<PAGE>
Exhibit 4.1
================================================================================
FREMONT MORTGAGE SECURITIES CORPORATION,
as Depositor,
FREMONT INVESTMENT & LOAN,
as Originator and Servicer,
WELLS FARGO BANK, N.A.,
as Master Servicer and Trust Administrator,
and
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
----------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 2005
----------
FREMONT HOME LOAN TRUST 2005-E
MORTGAGE-BACKED CERTIFICATES,
SERIES 2005-E
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S>
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ARTICLE I
DEFINITIONS...................................................................
8
Section 1.01.
Definitions............................................................
8
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES................. 61
Section 2.01. Conveyance of Mortgage
Loans........................................... 61
Section 2.02. Acceptance by the
Trustee or Trust Administrator of the Mortgage
Loans..................................................................
65
Section 2.03. Representations,
Warranties and Covenants of the Originator and the
Servicer...............................................................
66
Section 2.04. Delivery of Opinion of
Counsel in Connection with Substitution;
Non-Qualified
Mortgages................................................
69
Section 2.05. Execution and Delivery
of Certificates................................. 69
Section 2.06. Representations and
Warranties of the Depositor........................ 69
Section 2.07. Representations,
Warranties and Covenants of the Servicer, the
Originator and the Master
Servicer..................................... 71
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS.............................. 76
Section 3.01. Servicer to Service
Mortgage Loans..................................... 76
Section 3.02. Subservicing
Agreements between the Servicer and Subservicers..........
78
Section 3.03. Successor
Subservicers.................................................
79
Section 3.04. Liability of the
Servicer.............................................. 79
Section 3.05. No Contractual
Relationship between Subservicers and the Trustee,
Master Servicer, Trust Administrator or
Certificateholder.............. 80
Section 3.06. Assumption or
Termination of Subservicing Agreements by Trustee or
Trust
Administrator....................................................
80
Section 3.07. Collection of Certain
Mortgage Loan Payments........................... 81
Section 3.08. Subservicing
Accounts..................................................
82
Section 3.09. Collection of Taxes,
Assessments and Similar Items; Escrow Accounts.... 82
Section 3.10. Collection
Account.....................................................
83
Section 3.11. Withdrawals from the
Collection Account................................ 84
Section 3.12. Investment of Funds in
the Collection Account and the Distribution
Account................................................................
86
Section 3.13. Maintenance of Hazard
Insurance, Errors and Omissions and Fidelity
Coverage...............................................................
87
Section 3.14. Enforcement of
Due-on-Sale Clauses; Assumption Agreements..............
89
Section 3.15. Realization upon
Defaulted Mortgage Loans.............................. 90
Section 3.16. Release of Mortgage
Files.............................................. 91
Section 3.17. Title, Conservation
and Disposition of REO Property.................... 92
Section 3.18. Notification of
Adjustments............................................
94
Section 3.19. Access to Certain
Documentation and Information Regarding the Mortgage
Loans..................................................................
94
</TABLE>
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Pooling & Servicing Agreement
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<TABLE>
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Section 3.20. Documents, Records and
Funds in Possession of the Servicer to Be Held
for the
Trustee........................................................
94
Section 3.21. Servicing
Compensation.................................................
95
Section 3.22. Annual Statement as to
Compliance...................................... 95
Section 3.23. Annual Independent
Public Accountants' Servicing Statement; Financial
Statements.............................................................
96
Section 3.24. Master Servicer to Act
as Servicer..................................... 96
Section 3.25. Compensating
Interest..................................................
97
Section 3.26. Credit Reporting;
Gramm-Leach-Bliley Act............................... 97
Section 3.27. Net WAC Rate Carryover
Reserve Account; Distribution Account........... 97
Section 3.28. Optional Purchase of
Delinquent Mortgage Loans......................... 99
Section 3.29. REMIC-Related
Covenants................................................
99
Section 3A.01 Master
Servicer........................................................
100
Section 3A.02 REMIC-Related
Covenants................................................
100
Section 3A.03 Monitoring of
Servicer.................................................
102
Section 3A.04 Fidelity
Bond..........................................................
103
Section 3A.05 Power to Act;
Procedures...............................................
103
Section 3A.06 Due-on-Sale Clauses;
Assumption Agreements............................. 103
Section 3A.07 Documents, Records and
Funds in Possession of Master Servicer To Be
Held for
Trustee.......................................................
103
Section 3A.08
[RESERVED].............................................................
104
Section 3A.09 Compensation for the
Master Servicer................................... 104
Section 3A.10 Annual Officer's
Certificate as to Compliance.......................... 104
Section 3A.11 Annual Independent
Accountant's Servicing Report....................... 105
Section 3A.12 Obligation of the
Master Servicer in Respect of Prepayment Interest
Shortfalls.............................................................
106
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE
SERVICER................................... 106
Section 4.01.
Advances...............................................................
106
Section 4.02. Priorities of
Distribution.............................................
107
Section 4.03. Monthly Statements to
Certificateholders............................... 118
Section 4.04. Certain Matters
Relating to the Determination of LIBOR.................
122
Section 4.05. Allocation of Realized
Loss Amounts.................................... 123
Section 4.06. Compliance with
Withholding Requirements...............................
123
Section 4.07. Commission
Reporting...................................................
123
Section 4.08. REMIC Distributions
and Allocation of Losses........................... 125
ARTICLE V THE
CERTIFICATES..............................................................
129
Section 5.01. The
Certificates.......................................................
129
Section 5.02. Certificate Register;
Registration of Transfer and Exchange of
Certificates...........................................................
130
Section 5.03. Mutilated, Destroyed,
Lost or Stolen Certificates...................... 135
Section 5.04. Persons Deemed
Owners..................................................
135
Section 5.05. Access to List of
Certificateholders' Names and Addresses.............. 136
Section 5.06. Maintenance of Office
or Agency........................................ 136
</TABLE>
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Pooling & Servicing Agreement
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<S>
<C>
ARTICLE VI THE DEPOSITOR, THE ORIGINATOR, THE MASTER SERVICER AND
THE SERVICER.......... 136
Section 6.01. Respective Liabilities
of the Depositor, the Originator, the Master
Servicer and the
Servicer.............................................. 136
Section 6.02. Merger or
Consolidation of the Depositor, the Originator, the Master
Servicer or the
Servicer...............................................
136
Section 6.03. Limitation on
Liability of the Depositor, the Originator, the Master
Servicer, the Trust Administrator, the Servicer and
Others............. 137
Section 6.04. Limitation on
Resignation of the Servicer..............................
138
Section 6.05. Additional
Indemnification by the Servicer; Third Party Claims.........
138
Section 6.06. Rights of the
Depositor, the Master Servicer, the Trust Administrator
and the Trustee in Respect of the
Servicer............................. 139
Section 6.07. Limitation on
Resignation of the Master Servicer.......................
139
Section 6.08. Assignment of Master
Servicing......................................... 140
ARTICLE VII
DEFAULT.....................................................................
140
Section 7.01. Events of
Default......................................................
140
Section 7.02. Master Servicer to
Act; Appointment of Successor....................... 146
Section 7.03. Notification to
Certificateholders.....................................
148
ARTICLE VIII CONCERNING THE TRUSTEE AND THE TRUST
ADMINISTRATOR......................... 148
Section 8.01. Duties of the
Trustee..................................................
148
Section 8.02. Certain Matters
Affecting the Trustee and the Trust Administrator......
149
Section 8.03. Neither the Trustee
Nor the Trust Administrator Liable for
Certificates or Mortgage
Loans......................................... 151
Section 8.04. Trustee and Trust
Administrator May Own Certificates................... 151
Section 8.05. Fees and Expenses of
the Trustee and Trust Administrator............... 152
Section 8.06. Eligibility
Requirements for the Trustee and Trust Administrator.......
153
Section 8.07. Resignation and
Removal of the Trustee or Trust Administrator..........
153
Section 8.08. Successor Trustee or
Trust Administrator............................... 154
Section 8.09. Merger or
Consolidation of the Trustee or the Trust Administrator......
155
Section 8.10. Appointment of
Co-Trustee or Separate Trustee..........................
155
Section 8.11. Representations and
Warranties of the Trustee and Trust Administrator.. 156
ARTICLE IX
TERMINATION..................................................................
157
Section 9.01. Termination upon
Liquidation or Purchase of the Mortgage Loans......... 157
Section 9.02. Final Distribution on
the Certificates................................. 158
Section 9.03. Additional Termination
Requirements.................................... 159
ARTICLE X MISCELLANEOUS
PROVISIONS......................................................
160
Section 10.01.
Amendment..............................................................
160
Section 10.02.
Recordation of Agreement;
Counterparts................................. 162
</TABLE>
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Pooling & Servicing Agreement
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<TABLE>
<S>
<C>
Section 10.03.
Governing
Law..........................................................
162
Section 10.04.
Intention of
Parties...................................................
162
Section 10.05.
Notices................................................................
163
Section 10.06.
Severability of
Provisions.............................................
164
Section 10.07.
Assignment; Sales; Advance
Facilities.................................. 164
Section 10.08.
Limitation on Rights of
Certificateholders............................. 165
Section 10.09.
Inspection and Audit
Rights............................................ 166
Section 10.10.
Certificates Nonassessable and Fully
Paid.............................. 166
Section 10.11.
Waiver of Jury
Trial...................................................
167
ARTICLE XI REMIC
PROVISIONS.............................................................
167
Section 11.01.
REMIC
Administration...................................................
167
Section 11.02.
Prohibited Transactions and
Activities................................. 171
Section 11.03.
