AEGIS ASSET BACKED SECURITIES CORPORATION, Depositor AEGIS MORTGAGE CORPORATION, Seller CHASE MANHATTAN MORTGAGE CORPORATION, Servicer THE MURRAYHILL COMPANY, Credit Risk Manager, and WELLS FARGO BANK, N.A., Trustee

Exhibit 4.1

AEGIS ASSET BACKED SECURITIES CORPORATION,

Depositor

AEGIS MORTGAGE CORPORATION,

Seller

CHASE MANHATTAN MORTGAGE CORPORATION,

Servicer

THE MURRAYHILL COMPANY,

Credit Risk Manager,

and

▇▇▇▇▇ FARGO BANK, N.A.,

Trustee

POOLING AND SERVICING AGREEMENT

Dated as of June 1, 2004

AEGIS ASSET BACKED SECURITIES TRUST

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-3

TABLE OF CONTENTS

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SCHEDULES

EXHIBITS

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

WITNESSETH THAT

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

PRELIMINARY STATEMENT

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

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

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

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

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

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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”):

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4

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

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

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

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

REMIC 2:

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

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8

9

10

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

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

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

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

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

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

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

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

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

REMIC 3:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

REMIC 4:

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

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

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

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

Certificates:

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

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23

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

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

ARTICLE I

DEFINITIONS

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

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

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

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

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

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

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

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

     Advance Facility: As defined in Section 3.20.

     Advance Facility Counterparty: As defined in Section 3.20.

     Advance Reimbursement Rights: As defined in Section 3.20.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     Bulk PMI Policy: Not applicable.

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

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

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

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

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

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

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

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

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

     Certification: As defined in Section 8.12.

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

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

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

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

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

     Class Notional Amount: Not applicable.

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

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

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

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

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

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

     Closing Date: July 2, 2004.

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

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

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

     Commission: The United States Securities and Exchange Commission.

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

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

     Conventional Loan Documents: None.

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

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

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

     Cooperative Shares: Shares issued by a Cooperative Corporation.

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

     Corporate Trust Office: For purposes of Certificate transfers and surrender is located at ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services (AEGIS 2004-3) and for all other purposes is located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services (AEGIS 2004-3) or for overnight deliveries, at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Services (AEGIS 2004-3).

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

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

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

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

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

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

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

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

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

     Cut-off Date: June 1, 2004.

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

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

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

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

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

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

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

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

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

     Depositor: Aegis Asset Backed Securities Corporation, a Delaware corporation having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, 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.

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

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

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

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

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

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

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

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

     Eligible Institution: Any of the following:

     (i) an institution whose:

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

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

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

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

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

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

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

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

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

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

     (vi) a Qualified GIC;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     Initial LIBOR Rate: 1.36875%.

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

     Insurance Fee Rate: Not applicable.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     Lower Tier Interest: As provided in the Preliminary Statement.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     Mortgage Loan Documents: As defined in Section 2.1 hereof.

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

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

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

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

     Mortgagor: The obligor on a Mortgage Note.

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

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

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

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

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

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

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

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

     NIMS Insurer: Not applicable.

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

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

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

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

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

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     Notional Amount: Not applicable.

     Notional Certificate: Not applicable.

     Offering Document: The Prospectus.

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

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

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

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

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

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

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

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

     Paying Agent: Any paying agent appointed by the Trustee.

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

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

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

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

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

     PMI Insurance Premium: Not applicable.

     PMI Insurer: Not applicable.

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

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

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

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

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

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

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

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

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

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

     Private Certificate: Not applicable.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     REMIC 1: As described in the Preliminary Statement.

     REMIC 2: As described in the Preliminary Statement.

     REMIC 3: As described in the Preliminary Statement.

     REMIC 4: As described in the Preliminary Statement.

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

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

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

     Required Recordation States: The states of Florida and Mississippi.

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

     Residual Certificates: The Class R Certificates.

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

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

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

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

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

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

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

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

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

     Seller: Aegis Mortgage Corporation or any successor in interest.

     Senior Certificate: Any Class A Certificate.

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

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

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

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

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

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

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

     Servicing Fee Rate: 0.50% per annum.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     Transferee Affidavit: As defined in Section 5.2.

     Transferor Affidavit: As defined in Section 5.2.

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

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

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

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

     Trustee Fee Rate: 0.009% per annum.

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

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

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

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

     Upper Tier REMIC: REMIC 4.

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

     Section 1.2 Calculations Respecting Mortgage Loans.

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

     Section 1.3 Calculations Respecting Accrued Interest.

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

     Section 1.4 Rights of the NIMS Insurer.

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

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ARTICLE II

CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES

     Section 2.1 Conveyance of Mortgage Loans.

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

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

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

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

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

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

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

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

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

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

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

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

     (B) The executed Security Agreement;

     (C) The executed Proprietary Lease;

     (D) The executed Recognition Agreement;

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

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

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

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

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

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

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

     Section 2.2 Acceptance by Trustee of the Mortgage Loans.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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