depositor or the Custodian
discovers or
receives notice that any Mortgage Loan Document is missing or
defective in any
material respect with respect to any Mortgage Loan, the Seller
shall correct or
cure any such omission or defect or, if such omission or defect
materially
impairs the value of the Mortgage Loan, repurchase the defective
Mortgage Loan
or substitute for such defective Mortgage Loan a Qualified
Substitute Mortgage
Loan in accordance with and if permitted by the terms of Section 6
hereof. At
the time of such repurchase or substitution, the Custodian shall
release
documents in its possession relating to such Mortgage Loan to the
Seller. The
fact that the Depositor, the Indenture Trustee or a designee of
either entity
has conducted or has failed to conduct any partial or complete
examination of
the Mortgage Loan Documents prior to the Closing Date shall not
affect the
rights of the Depositor (or any assignee or successor thereof) to
demand
repurchase or other relief as provided herein.
(e) Recordation of Assignments of Mortgage. Subject to the sale of
the
Mortgage Loans by the Seller to the Depositor, the Depositor hereby
authorizes
and instructs the Seller, and the Seller hereby agrees, to record
all
Assignments required to be contained in the Mortgage File to the
extent required
pursuant to Section 2.1 of the Transfer and Servicing Agreement.
All recording
fees relating to the recordation of the Assignments as described
above shall be
paid by the Seller. With respect to any Non-MERS Mortgage Loans, if
the
Indenture Trustee does not receive, within the time specified in
the Transfer
and Servicing Agreement, evidence satisfactory to it of such
recording with
respect to any Mortgage Loan in a Required Recordation State, the
Seller shall,
in cooperation with the Indenture Trustee, correct or cure any such
omission or
repurchase the affected Mortgage Loan within 90 days of such
demand, which
demand shall be made within the time specified in the Transfer and
Servicing
Agreement (including any such extensions provided for therein).
Section 4. Representations and Warranties of the Seller.
The
Seller hereby represents and warrants to the Depositor as
follows:
(a) The
Seller has been duly incorporated and is validly existing and
in good standing under the laws of the State of Maryland and is
duly qualified
to do business and in good standing under the laws of each
jurisdiction that
requires such qualification wherein it owns or leases any material
properties
(except where the failure so to qualify would not have a material
adverse effect
on it). The Seller has the full corporate power and authority to
own its
properties and conduct its business as currently conducted.
(b) The Seller has the full power, authority (corporate and other)
and
legal right to execute and deliver, engage in the transactions
contemplated by,
and perform and observe the terms and conditions of, this
Agreement.
4
<PAGE>
(c) This Agreement has been duly and validly authorized, executed
and
delivered by the Seller and (assuming the due authorization,
execution and
delivery hereof by the Depositor) constitutes the valid, legal and
binding
agreement of the Seller, enforceable in accordance with its terms,
subject to
bankruptcy, insolvency, receivership, conservatorship,
reorganization,
moratorium and other laws affecting creditors' rights generally and
to general
principles of equity, regardless of whether such enforcement is
sought in a
proceeding in equity or at law and except that the provisions of
indemnity
contained herein may be unenforceable as against public policy.
(d) No consent, approval, authorization or order of or registration
or
filing with, or notice to, any governmental authority or court is
required,
under federal laws or the laws of the State of Maryland, for the
execution,
delivery and performance of or compliance by the Seller with this
Agreement or
the consummation by the Seller of the transactions contemplated
hereby.
(e) None of the execution and delivery of this Agreement by the
Seller, the consummation by the Seller of the transactions herein
contemplated,
or compliance with the provisions hereof by the Seller, will (i)
conflict with
or result in a breach of, or constitute a default under, any of the
provisions
of the Seller's charter or by-laws, or any law, governmental rule
or regulation,
or any judgment, decree or order binding on the Seller or any of
its properties,
or any of the provisions of any indenture, mortgage, deed of trust,
contract or
other instrument to which the Seller is a party or by which it is
bound or (ii)
result in the creation or imposition of any lien, charge or
encumbrance upon any
of its properties.
(f) To the Seller's knowledge, there is no litigation pending
or
threatened against the Seller that would reasonably be expected to
materially
and adversely affect the execution, delivery, performance or
enforceability of
this Agreement.
(g) Each of the representations and warranties set forth in Exhibit
A
hereto is true and correct with respect to the Mortgage Loans as of
the Closing
Date.
(h) The statistical information in the preliminary prospectus
supplement dated October 20, 2006 (the "Preliminary Prospectus
Supplement) and
the prospectus supplement dated October 24, 2006 (the "Prospectus
Supplement"),
to the prospectus dated October 20, 2006, under the headings
"Description of the
Mortgage Pool--General," "-- Certain Characteristics of the
Mortgage Loans,"
"--Adjustable Rate Mortgage Loans," "Additional Information" and
"Underwriting
Standards" is true and correct.
(i) The Seller has been organized in conformity with the
requirements
for qualification as a real estate investment trust (a "REIT"); the
Seller has
filed with its federal income tax return for its taxable year
ending December
31, 2004, an election to be treated as a REIT for federal income
tax purposes;
and the Seller currently qualifies as, and it proposes to operate
in a manner
that will enable it to continue to qualify as, a REIT.
5
<PAGE>
Section 5. Covenants of the Seller.
The
Seller hereby covenants with the Depositor as follows:
(a) On or before the Closing Date, it shall take all steps required
of
it to effectuate the transfer of the Mortgage Loans to the Issuer,
as transferee
of the Depositor, free and clear of any lien, charge or
encumbrance.