Indemnification........................................................
171
</TABLE>
SCHEDULES
Schedule I Mortgage Loan
Schedule
Schedule II Reserved
Schedule III
Reserved
Schedule IV Representations and
Warranties of Fremont Investment & Loan as
to the Mortgage Loans
EXHIBITS
Exhibit A Form
of Class A, Class M and Class B Certificates
Exhibit B Form
of Class P Certificate
Exhibit C Form
of Class [R][RX] Certificate
Exhibit D Form
of Class C Certificate
Exhibit E Form
of Initial Certification of Trust Administrator
Exhibit F Form
of Document Certification and Exception Report of Trust
Administrator
Exhibit G Form
of Residual Transfer Affidavit and Agreement
Exhibit H Form
of Transferor Certificate
Exhibit I Form
of Rule 144A Letter
Exhibit J Form
of Request for Release
Exhibit K Form
of Contents for Each Mortgage File
Exhibit L Power
of Attorney
Exhibit M Form
of Trust Administrator Certification
Fremont 2005-E
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Pooling & Servicing Agreement
<PAGE>
Exhibit N Form
of Servicer Certification
Exhibit O
Purchase Agreement
Exhibit P
Standard & Poor's LEVELS(R) Glossary
Exhibit Q Form
of Calculation of Realized Loss
Fremont 2005-E
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Pooling & Servicing Agreement
<PAGE>
THIS
POOLING AND SERVICING AGREEMENT, dated as of December 1, 2005,
among
Fremont Mortgage Securities Corporation, as depositor (the
"Depositor"), FREMONT
INVESTMENT & LOAN, as originator and servicer (the "Originator"
and the
"Servicer", as applicable; and together "Fremont"), and Wells Fargo
Bank, N.A.,
as master servicer and trust administrator (the "Master Servicer"
and "Trust
Administrator" in such capacities, respectively), and HSBC BANK
USA, NATIONAL
ASSOCIATION, as trustee (the "Trustee"),
WITNESSETH:
In
consideration of the mutual agreements herein contained, the
parties
hereto agree as follows:
PRELIMINARY STATEMENT
The
Issuer intends to sell pass-through certificates (collectively,
the
"Certificates"), to be issued hereunder in multiple Classes, which
in the
aggregate will evidence the entire beneficial ownership interest in
the Trust
Fund created hereunder. The Certificates will consist of
twenty-three Classes of
Certificates, designated as (i) the Class 1-A-1 Certificates, (ii)
the Class
2-A-1, Class 2-A-2, Class 2-A-3 and Class 2-A-4 Certificates, (iii)
the Class
M1, Class M2, Class M3, Class M4, Class M5, Class M6, Class M7,
Class M8 and
Class M9 Certificates, (iv) the Class B1, Class B2-A, Class B2-B,
Class B2-C and
Class B2-D Certificates, (iv) the Class C Certificates, (v) the
Class P
Certificates and (vi) the Class R and Class RX Certificates. The
descriptions of
REMIC I, REMIC II, REMIC III and REMIC IV that follow are part of
the
Preliminary Statement. 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 described below.
REMIC I
As
provided herein, the Trust Administrator will make an election to
treat
the assets of the Trust Fund, other than the Yield Maintenance
Agreements, the
Net WAC Rate Carryover Reserve Account, any Net WAC Rate Carryover
Amounts and
any Servicer Prepayment Payment Amounts as a real estate mortgage
investment
conduit (a "REMIC") for federal income tax purposes, and such
segregated pool of
assets will be designated as "REMIC I." The Class R-I Interest will
represent
the sole class of "residual interests" in REMIC I for purposes of
the REMIC
Provisions under federal income tax law. Interest on all Classes of
REMIC I
Regular Interests will be calculated on the basis of a 360-day year
consisting
of twelve 30-day months.
The
following table irrevocably sets forth the designation, the
Uncertificated REMIC I Pass-Through Rate, the initial
Uncertificated Balance,
and solely for purposes of satisfying Treasury Regulations
Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each
of the REMIC I
Interests. None of the REMIC I Regular Interests shall be
certificated.
Fremont 2005-E
Pooling & Servicing Agreement
<PAGE>
<TABLE>
<CAPTION>
UNCERTIFICATED
INITIAL UNCERTIFICATED
REMIC
LATEST POSSIBLE
DESIGNATION PRINCIPAL
BALANCE PASS-THROUGH
RATE MATURITY
DATE(1)
-----------
---------------------- -----------------
----------------
<S>
<C>
<C>
<C>
LTAA
$1,076,036,959.98
Variable(2)
January 2036
LT1A1
3,642,510.00
Variable(2)
January 2036
LT2A1
1,663,290.00
Variable(2)
January 2036
LT2A2
1,194,330.00
Variable(2)
January 2036
LT2A3
1,193,195.00
Variable(2)
January 2036
LT2A4
563,610.00
Variable(2)
January 2036
LTM1
433,710.00
Variable(2)
January 2036
LTM2
400,770.00
Variable(2)
January 2036
LTM3
269,010.00
Variable(2)
January 2036
LTM4
192,150.00
Variable(2)
January 2036
LTM5
192,150.00
Variable(2)
January 2036
LTM6
170,190.00
Variable(2)
January 2036
LTM7
170,190.00
Variable(2)
January 2036
LTM8
126,270.00
Variable(2)
January 2036
LTM9
137,250.00
Variable(2) January 2036
LTB1
126,270.00
Variable(2)
January 2036
LTB2A
27,500.00
Variable(2)
January 2036
LTB2B
25,000.00
Variable(2)
January 2036
LTB2C
25,000.00
Variable(2)
January 2036
LTB2D
37,790.00
Variable(2)
January 2036
LTZZ
11,369,752.96
Variable(2)
January 2036
LT1SUB
24,025.05
Variable(2)
January 2036
LT2GRP
96,875.25
Variable(2)
January 2036
LT2SUB
30,435.64
Variable(2)
January 2036
LT2GRP
122,724.14
Variable(2)
January 2036
LTXX
1,097,722,837.86
Variable(2)
January 2036
LTP
100.00
Variable(2)
January 2036
</TABLE>
----------
(1) Solely for
purposes of Treasury Regulation Section 1.860G-1(a)(4)(iii),
the
Distribution Date in the month following the maturity date for the
Mortgage
Loan
with the latest maturity date has been designated as the
"latest
possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in
accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
2
<PAGE>
REMIC II
As
provided herein, the Trust Administrator shall make an election to
treat
the segregated pool of assets consisting of the REMIC I Regular
Interests as a
REMIC for federal income tax purposes, and such segregated pool of
assets will
be designated as "REMIC II." The Class R-II Interest represents the
sole class
of "residual interests" in REMIC II for purposes of the REMIC
Provisions.
Interest on all Regular Certificates (other than the Class C
Interest) will be
calculated on the basis of the actual number of days in the related
Interest
Accrual Period and a 360-day year. Interest on the Class C Interest
will be
calculated on the basis of a 360-day year consisting of twelve
30-day months.
The
following table sets forth (or describes) the Class
designation,
Certificate Interest Rate, initial Class Certificate Balance or the
REMIC II
Uncertificated Principal Balance for each Class of Certificates or
REMIC II
Uncertificated Regular Interest:
<TABLE>
<CAPTION>
INITIAL CLASS
CERTIFICATE BALANCE
OR INITIAL REMIC II
UNCERTIFICATED
CERTIFICATE
ASSUMED FINAL
CLASS
PRINCIPAL BALANCE INTEREST RATE
MATURITY DATES
(1)
-----
------------------- ------------- ------------------
<S>
<C>
<C>
<C>
1-A-1
$728,502,000
(2)
January 2036
2-A-1
332,658,000
(2)
January 2036
2-A-2
238,866,000
(2)
January 2036
2-A-3
238,639,000
(2)
January 2036
2-A-4
112,722,000
(2)
January 2036
M1
86,742,000
(2)
January 2036
M2
80,154,000
(2)
January 2036
M3
53,802,000
(2)
January 2036
M4
38,430,000
(2)
January 2036
M5
38,430,000
(2)
January 2036
M6
34,038,000
(2)
January 2036
M7
34,038,000
(2)
January 2036
M8
25,254,000
(2)
January 2036
M9
27,450,000
(2)
January 2036
B1
25,254,000
(2)
January 2036
B2-A
5,500,000
(2)
January 2036
B2-B
5,000,000
(2)
January 2036
B2-C
5,000,000
January 2036
B2-D
7,558,000
January 2036
C Interest
(3)
(3)
January 2036
P Interest $
100
(4)
January 2036
R
N/A
N/A
January 2036
</TABLE>
----------
(1) Solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date following the maturity date for
the
Mortgage Loan with the latest maturity date has been designated as
the
"latest
3
<PAGE>
possible maturity date" for each Class of Certificates or REMIC
II
Uncertificated Regular Interest, each of which represents one or
more of
the
"regular interests" in REMIC II.
(2) A variable rate
calculated in accordance with the definition of
"Pass-Through Rate" herein.
(3) The Class C
Interest will accrue interest at the Pass-Through Rate for the
Class C Interest on the Notional Amount of the Class C Interest
outstanding
from
time to time which shall equal the aggregate of the
Uncertificated
Principal Balances of the REMIC I Regular Interests (other than
REMIC I
Regular Interest LTP). The Class C Interest will have an
initial
Uncertificated Principal Balance equal to the Initial
Overcollateralization
Amount. The Class C Interest will not accrue interest on its
Uncertificated
Principal Balance.
(4) The Class P
Interest does not bear interest. The Class P Interest
represents the right to receive payments in respect of Prepayment
Premiums.