(b) The Seller shall use its best efforts to make available to
counsel
for the Depositor in executed form each of the documents listed in
Section 7(b)
below no later than two Business Days before the Closing Date, it
being
understood that such documents are to be released and delivered
only on the
closing of the transaction contemplated hereby and the sale of the
Securities.
(c) The Seller shall deliver or cause to be delivered to the
Depositor
(i) an Opinion of Counsel as to various corporate matters
substantially in a
form satisfactory to the Depositor and (ii) such other Opinions of
Counsel, if
any, as are required by any Rating Agency for the issuance of the
ratings on the
Notes specified in Section 7(d) below.
(d) For federal income tax purposes, the Seller will treat the
transfer of the Mortgage Loans as a sale.
Section 6. Cure, Repurchase and Substitution Obligations.
(a) Each of the representations and warranties of the Seller
contained
herein shall survive the purchase by the Depositor of any of the
Mortgage Loans
and shall continue in full force and effect, notwithstanding any
restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding
subsequent
termination of this Agreement or the Transfer and Servicing
Agreement. The
representations and warranties shall not be impaired by any review
and
examination of Mortgage Loan Documents or other documents
evidencing or relating
to the Mortgage Loans or any failure on the part of the Depositor
to review or
examine such documents and shall inure to the benefit of the Issuer
(as the
assignee of the Depositor) for the benefit of the Noteholders and
the Custodian.
With respect to the representations and warranties contained herein
that are
made to the best of the Seller's knowledge or as to which the
Seller has no
knowledge, if it is discovered by the Seller, the Depositor, the
Custodian or
the Indenture Trustee that the substance of any such representation
and warranty
is inaccurate and such inaccuracy materially and adversely affects
the value of
the related Mortgage Loan, then notwithstanding the Seller's
knowledge or lack
of knowledge with respect to the inaccuracy of such representation
and warranty
at the time it was made, the Seller shall take the action described
in the
following paragraph in respect of such Mortgage Loan.
(b) Upon discovery or receipt of notice by the Seller, the
Depositor,
the Indenture Trustee or the Custodian of any missing or materially
defective
document in any Mortgage File, or a breach of any of the
Seller's
representations and warranties set forth in Section 4 hereof with
respect to any
Mortgage Loan, which in any of the foregoing cases materially and
adversely
affects the value of any Mortgage Loan or the interest therein of
the Depositor,
the Indenture
6
<PAGE>
Trustee or the Noteholders, the party discovering or receiving
notice of such
missing or materially defective document, breach, or default shall
give prompt
written notice to the others. Upon its discovery or its receipt of
notice of any
such missing or materially defective document, breach or default
(the "Defect
Discovery Date"), the Seller shall either (a) within 90 days of
discovery or
receipt of such notice, provide the Custodian with such missing
documents or
cure such defect, breach or default, in all material respects or
(b) within 90
days of such discovery or receipt of such notice, either repurchase
the affected
Mortgage Loan at the purchase price therefor or cause the removal
of such
Mortgage Loan from the Trust Estate (in which case it shall become
a Deleted
Mortgage Loan) and substitute therefor one or more Qualified
Substitute Mortgage
Loans as defined in the Transfer and Servicing Agreement; provided,
however,
that any such substitution shall occur within two years of the
Closing Date. The
Indenture Trustee or its designee shall amend the Mortgage Loan
Schedule to
reflect the withdrawal of any Mortgage Loan from the terms of this
Agreement and
the Transfer and Servicing Agreement and the addition, if any, of a
Qualified
Substitute Mortgage Loan. In order to effect a substitution
pursuant to this
Section, the Seller will deliver (i) to the Custodian each of the
Mortgage Loan
Documents required to be contained in the Mortgage File with
respect to the
Substitute Mortgage Loan(s) and (ii) if the aggregate Scheduled
Principal
Balance on the date of substitution of the Qualified Substitute
Mortgage Loan(s)
is less than the aggregate Scheduled Principal Balance of the
Deleted Mortgage
Loan(s) (after application of Scheduled Payments due in the month
of
substitution), to the Trust cash in an amount equal to such
Substitution
Adjustment Amount. Any repurchase pursuant to this Section shall be
accomplished
by the delivery into the Custodial Account, or at the direction of
the
Depositor, on (or determined as of) the last day of the calendar
month in which
such repurchase is made, of the purchase price for the Mortgage
Loans to be
repurchased.
(c) The obligations of the Seller set forth in this Agreement to
cure
or to repurchase a materially defective Mortgage Loan or to
substitute a
Qualified Substitute Mortgage Loan for such Mortgage Loan and to
indemnify the
Depositor and others as provided in this Agreement constitute the
sole remedies
of the Depositor and the Issuer against the Seller respecting a
defective
document in any Mortgage File or a breach of representations and
warranties of
the Seller set forth in Section 4 hereof.
Section 7. Conditions to Obligation of the Depositor.
The
obligation of the Depositor hereunder to purchase the Mortgage
Loans is
subject to:
(a) The representations and warranties of the Seller under this
Agreement (exclusive of Exhibit A hereto) shall be accurate in all
material
respects as of the Closing Date, and no event shall have occurred
which, with
notice or the passage of time, would constitute a default under
this Agreement;
(b) The Depositor shall have received, or the Depositor's
attorneys
shall have re