4
<PAGE>
REMIC III
As
provided herein, the Trust Administrator shall make an election to
treat
the segregated pool of assets consisting of the Class C Interest as
a REMIC for
federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC III." The Class RX-III Interest represents the
sole class
of "residual interests" in REMIC III for purposes of the REMIC
Provisions.
The
following table sets forth (or describes) the Class
designation,
Pass-Through Rate and Initial Class Certificate Balance for the
Class C
Certificates that represents a "regular interest" in REMIC III
created
hereunder:
<TABLE>
<CAPTION>
Initial Class
Assumed Final
Class Designation
Certificate Balance Pass-Through Rate
Maturity
Date(1)
-----------------
------------------- -----------------
----------------
<S>
<C>
<C>
<C>
Class C Certificate...
(2)(3)
Variable(2)
January 2036
</TABLE>
----------
(1) Solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date following the maturity date for
the
Mortgage Loan with the latest maturity date has been designated as
the
"latest possible maturity date" for the Class C Certificates.
(2) The Class C
Certificates will receive 100% of amounts received in respect
of
the Class C Interest.
(3) The Certificate
Balance of the Class C Certificates shall equal the REMIC
II
Uncertificated Principal Balance of the Class C Interest.
5
<PAGE>
REMIC IV
As
provided herein, the Trust Administrator shall make an election to
treat
the segregated pool of assets consisting of the Class P Interest as
a REMIC for
federal income tax purposes, and such segregated pool of assets
will be
designated as "REMIC IV." The Class RX-IV Interest represents the
sole class of
"residual interests" in REMIC IV for purposes of the REMIC
Provisions.
The
following table sets forth (or describes) the Class designation
and
initial Class Certificate Balance for the Class P Certificates that
represents a
"regular interest" in REMIC IV created hereunder:
<TABLE>
<CAPTION>
Class
Assumed Final
Class Designation
Pass-Through Rate Certificate Balance
Maturity
Date(1)
-----------------
----------------- -------------------
----------------
<S>
<C>
<C>
<C>
Class P Certificate...
N/A
$100.00(2)
January 2036
</TABLE>
----------
(1) Solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date following the maturity date for
the
Mortgage Loan with the latest maturity date has been designated as
the
"latest possible maturity date" for the Class P Certificates.
(2) The Class P
Certificates will receive 100% of amounts received in respect
of
the Class P Interest.
As
of the Cut-off Date, the Group 1 Mortgage Loans had an aggregate
Stated
Principal Balance equal to $968,752,452.57 and the Group 2 Mortgage
Loans had an
aggregate Stated Principal Balance equal to $1,227,241,443.30.
6
<PAGE>
The
minimum denomination for each Class of the Offered Certificates
will be
$100,000, with integral multiples of $1 in excess thereof except
that one
Certificate in each Class may be issued in a different amount. The
minimum
denomination for (a) each of the Class P, Class R and Class RX
Certificates will
be a 100% Percentage Interest in such Class and (b) the Class C
Certificates
will be a 10% Percentage Interest in such Class.
Set
forth below are designations of Classes of Certificates to the
categories used herein:
<TABLE>
<S>
<C>
Book-Entry Certificates......... All Classes of Certificates
other than the
Physical Certificates.
ERISA-Restricted Certificates... Class R Certificates, Class
RX Certificates,
Class P Certificates and, Class C
Certificates; and any other certificate with
a rating below the lowest applicable
permitted rating under the Underwriters'
Exemption.
LIBOR Certificates.............. The Senior Certificates and
the Subordinate
Certificates.
Offered Certificates............ All Classes of Certificates
other than the
Private Certificates.
Physical Certificates........... Class C, Class P, Class R
and Class RX
Certificates.
Private Certificates............ Class C, Class P, Class R
and Class RX
Certificates.
Rating Agencies................. Moody's, Standard &
Poor's and Fitch.
Regular Certificates............ All Classes of Certificates
other than the
Class R and Class RX Certificates (exclusive
of the right to receive any Net WAC Rate
Carryover Amounts) each of which (other than
the Class C and Class P Certificates)
represents a regular interest in REMIC II for
purposes of the REMIC Provisions. The Class C
Certificates represent a regular interest in
REMIC III for purposes of the REMIC
Provisions. The Class P Certificates
represent a regular interest in REMIC IV for
purposes of the REMIC Provisions.
Residual Certificates........... Class R and Class RX
Certificates.
Senior Certificates............. Class 1-A-1, Class 2-A-1,
Class 2-A-2, Class
2-A-3 and Class 2-A-4 Certificates.
Subordinate Certificates........ Class M1, Class M2, Class
M3, Class M4, Class
M5, Class M6, Class M7, Class M8, Class M9,
Class B1, Class B2-A, Class B2-B, Class B2-C
and Class B2-D Certificates.
</TABLE>
7
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the following
meanings:
30-Day Delinquency: Each Mortgage Loan with respect to which any
portion of
a Scheduled Payment is, as of the last day of the prior Due Period,
one month
past due (without giving effect to any grace period).
Accepted Master Servicing Practices: With respect to any Mortgage
Loan, as
applicable, (1) either (x) those mortgage master servicing
practices of prudent
mortgage lending institutions which master service mortgage loans
of the same
type and quality as such Mortgage Loan in the jurisdiction where
the related
Mortgaged Property is located to the extent applicable to the
Master Servicer
(except in its capacity as successor to the Servicer), or (y) as
provided in
Section 3A.01 hereof, but in no event below the standard set forth
in clause (x)
and (2) in accordance with applicable local, state and federal
laws, rules and
regulations.
Accepted Servicing Practices: With respect to any Mortgage Loan,
as
applicable, (1) either (x) those mortgage servicing practices of
prudent
mortgage lending institutions which service mortgage loans of the
same type and
quality as such Mortgage Loan in the jurisdiction where the related
Mortgaged
Property is located to the extent applicable to the Servicer, or
(y) as provided
in Section 3.01 hereof, but in no event below the standard set
forth in clause
(x) and (2) in accordance with applicable local, state and federal
laws, rules
and regulations.
Account: Any of the Collection Account, the Distribution Account,
any
Escrow Account or the Net WAC Rate Carryover Reserve Account. Each
Account shall
be an Eligible Account.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased
pursuant to the Purchase Agreement.
Adjusted Net Mortgage
Interest Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Interest Rate less
the Expense
Fee Rate.
Adjustment Date: As to any Mortgage Loan, the first Due Date on
which the
related Mortgage Interest Rate adjusts as set forth in the related
Mortgage Note
and each Due Date thereafter on which the Mortgage Interest Rate
adjusts as set
forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section
10.07.
Advancing Person: The Person to whom the Servicer's rights under
this
Agreement to be reimbursed for any P&I Advances or Servicing
Advances have been
assigned pursuant to Section 10.07.
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<PAGE>
Adverse REMIC Event: As defined in Section 11.01(f) hereof.
Affiliate: With respect to any Person, any other Person
controlling,
controlled by or under common control with such first Person. For
the purposes
of this definition, "control" 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.
Agreement: This Pooling and Servicing Agreement and all amendments
or
supplements hereto.
Applied Realized Loss Amount: With respect to any Distribution
Date, the
amount, if any, by which the aggregate Class Certificate Balance of
the LIBOR
Certificates and the Class P Certificates after distributions of
principal on
such Distribution Date exceeds the aggregate Stated Principal
Balance of the
Mortgage Loans for such Distribution Date.
Appraised Value: With respect to any Mortgage Loan, the value of
the
related Mortgaged Property based upon the appraisal made for the
originator at
the time of origination of such Mortgage Loan or the sales price of
such
Mortgaged Property at such time of origination, whichever is less;
provided,
however, that in the case of a refinanced Mortgage Loan, such value
is based
solely upon the appraisal made at the time of origination of such
refinanced
Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer
or equivalent instrument in recordable form (other than the
assignee's name and
recording information not yet returned from the recording office),
reflecting
the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage
Loans to the extent received by the Trust Administrator (x) the sum
of (i) all
scheduled installments of interest (net of the related Expense
Fees) and
principal due on the Due Date on such Mortgage Loans in the related
Due Period
and received on or prior to the related Determination Date,
together with any
P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance
Proceeds and Liquidation Proceeds during the related Prepayment
Period (in each
case, net of unreimbursed expenses incurred in connection with a
liquidation or
foreclosure and unreimbursed Advances, if any); (iii) all partial
or full
prepayments on the Mortgage Loans received during the related
Prepayment Period
together with all Compensating Interest thereon and any amounts
paid by the
Servicer or Master Servicer in respect of Prepayment Interest
Shortfalls for
such Distribution Date pursuant to Sections 3.25 and 3A.12,
respectively
(excluding in each case Prepayment Premiums and any Prepayment
Interest Excess);
(iv) any Subsequent Recoveries, and (v) amounts received with
respect to such
Distribution Date as the Substitution Adjustment Amount or purchase
price in
respect of a Deleted Mortgage Loan or a Mortgage Loan repurchased
by the
Originator or the Depositor as of such Distribution Date; reduced
by (y) amounts
in reimbursement for P&I Advances and Servicing Advances
previously made with
respect to the Mortgage Loans and other amounts to which the
Servicer, the
Master Servicer, the Depositor, the Trust Administrator or the
Trustee (or
co-trustee) are entitled to be paid or reimbursed pursuant to this
Agreement.
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<PAGE>
Base
Rate: For any Distribution Date and any Class of LIBOR
Certificates,
the sum of (i) one-month LIBOR plus (ii) the related Pass-Through
Margin.
Best's: Best's Key Rating Guide, as the same shall be amended from
time to
time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on
which banking and savings and loan institutions, in (a) the states
of New York,
Maryland, Minnesota and California, (b) the state in which the
Servicer's
servicing operations are located, or (c) the state in which the
Trustee's
operations are located, are authorized or obligated by law or
executive order to
be closed.
Certificate: Any one of the Certificates executed by the Trust
Administrator in substantially the forms attached hereto as
exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than
the Class C, Class R or Class RX Certificates, at any date, the
maximum dollar
amount of principal to which the Holder thereof is then entitled
hereunder, such
amount being equal to the Denomination thereof minus all
distributions of
principal previously made with respect thereto and in the case of
the
Subordinate Certificates, reduced by any Applied Realized Loss
Amounts
applicable to such Class; provided, however, that the Certificate
Balances of
the Subordinate Certificates then outstanding will be increased in
direct order
of seniority by the amount of any Subsequent Recoveries distributed
to any Class
senior to such Class. With respect to the Class C Certificate and
any
Distribution Date, an amount equal to the REMIC II Uncertificated
Principal
Balance of the Class C Interest. The Class R or Class RX
Certificates will not
have a Certificate Balance.
Certificate Interest Rate: With respect to each Distribution Date
during
the Interest Accrual Period and each Class of LIBOR Certificates
and the Class C
Certificates, the related Pass-Through Rate.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who
is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificate Registrar: The registrar appointed pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is
registered in the Certificate Register, except that, solely for the
purpose of
giving any consent pursuant to this Agreement, any Certificate
registered in the
name of the Depositor, the Master Servicer or the Servicer or any
affiliate
thereof shall be deemed not to be Outstanding and the Percentage
Interest
evidenced thereby shall not be taken into account in determining
whether the
requisite amount of Percentage Interests necessary to effect such
consent has
been obtained; provided, however, that if any such Person
(including the
Depositor) owns 100% of the Percentage Interests evidenced by a
Class of
Certificates, such Certificates shall be deemed to be Outstanding
for purposes
of any provision hereof that requires the consent of the Holders of
Certificates
of a particular Class as a condition to the taking of any action
hereunder. The
10
<PAGE>
Trustee and the Trust Administrator are entitled to rely
conclusively on a
certification of the Depositor or any affiliate of the Depositor in
determining
which Certificates are registered in the name of an affiliate of
the Depositor.
Class: All Certificates bearing the same Class designation as set
forth in
the Preliminary Statement.
Class A Certificates: Any of the Class 1-A-1 Certificates and the
Class 2-A
Certificates, as applicable.
Class 1-A-1 Certificates: All Certificates bearing the Class
designation of
"Class 1-A-1 Certificates" representing the right to distributions
as set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class 2-A Certificates: Any of the Class 2-A-1, Class 2-A-2, Class
2-A-3
and Class 2-A-4 Certificates, as applicable.
Class 2-A-1 Certificates: All Certificates bearing the Class
designation of
"Class 2-A-1 Certificates" representing the right to distributions
as set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class 2-A-2 Certificates: All Certificates bearing the Class
designation of
"Class 2-A-2 Certificates" representing the right to distributions
as set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class 2-A-3 Certificates: All Certificates bearing the Class
designation of
"Class 2-A-3 Certificates" representing the right to distributions
as set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class 2-A-4 Certificates: All Certificates bearing the Class
designation of
"Class 2-A-4 Certificates" representing the right to distributions
as set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class B1 Certificates: All Certificates bearing the Class
designation of
"Class B1 Certificates" representing the right to distributions as
set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount..
Class B1 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
aggregate
Certificate Balance of the Class M1 Certificates (after taking into
account the
distribution of the Class M1 Principal Distribution Amount on
such
11
<PAGE>
Distribution Date), (iii) the aggregate Certificate Balance of the
Class M2
Certificates (after taking into account the distribution of the
Class M2
Principal Distribution Amount on such Distribution Date), (iv) the
aggregate
Certificate Balance of the Class M3 Certificates (after taking into
account the
distribution of the Class M3 Principal Distribution Amount on such
Distribution
Date), (v) the aggregate Certificate Balance of the Class M4
Certificates (after
taking into account the distribution of the Class M4 Principal
Distribution
Amount on such Distribution Date), (vi) the aggregate Certificate
Balance of the
Class M5 Certificates (after taking into account the distribution
of the Class
M5 Principal Distribution Amount on such Distribution Date), (vii)
the aggregate
Certificate Balance of the Class M6 Certificates (after taking into
account the
distribution of the Class M6 Principal Distribution Amount on such
Distribution
Date), (viii) the aggregate Certificate Balance of the Class M7
Certificates
(after taking into account the distribution of the Class M7
Principal
Distribution Amount on such Distribution Date), (ix) the aggregate
Certificate
Balance of the Class M8 Certificates (after taking into account the
distribution
of the Class M8 Principal Distribution Amount on such Distribution
Date), (x)
the aggregate Certificate Balance of the Class M9 Certificates
(after taking
into account the distribution of the Class M9 Principal
Distribution Amount on
such Distribution Date) and (xi) the aggregate Certificate Balance
of the Class
B1 Certificates immediately prior to such Distribution Date over
(y) the lesser
of (A) the product of (i) 90.80% and (ii) the aggregate Stated
Principal Balance
of the Mortgage Loans as of the last day of the related Due Period
(after giving
effect to scheduled payments of principal due during the related
Due Period, to
the extent received or advanced, and unscheduled collections of
principal
received during the related Prepayment Period) and (B) the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) minus
the Overcollateralization Floor Amount.
Class B2 Certificates: Any or all of the Class B2-A, Class B2-B,
Class B2-C
and Class B2-D Certificates, as the context requires.
Class B2-A Certificates: All Certificates bearing the Class
designation of
"Class B2-A Certificates" representing the right to distributions
as set forth
herein and therein and representing a (i) a regular interest in
REMIC II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class B2-B Certificates: All Certificates bearing the Class
designation of
"Class B2-B Certificates" representing the right to distributions
as set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class B2-C Certificates: All Certificates bearing the Class
designation of
"Class B2-C Certificates" representing the right to distributions
as set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class B2-D Certificates: All Certificates bearing the Class
designation of
"Class B2-D Certificates" representing the right to distributions
as set forth
herein and therein and
12
<PAGE>
representing (i) a regular interest in REMIC II for purposes of the
REMIC
Provisions and (ii) the right to receive its related Net WAC Rate
Carryover
Amount.
Class B2 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
aggregate
Certificate Balance of the Class M1 Certificates (after taking into
account the
distribution of the Class M1 Principal Distribution Amount on such
Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate
Balance of the Class M3 Certificates (after taking into account the
distribution
of the Class M3 Principal Distribution Amount on such Distribution
Date), (v)
the aggregate Certificate Balance of the Class M4 Certificates
(after taking
into account the distribution of the Class M4 Principal
Distribution Amount on
such Distribution Date), (vi) the aggregate Certificate Balance of
the Class M5
Certificates (after taking into account the distribution of the
Class M5
Principal Distribution Amount on such Distribution Date), (vii) the
aggregate
Certificate Balance of the Class M6 Certificates (after taking into
account the
distribution of the Class M6 Principal Distribution Amount on such
Distribution
Date), (viii) the aggregate Certificate Balance of the Class M7
Certificates
(after taking into account the distribution of the Class M7
Principal
Distribution Amount on such Distribution Date), (ix) the aggregate
Certificate
Balance of the Class M8 Certificates (after taking into account the
distribution
of the Class M8 Principal Distribution Amount on such Distribution
Date), (x)
the aggregate Certificate Balance of the Class M9 Certificates
(after taking
into account the distribution of the Class M9 Principal
Distribution Amount on
such Distribution Date), (xi) the aggregate Certificate Balance of
the Class B1
Certificates (after taking into account the distribution of the
Class B1
Principal Distribution Amount on such Distribution Date) and (xii)
the aggregate
Certificate Balance of the Class B2 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (A) the product of (i)
92.90% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day
of the related Due Period (after giving effect to scheduled
payments of
principal due during the related Due Period, to the extent received
or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect to
scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus the Overcollateralization Floor
Amount.
Class C Certificates: All Certificates bearing the Class
designation of
"Class C Certificates" representing the right to distributions as
set forth
herein and therein and representing a regular interest in REMIC III
for purposes
of the REMIC Provisions.
Class C Interest: An uncertificated interest in the Trust Fund held
by the
Trustee on behalf of the holders of the Class C Certificate and
representing the
right to distributions as set forth herein and evidencing (i) a
regular interest
in REMIC II for purposes of the REMIC Provisions and (ii) the
obligation to pay
Net WAC Rate Carryover Amounts.
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<PAGE>
Class Certificate Balance: With respect to any Class and as to any
date of
determination, the aggregate of the Certificate Balances of all
Certificates of
such Class as of such date.
Class C Distributable Amount: With respect to the Class C Interest
and any
Distribution Date, the sum of (i) the interest accrued on such
Class C Interest
at its Pass-Through Rate calculated on its Notional Amount less the
amount
(without duplication) of any Net WAC Rate Carryover Payments paid
pursuant to
Section 4.02(a)(iii) and less the amount applied as an Extra
Principal
Distribution Amount on such Distribution Date, (ii) any amount of
the REMIC II
Uncertificated Principal Balance of the Class C Interest remaining
that is
distributable as an Overcollateralization Release Amount and (iii)
the aggregate
of amounts remaining in the Net WAC Rate Carryover Reserve Accounts
after the
distributions in Sections 4.02(a)(iii)(O) and (P). With respect to
the Class C
Certificate, 100% of the amount distributed to the Class C
Interest.
Class M1 Certificates: All Certificates bearing the Class
designation of
"Class M1 Certificates" representing the right to distributions as
set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class M1 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date) and (ii)
the aggregate
Certificate Balance of the Class M1 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (A) the product of (i)
58.30% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day
of the related Due Period (after giving effect to scheduled
payments of
principal due during the related Due Period, to the extent received
or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect to
scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus the Overcollateralization Floor
Amount.
Class M2 Certificates: All Certificates bearing the Class
designation of
"Class M2 Certificates" representing the right to distributions as
set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class M2 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
Senior
Principal Distribution Amount on such Distribution Date), (ii) the
aggregate
Certificate Balance of the Class M1 Certificates (after taking into
account the
distribution of the Class M1 Principal Distribution Amount on such
Distribution
Date) and (iii) the aggregate Certificate Balance of the Class M2
Certificates
immediately prior to such Distribution Date over (y) the lesser of
(A) the
product of (i) 65.60% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect
to scheduled payments of principal due during the related Due
Period,
14
<PAGE>
to the extent received or advanced, and unscheduled collections of
principal
received during the related Prepayment Period) and (B) the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) minus
the Overcollateralization Floor Amount.
Class M3 Certificates: All Certificates bearing the Class
designation of
"Class M3 Certificates" representing the right to distributions as
set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class M3 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
aggregate
Certificate Balance of the Class M1 Certificates (after taking into
account the
distribution of the Class M1 Principal Distribution Amount on such
Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date) and (iv) the
Certificate Balance
of the Class M3 Certificates immediately prior to such Distribution
Date over
(y) the lesser of (A) the product of (i) 70.50% and (ii) the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) and (B)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day
of the related Due Period (after giving effect to scheduled
payments of
principal due during the related Due Period, to the extent received
or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) minus the Overcollateralization Floor Amount.
Class M4 Certificates: All Certificates bearing the Class
designation of
"Class M4 Certificates" representing the right to distributions as
set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class M4 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
aggregate
Certificate Balance of the Class M1 Certificates (after taking into
account the
distribution of the Class M1 Principal Distribution Amount on such
Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate
Balance of the Class M3 Certificates (after taking into account the
distribution
of the Class M3 Principal Distribution Amount on such Distribution
Date) and (v)
the aggregate Certificate Balance of the Class M4 Certificates
immediately prior
to such Distribution Date over (y) the lesser of (A) the product of
(i) 74.00%
and (ii) the aggregate Stated Principal Balance of the Mortgage
Loans as of the
last day of the
15
<PAGE>
related Due Period (after giving effect to scheduled payments of
principal due
during the related Due Period, to the extent received or advanced,
and
unscheduled collections of principal received during the related
Prepayment
Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect to
scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus the Overcollateralization Floor
Amount.
Class M5 Certificates: All Certificates bearing the Class
designation of
"Class M5 Certificates" representing the right to distributions as
set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class M5 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
aggregate
Certificate Balance of the Class M1 Certificates (after taking into
account the
distribution of the Class M1 Principal Distribution Amount on such
Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate
Balance of the Class M3 Certificates (after taking into account the
distribution
of the Class M3 Principal Distribution Amount on such Distribution
Date), (v)
the aggregate Certificate Balance of the Class M4 Certificates
(after taking
into account the distribution of the Class M4 Principal
Distribution Amount on
such Distribution Date) and (vi) the aggregate Certificate Balance
of the Class
M5 Certificates immediately prior to such Distribution Date over
(y) the lesser
of (A) the product of (i) 77.50% and (ii) the aggregate Stated
Principal Balance
of the Mortgage Loans as of the last day of the related Due Period
(after giving
effect to scheduled payments of principal due during the related
Due Period, to
the extent received or advanced, and unscheduled collections of
principal
received during the related Prepayment Period) and (B) the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) minus
the Overcollateralization Floor Amount.
Class M6 Certificates: All Certificates bearing the Class
designation of
"Class M6 Certificates" representing the right to distributions as
set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class M6 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
aggregate
Certificate Balance of the Class M1 Certificates (after taking into
account the
distribution of the Class M1 Principal Distribution Amount on such
Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such
16
<PAGE>
Distribution Date), (iv) the aggregate Certificate Balance of the
Class M3
Certificates (after taking into account the distribution of the
Class M3
Principal Distribution Amount on such Distribution Date), (v) the
aggregate
Certificate Balance of the Class M4 Certificates (after taking into
account the
distribution of the Class M4 Principal Distribution Amount on such
Distribution
Date), (vi) the aggregate Certificate Balance of the Class M5
Certificates
(after taking into account the distribution of the Class M5
Principal
Distribution Amount on such Distribution Date) and (vii) the
aggregate
Certificate Balance of the Class M6 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (A) the product of (i)
80.60% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day
of the related Due Period (after giving effect to scheduled
payments of
principal due during the related Due Period, to the extent received
or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect to
scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus the Overcollateralization Floor
Amount.
Class M7 Certificates: All Certificates bearing the Class
designation of
"Class M7 Certificates" representing the right to distributions as
set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class M7 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
aggregate
Certificate Balance of the Class M1 Certificates (after taking into
account the
distribution of the Class M1 Principal Distribution Amount on such
Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate
Balance of the Class M3 Certificates (after taking into account the
distribution
of the Class M3 Principal Distribution Amount on such Distribution
Date), (v)
the aggregate Certificate Balance of the Class M4 Certificates
(after taking
into account the distribution of the Class M4 Principal
Distribution Amount on
such Distribution Date), (vi) the aggregate Certificate Balance of
the Class M5
Certificates (after taking into account the distribution of the
Class M5
Principal Distribution Amount on such Distribution Date), (vii) the
aggregate
Certificate Balance of the Class M6 Certificates (after taking into
account the
distribution of the Class M6 Principal Distribution Amount on such
Distribution
Date) and (viii) the aggregate Certificate Balance of the Class M7
Certificates
immediately prior to such Distribution Date over (y) the lesser of
(A) the
product of (i) 83.70% and (ii) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period (after
giving effect
to scheduled payments of principal due during the related Due
Period, to the
extent received or advanced, and unscheduled collections of
principal received
during the related Prepayment Period) and (B) the aggregate Stated
Principal
Balance of the Mortgage Loans as of the last day of the related Due
Period
(after giving effect to scheduled payments of principal due during
the related
Due Period, to the extent received or advanced, and unscheduled
collections of
principal received during the related Prepayment Period) minus
the
Overcollateralization Floor Amount.
17
<PAGE>
Class M8 Certificates: All Certificates bearing the Class
designation of
"Class M8 Certificates" representing the right to distributions as
set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class M8 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
aggregate
Certificate Balance of the Class M1 Certificates (after taking into
account the
distribution of the Class M1 Principal Distribution Amount on such
Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate
Balance of the Class M3 Certificates (after taking into account the
distribution
of the Class M3 Principal Distribution Amount on such Distribution
Date), (v)
the aggregate Certificate Balance of the Class M4 Certificates
(after taking
into account the distribution of the Class M4 Principal
Distribution Amount on
such Distribution Date), (vi) the aggregate Certificate Balance of
the Class M5
Certificates (after taking into account the distribution of the
Class M5
Principal Distribution Amount on such Distribution Date), (vii) the
aggregate
Certificate Balance of the Class M6 Certificates (after taking into
account the
distribution of the Class M6 Principal Distribution Amount on such
Distribution
Date), (viii) the aggregate Certificate Balance of the Class M7
Certificates
(after taking into account the distribution of the Class M7
Principal
Distribution Amount on such Distribution Date) and (ix) the
aggregate
Certificate Balance of the Class M8 Certificates immediately prior
to such
Distribution Date over (y) the lesser of (A) the product of (i)
86.00% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day
of the related Due Period (after giving effect to scheduled
payments of
principal due during the related Due Period, to the extent received
or advanced,
and unscheduled collections of principal received during the
related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the
Mortgage Loans as
of the last day of the related Due Period (after giving effect to
scheduled
payments of principal due during the related Due Period, to the
extent received
or advanced, and unscheduled collections of principal received
during the
related Prepayment Period) minus the Overcollateralization Floor
Amount.
Class M9 Certificates: All Certificates bearing the Class
designation of
"Class M9 Certificates" representing the right to distributions as
set forth
herein and therein and representing (i) a regular interest in REMIC
II for
purposes of the REMIC Provisions and (ii) the right to receive its
related Net
WAC Rate Carryover Amount.
Class M9 Principal Distribution Amount: With respect to any
Distribution
Date, the excess of (x) the sum of (i) the aggregate Certificate
Balance of the
Senior Certificates (after taking into account the distribution of
the Senior
Principal Distribution Amount on such Distribution Date), (ii) the
aggregate
Certificate Balance of the Class M1 Certificates (after taking into
account the
distribution of the Class M1 Principal Distribution Amount on such
Distribution
Date), (iii) the aggregate Certificate Balance of the Class M2
Certificates
(after taking into account the distribution of the Class M2
Principal
Distribution Amount on such Distribution Date), (iv) the aggregate
Certificate
Balance of the Class M3 Certificates (after taking into account the
distribution
of the Class M3 Principal Distribution Amount on such
18
<PAGE>
Distribution Date), (v) the aggregate Certificate Balance of the
Class M4
Certificates (after taking into account the distribution of the
Class M4
Principal Distribution Amount on such Distribution Date), (vi) the
aggregate
Certificate Balance of the Class M5 Certificates (after taking into
account the
distribution of the Class M5 Principal Distribution Amount on such
Distribution
Date), (vii) the aggregate Certificate Balance of the Class M6
Certificates
(after taking into account the distribution of the Class M6
Principal
Distribution Amount on such Distribution Date), (viii) the
aggregate Certificate
Balance of the Class M7 Certificates (after taking into account the
distribution
of the Class M7 Principal Distribution Amount on such Distribution
Date), (ix)
the aggregate Certificate Balance of the Class M8 Certificates
(after taking
into account the distribution of the Class M8 Principal
Distribution Amount on
such Distribution Date) and (x) the aggregate Certificate Balance
of the Class
M9 Certificates immediately prior to such Distribution Date over
(y) the lesser
of (A) the product of (i) 88.50% and (ii) the aggregate Stated
Principal Balance
of the Mortgage Loans as of the last day of the related Due Period
(after giving
effect to scheduled payments of principal due during the related
Due Period, to
the extent received or advanced, and unscheduled collections of
principal
received during the related Prepayment Period) and (B) the
aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the
related Due
Period (after giving effect to scheduled payments of principal due
during the
related Due Period, to the extent received or advanced, and
unscheduled
collections of principal received during the related Prepayment
Period) minus
the Overcollateralization Floor Amount.
Class P Certificates: All Certificates bearing the Class
designation of
"Class P Certificates" representing the right to distributions as
set forth
herein and therein and representing a regular interest in REMIC IV
for purposes
of the REMIC Provisions.
Class P Interest: An uncertificated interest in the Trust Fund held
by the
Trustee on behalf of the holders of the Class P Certificate
representing the
right to distributions as set forth herein and evidencing a regular
interest in
REMIC II for purposes of the REMIC Provisions.
Class R Certificates: All Certificates bearing the Class
designation of
"Class R Certificates" and evidencing the ownership of the
"residual interest"
in each of REMIC I and REMIC II for purposes of the REMIC
Provisions. The Class
R Certificate represents the ownership of the Class R-I Interest
and the Class
R-II Interest.
Class RX Certificates: All Certificates bearing the Class
designation of
"Class RX Certificates" and evidencing the ownership of the
"residual interest"
in each of REMIC III and REMIC IV for purposes of the REMIC
Provisions. The
Class RX Certificate represents the ownership of the Class RX-III
Interest and
the Class RX-IV Interest.
Class R-I Interest: The residual interest in REMIC I for purposes
of the
REMIC Provisions.
Class R-II Interest: The residual interest in REMIC II for purposes
of the
REMIC Provisions.
Class RX-III Interest: The residual interest in REMIC III for
purposes of
the REMIC Provisions.
19
<PAGE>
Class RX-IV Interest: The residual interest in REMIC IV for
purposes of the
REMIC Provisions.
Closing Date: December 20, 2005.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: As defined in Section 3.10.
Compensating Interest: For any Distribution Date, the lesser of (a)
the
Prepayment Interest Shortfall, if any, for such Distribution Date,
with respect
to voluntary Principal Prepayments in full by the Mortgagor
(excluding any
payments made upon liquidation of the Mortgage Loan), and (b) the
amount of the
Servicing Fee payable to the Servicer for such Distribution
Date.
Condemnation Proceeds: All awards, compensation and/or settlements
in
respect of a Mortgaged Property, whether permanent or temporary,
partial or
entire, by exercise of the power of eminent domain or
condemnation.
Corporate Trust Office. The designated office of the Trustee or the
Trust
Administrator, as the case may be, at which at any particular time
its corporate
trust business with respect to this Agreement is administered,
which office at
the date of the execution of this Agreement is located at (i) with
respect to
the Trustee, HSBC Bank USA, National Association, 452 Fifth Avenue,
New York,
New York 10018, or at such other address as the Trustee may
designate from time
to time by notice to the Certificateholders, the Depositor, the
Servicer, the
Master Servicer, the Originator and the Trust Administrator, or
(ii) with
respect to the Trust Administrator, (A) for certificate transfer
purposes, Sixth
Street and Marquette Avenue, Minneapolis, Minnesota 55479,
Attention: Corporate
Trust Services-Fremont 2005-E, (B) for matters relating to the
Custodial Files,
24 Executive Park, Suite 100, Irvine, California 92614, Attention:
Fremont
2005-E, and (C) for all other purposes, 9062 Old Annapolis Road,
Columbia,
Maryland 21045 Attn: Client Manager-Fremont 2005-E, facsimile no.
(410) 715-2380
and which is the address to which notices to and correspondence
with the Trust
Administrator should be directed.
Corresponding Class: The Class of interests in one Trust REMIC
created
under this Agreement that corresponds to the Class of interests in
the other
Trust REMIC or to a Class of Certificates in the manner set out
below:
<TABLE>
<CAPTION>
CORRESPONDING REMIC I CLASSES CORRESPONDING REMIC II
CLASSES
-----------------------------
------------------------------
<S>
<C>
LT1A1
Class 1-A-1 Certificates
LT2A1
Class 2-A-1 Certificates
LT2A2
Class 2-A-2 Certificates
LT2A3
Class 2-A-3 Certificates
LT2A4
Class 2-A-4 Certificates
LTM1
Class M1 Certificates
LTM2
Class M2 Certificates
LTM3
Class M3 Certificates
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
CORRESPONDING REMIC I CLASSES CORRESPONDING REMIC II
CLASSES
-----------------------------
------------------------------
<S>
<C>
LTM4
Class M4 Certificates
LTM5
Class M5 Certificates
LTM6
Class M6 Certificates
LTM7
Class M7 Certificates
LTM8
Class M8 Certificates
LTM9
Class M9 Certificates
LTB1
Class B1 Certificates
LTB2A
Class B2-A Certificates
LTB2B
Class B2-B Certificates
LTB2C
Class B2-C Certificates
LTB2D
Class B2-D Certificates
LTP
Class P Interest
N/A
Class C Interest
</TABLE>
With respect to the Class C Interest and the Class P Interest, the
Class C
Certificates and the Class P Certificates, respectively.
Counterparty: Barclays Bank PLC, and its successors in
interest.
Credit Enhancement Percentage: With respect to any Distribution
Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate
Class
Certificate Balance of the Subordinate Certificates and (ii)
the
Overcollateralized Amount (in each case after taking into account
the
distributions of the Principal Distribution Amount for such
Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage Loans
for such
Distribution Date.
Current Interest: With respect to any Distribution Date for each
Class of
the LIBOR Certificates, the aggregate amount of interest accrued
during the
related Interest Accrual Period at the applicable Pass-Through Rate
on the
related Class Certificate Balance immediately prior to such
Distribution Date,
as reduced by such Class's share of Net Prepayment Interest
Shortfalls and
Relief Act Interest Shortfalls for the related Due Period allocated
to such
Class pursuant to Section 4.02.
Custodial File: With respect to each Mortgage Loan, the file
retained by
the Trust Administrator consisting of items (a) - (h) as listed on
Exhibit K
hereto.
Cut-off Date: With respect to each Mortgage Loan (other than a
Substitute
Mortgage Loan), December 1, 2005. With respect to all Substitute
Mortgage Loans,
their respective dates of substitution. References herein to the
"Cut-off Date,"
when used with respect to more than one Mortgage Loan, shall be to
the
respective Cut-off Dates for such Mortgage Loans.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal
Balances of all Mortgage Loans as of the close of business on the
Cut-off Date
(after giving effect to payments of principal due on that
date).
21
<PAGE>
Data
Tape Information: The information provided by the Originator as of
the
Cut-off Date to the Depositor setting forth the following
information with
respect to each Mortgage Loan: (1) the Originator's Mortgage Loan
identifying
number; (2) the Mortgagor's name; (3) the street address of the
Mortgaged
Property including the city, state and zip code; (4) a code
indicating whether
the Mortgaged Property is owner-occupied, a second home or
investment property;
(5) the number and type of residential units constituting the
Mortgaged Property
(i.e., a single family residence, a 2-4 family residence, a unit in
a
condominium project or a unit in a planned unit development,
manufactured
housing); (6) the original months to maturity or the remaining
months to
maturity from the Cut-off Date, in any case based on the original
amortization
schedule and, if different, the maturity expressed in the same
manner but based
on the actual amortization schedule; (7) the Loan-to-Value Ratio at
origination;
(8) the Mortgage Interest Rate as of the Cut-off Date; (9) the date
on which the
Scheduled Payment was due on the Mortgage Loan and, if such date is
not
consistent with the Due Date currently in effect, such Due Date;
(10) the stated
maturity date; (11) the amount of the Scheduled Payment as of the
Cut-off Date;
(12) the last payment date on which a Scheduled Payment was
actually applied to
pay interest and, if applicable, the outstanding principal balance;
(13) the
original principal amount of the Mortgage Loan; (14) the principal
balance of
the Mortgage Loan as of the close of business on the Cut-off Date,
after
deduction of payments of principal due and collected on or before
the Cut-off
Date; (15) with respect to Adjustable Rate Mortgage Loans, the
Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin; (17) with
respect to Adjustable Rate Mortgage Loans, the Lifetime Rate Cap
under the terms
of the Mortgage Note; (18) with respect to Adjustable Rate Mortgage
Loans, a
code indicating the type of Index; (19) with respect to Adjustable
Rate Mortgage
Loans, the Periodic Mortgage Interest Rate Cap under the terms of
the Mortgage
Note; (20) the type of Mortgage Loan (i.e., fixed rate, adjustable
rate, first
lien); (21) a code indicating the purpose of the loan (i.e.,
purchase, rate and
term refinance, equity take-out refinance); (22) a code indicating
the
documentation style (i.e., full documentation, easy documentation
or stated
income); (23) the loan credit classification (as described in the
Underwriting
Guidelines); (24) whether such Mortgage Loan provides for a
Prepayment Premium;
(25) the Prepayment Premium period of such Mortgage Loan, if
applicable; (26) a
description of the Prepayment Premium, if applicable; (27) the
Mortgage Interest
Rate as of origination; (28) the credit risk score at origination;
(29) the date
of origination; (30) the Mortgage Interest Rate adjustment period;
(31)the
Minimum Mortgage Interest Rate; (32) the Mortgage Interest Rate
calculation
method (i.e., 30/360, simple interest, other); (33) a code
indicating whether
the Mortgage Loan is a High Cost Mortgage Loan; (34) a code
indicating whether
the Mortgage Loan has been modified; (35) the current Loan-to-Value
Ratio; (36)
[Reserved]; (37) the Due Date for the first Scheduled Payment; (38)
the original
Scheduled Payment due; (39) with respect to the related Mortgagor,
the
debt-to-income ratio; (40) the Appraised Value of the Mortgaged
Property; (41)
the sales price of the Mortgaged Property if the Mortgage Loan was
originated in
connection with the purchase of the Mortgaged Property; (42) the
MERS
identification number; and (43) a code indicating if a Mortgage
Loan is a 30-Day
Delinquency. With respect to the Mortgage Loans in the aggregate:
(1) the number
of Mortgage Loans; (2) the current aggregate outstanding principal
balance of
the Mortgage Loans; (3) the weighted average Mortgage Interest Rate
of the
Mortgage Loans; and (4) the weighted average maturity of the
Mortgage Loans.
22
<PAGE>
Debt
Service Reduction: With respect to any Mortgage Loan, a reduction
by a
court of competent jurisdiction in a proceeding under the United
States
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan
which became
final and non-appealable, except for such a reduction resulting
from a Deficient
Valuation or any reduction that results in a permanent forgiveness
of principal.
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 United
States Bankruptcy
Code.
Definitive Certificates: Any Certificate evidenced by a
Physical
Certificate and any Certificate issued in lieu of a Book-Entry
Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: As defined in Section 2.03(d).
Delinquency Rate: With respect to any month, the quotient
(expressed as a
percentage) of (1) the Stated Principal Balance of the 60+ Day
Delinquent
Mortgage Loans, divided by (2) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related month.
Denomination: With respect to each Certificate, the amount set
forth on the
face thereof as the "Initial Certificate Balance of this
Certificate" or the
Percentage Interest appearing on the face thereof.
Depositor: Fremont Mortgage Securities Corporation, a Delaware
corporation,
and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company,
the nominee of which is CEDE & Co., as the registered Holder of
the Book-Entry
Certificates. The Depository shall at all times be a "clearing
corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of
New York.
Depository Institution: Any depository institution or trust
company,
including the Trustee, that (a) is incorporated under the laws of
the United
States of America or any State thereof, (b) is subject to
supervision and
examination by federal or state banking authorities and (c) has
outstanding
unsecured commercial paper or other short-term unsecured debt
obligations that
are rated P-1 by Moody's and A-1 by Standard & Poor's.
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 of the
calendar month in which such Distribution Date occurs or, if such
day is not a
Business Day, the immediately preceding Business Day.
23
<PAGE>
Distribution Account: The separate Eligible Account created and
maintained
by the Trust Administrator pursuant to Section 3.27(b) in the name
of the Trust
Administrator for the benefit of the Certificateholders and
designated "Wells
Fargo Bank, N.A. in trust for registered holders of Fremont Home
Loan Trust
2005-E Mortgage-Backed Certificates, Series 2005-E." Funds in the
Distribution
Account shall be held in trust for the Certificateholders for the
uses and
purposes set forth in this Agreement and may be invested in
Permitted
Investments.
Distribution Date: The 25th day of each calendar month after the
initial
issuance of the Certificates, or if such day is not a Business Day,
the next
succeeding Business Day, commencing in January 2006.
Document Certification and Exception Report: The report attached to
Exhibit
F hereto.
Due
Date: The day of the month on which the Scheduled Payment is due on
a
Mortgage Loan, exclusive of any days of grace.
Due
Period: With respect to any Distribution Date, the period
commencing on
the second day of the calendar month preceding the month in which
the
Distribution Date occurs and ending on the first day of the
calendar month in
which the Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal
or state
chartered depository institution or trust company the short-term
unsecured debt
obligations of which (or, in the case of a depository institution
or trust
company that is a subsidiary of a holding company, the short-term
unsecured debt
obligations of such holding company) are rated A-1 by Standard
& Poor's and P-1
by Moody's (and a comparable rating if another Rating Agency is
specified by the
Depositor by written notice to the Servicer) at the time any
amounts are held on
deposit therein, (ii) a trust account or accounts maintained with a
federal or
state chartered depository institution or trust company acting in
its fiduciary
capacity or (iii) any other account acceptable to each Rating
Agency. Eligible
Accounts may bear interest, and may include, if otherwise qualified
under this
definition, accounts maintained with the Trustee.
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
Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002)
(or any
successor thereto), or any substantially similar administrative
exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained
pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b) of this
Agreement.
Event of Default: Any (i) Servicer Event of Default or (ii) Master
Servicer
Event of Termination, each as defined in Section 7.01.
24
<PAGE>
Excess Cashflow: As to any Distribution Date, an amount equal to
the excess
if any, of (i) the interest collected on the Mortgage Loans
received by the
Servicer on or prior to the related Determination Date or advanced
by the
Servicer for the related Remittance Date (net of Expense Fees) over
(ii) the sum
of the amounts payable to the Classes of Certificates on such
Distribution Date
pursuant to Section 4.02(a)(i).
Excess Overcollateralized Amount: With respect to any Distribution
Date,
the excess, if any, of (a) the Overcollateralized Amount on such
Distribution
Date over (b) the Overcollateralization Target Amount for such
Distribution
Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the
sum of the Servicing Fee Rate, the Master Servicing Fee Rate and
the Trust
Administration Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the
Master Servicing Fee and the Trust Administration Fee.
Extra Principal Distribution Amount: As of any Distribution Date,
the
lesser of (x) the Excess Cashflow for such Distribution Date and
(y) the related
Overcollateralization Deficiency for such Distribution Date.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property
purchased by the
Originator as contemplated by this Agreement), a determination made
by the
Servicer that all Insurance Proceeds, Condemnation Proceeds,
Liquidation
Proceeds and other payments or recoveries which the Servicer, in
its reasonable
good faith judgment, expects to be finally recoverable in respect
thereof have
been so recovered. The Servicer shall maintain records, prepared by
a Servicing
Officer, of each Final Recovery Determination made thereby and
deliver a
certificate of a Servicing Officer evidencing such determination to
the Master
Servicer.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date
for each Class of Certificates is the Distribution Date occurring
in January
2036.
Fitch: Fitch, Inc. If Fitch is designated as a Rating Agency in
the
Preliminary Statement, for purposes of Section 10.05(b) the address
for notices
to Fitch shall be Fitch, Inc., One State Street Plaza, New York,
New York 10004,
Attention: Residential Mortgage Pass-Through Group, or such other
address as
Fitch may hereafter furnish to the Depositor, the Servicer, the
Master Servicer,
the Trust Administrator and the Trustee.
Formula Rate: With respect to each Class of LIBOR Certificates, the
related
Base Rate for such Class.
Fremont: Fremont Investment & Loan, a California state
chartered industrial
bank, and its successors in interest.
25
<PAGE>
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed
percentage amount set forth in the related Mortgage Note to be
added to the
applicable Index to determine the Mortgage Interest Rate.
Group 1 Allocation Percentage: For any Distribution Date, the
percentage
equivalent of a fraction, the numerator of which is (i) the
Principal Remittance
Amount for the Group 1 Mortgage Loans for such Distribution Date,
and the
denominator of which is (ii) the Principal Remittance Amount for
the Group 1
Mortgage Loans and the Group 2 Mortgage Loans for such Distribution
Date.
Group 1 Interest Remittance Amount: With respect to any
Distribution Date,
that portion of the Available Funds for such Distribution Date
attributable to
interest received or advanced with respect to the Group 1 Mortgage
Loans,
reduced by the pro rata portion of the amounts specified in clause
(y) of the
definition of Available Funds for such Distribution Date.
Group 1 Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan
Schedule as Group 1 Mortgage Loans.
Group 1 Net WAC Rate: A per annum rate equal to (a) the weighted
average of
the Adjusted Net Mortgage Interest Rates then in effect at the
beginning of the
related Due Period on the Group 1 Mortgage Loans (adjusted for
prepayments
during such Due Period that were distributed on the Distribution
Date falling
within such Due Period), multiplied by (b) 30 divided by the actual
number of
days in such Interest Accrual Period. For federal income tax
purposes, the
economic equivalent of such rate shall be expressed as the weighted
average of
the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular
Interest LT1GRP,
weighted on the basis of the Uncertificated Balance of such REMIC I
Regular
Interest.
Group 1 Principal Distribution Amount: With respect to any
Distribution
Date is the sum of (i) the excess of (x) the Principal Remittance
Amount
relating to the Group 1 Mortgage Loans over (y) the
Overcollateralization
Release Amount multiplied by the Group 1 Allocation Percentage for
such
Distribution Date and (ii) the Extra Principal Distribution Amount
for such
Distribution Date multiplied by the Group 1 Allocation
Percentage.
Group 1 Senior Certificates: The Class 1-A-1 Certificates.
Group 1 Senior Principal Distribution Amount: An amount equal to
the excess
of (x) the aggregate Certificate Balance of the Class 1-A-1
Certificates
immediately prior to such Distribution Date over (y) the lesser of
(A) the
product of (i) 50.40% and (ii) the aggregate Stated Principal
Balance of the
Group 1 Mortgage Loans as of the last day of the related Due Period
(after
giving effect to Scheduled Payments of principal due during the
related Due
Period, to the extent received or advanced, and unscheduled
collections of
principal received during the related Prepayment Period) and (B)
the aggregate
Stated Principal Balance of the Group 1 Mortgage Loans as of the
last day of the
related Due Period (after giving effect to scheduled payments of
principal due
during the related Due Period, to the extent received or advanced,
and
unscheduled collections of principal received during the related
Prepayment
Period) minus $4,843,802.26.
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<PAGE>
Group 1 Senior Yield Maintenance Agreement: The yield maintenance
agreement
related to the Group 1 Senior Certificates, dated as of December
20, 2005,
between the Trustee, on behalf of the Issuer, and the
Counterparty.
Group 2 Allocation Percentage: For any Distribution Date, the
percentage
equivalent of a fraction, the numerator of which is (i) the
Principal Remittance
Amount for the Group 2 Mortgage Loans for such Distribution Date,
and the
denominator of which is (ii) the Principal Remittance Amount for
the Group 1
Mortgage Loans and the Group 2 Mortgage Loans for such Distribution
Date.
Group 2 Interest Remittance Amount: With respect to any
Distribution Date,
that portion of the Available Funds for such Distribution Date
attributable to
interest received or advanced with respect to the Group 2 Mortgage
Loans,
reduced by the pro rata portion of the amounts specified in clause
(y) of the
definition of Available Funds for such Distribution Date.
Group 2 Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan
Schedule as Group 2 Mortgage Loans.
Group 2 Net WAC Rate: A per annum rate equal to (a) the weighted
average of
the Adjusted Net Mortgage Interest Rates then in effect at the
beginning of the
related Due Period on the Group 2 Mortgage Loans (adjusted for
prepayments
during such Due Period that were distributed on the Distribution
Date falling
within such Due Period), multiplied by (b) 30 divided by the actual
number of
days in such Interest Accrual Period. For federal income tax
purposes, the
economic equivalent of such rate shall be expressed as the weighted
average of
the Uncertificated REMIC I Pass-Through Rate on REMIC I Regular
Interest LT2GRP,
weighted on the basis of the Uncertificated Balance of such REMIC I
Regular
Interest.
Group 2 Principal Distribution Amount: With respect to any
Distribution
Date is the sum of (i) the excess of (x) the Principal Remittance
Amount
relating to the Group 2 Mortgage Loans over (y) the
Overcollateralization
Release Amount multiplied by the Group 2 Allocation Percentage for
such
Distribution Date and (ii) the Extra Principal Distribution Amount
for such
Distribution Date multiplied by the Group 2 Allocation
Percentage.
Group 2 Senior Certificates: The Class 2-A-1, Class 2-A-2, Class
2-A-3 and
Class 2-A-4 Certificates.
Group 2 Senior Principal Distribution Amount: An amount equal to
the excess
of (x) the aggregate Certificate Balance of the Class 2-A
Certificates
immediately prior to such Distribution Date over (y) the lesser of
(A) the
product of (i) 50.40% and (ii) the aggregate Stated Principal
Balance of the
Group 2 Mortgage Loans as of the last day of the related Due Period
(after
giving effect to Scheduled Payments of principal due during the
related Due
Period, to the extent received or advanced, and unscheduled
collections of
principal received during the related Prepayment Period) and (B)
the aggregate
Stated Principal Balance of the Group 2 Mortgage Loans as of the
last day of the
related Due Period (after giving effect to scheduled payments of
principal due
during the related Due Period, to the extent received or advanced,
and
unscheduled collections of principal received during the related
Prepayment
Period) minus $6,136,207.22.
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<PAGE>
Group 2 Senior Yield Maintenance Agreement: The yield maintenance
agreement
related to the Group 2 Senior Certificates, dated as of December
20, 2005,
between the Trustee, on behalf of the Issuer, and the
Counterparty.
High
Cost Mortgage Loan: A Mortgage Loan classified as (a) a "high
cost"
loan under the Home Ownership and Equity Protection Act of 1994,
(b) a "high
cost," "threshold," "covered" or "predatory" loan under any other
applicable
state, federal or local law (or a similarly classified loan using
different
terminology under a law imposing heightened regulatory scrutiny or
additional
legal liability for residential mortgage loans having high interest
rates,
points and/or fees) or (c) a High Cost Loan or Covered Loan as
defined in the
Standard & Poor's LEVELS(R) Glossary attached as Exhibit P (the
"Glossary")
where (x) a "High Cost Loan" is each loan identified in the column
"Category
under applicable anti-predatory lending law" of the table entitled
"Standard &
Poor's High Cost Loan Categorization" in the Glossary as each such
loan is
defined in the applicable anti-predatory lending law of the State
or
jurisdiction specified in such table and (y) "Covered Loan" is each
loan
identified in the column "Category under applicable anti-predatory
lending law"
of the table entitled "Standard & Poor's High Covered Loan
Categorization" in
the Glossary as each such loan is defined in the applicable
anti-predatory
lending law of the State of jurisdiction specified in such
table.
Index: As to each Adjustable Rate Mortgage Loan, the index from
time to
time in effect for the adjustment of the Mortgage Interest Rate set
forth as
such on the related Mortgage Note.
Initial Mortgage Interest Rate Cap: With respect to each Adjustable
Rate
Mortgage Loan, the absolute maximum amount set forth in a provision
of each
Mortgage Note by which the Mortgage Interest Rate therein may
increase or
decrease on the first Adjustment Date above or below the Mortgage
Interest Rate
previously in effect.
Initial Overcollateralization Amount: $77,956,795.87.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust
Fund, any insurance policy, including all riders and endorsements
thereto in
effect, including any replacement policy or policies for any
Insurance Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Accrual Period: With respect to each Class of LIBOR
Certificates
and any Distribution Date, the period commencing on the
Distribution Date
occurring in the month preceding the month in which the current
Distribution
Date occurs and ending on the day immediately preceding the current
Distribution
Date (or, in the case of the first Distribution Date, the period
from and
including the Closing Date to but excluding such first Distribution
Date). For
purposes of computing interest accruals on each Class of LIBOR
Certificates,
each Interest Accrual Period has the actual number of days in such
month and
each year is assumed to have 360 days. For purposes of computing
interest
accruals on the REMIC I Regular Interests, the Class C Interest and
the Class C
Certificates each Interest Accrual Period will be the prior
calendar month, and
each such month is assumed to have 30 days and each year is assumed
to have 360
days.
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<PAGE>
Investment Account: As defined in Section 3.12(a).
Issuer: Fremont Home Loan Trust 2005-E,
Late
Collections: With respect to any Mortgage Loan and any Due Period,
all
amounts received after the Remittance Date immediately following
such Due
Period, whether as late payments of Scheduled Payments or as
Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late
payments or collections of principal and/or interest due (without
regard to any
acceleration of payments under the related Mortgage and Mortgage
Note) but
delinquent for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the
LIBOR
Certificates, the rate determined by the Trust Administrator on the
related
LIBOR Determination Date on the basis of the offered rate for
one-month U.S.
dollar deposits as such rate appears on Telerate Page 3750 as of
11:00 a.m.
(London time) on such date; provided, that if such rate does not
appear on
Telerate Page 3750, the rate for such date will be determined on
the basis of
the rates at which one-month U.S. dollar deposits are offered by
the Reference
Banks at approximately 11:00 a.m. (London time) on such date to
prime banks in
the London interbank market. In such event, the Trust Administrator
will request
the principal London office of each of the Reference Banks to
provide a
quotation of its rate. If at least two such quotations are
provided, the rate
for that date will be the arithmetic mean of the quotations
(rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer than
two quotations
are provided as requested, the rate for that date will be the
arithmetic mean of
the rates quoted by major banks in New York City, selected by the
Trust
Administrator (after consultation with the Depositor), at
approximately 11:00
a.m. (New York City time) on such date for one-month U.S. dollar
loan to leading
European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period for
the LIBOR Certificates, the second London Business Day preceding
the
commencement of such Interest Accrual Period.
Lifetime Rate Cap: The provision of each Mortgage Note related to
an
Adjustable Rate Mortgage Loan which provides for an absolute
maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the
terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the
Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage
Loan by more
than the amount per annum set forth on the Mortgage Loan
Schedule.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO Property) which was
liquidated in the
calendar month preceding the month of such Distribution Date and as
to which the
Servicer has certified (in accordance with this Agreement) that it
has received
all amounts it expects to receive in connection with the
liquidation of such
Mortgage Loan including the final disposition of any REO
Property.
Liquidation Event: With respect to any Mortgage Loan, any of the
following
events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery
Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is
removed from coverage under this Agreement by reason of its being
purchased,
sold or replaced pursuant to or as contemplated by this Agreement.
With respect
to any REO Property, either of the following events: (i) a Final
Recovery
29
<PAGE>
Determination is made as to such REO Property; or (ii) such REO
Property is
removed from coverage under this Agreement by reason of its being
purchased
pursuant to this Agreement.
Liquidation Proceeds: The amounts, other than Insurance
Proceeds,
Condemnation Proceeds or those received following the acquisition
of REO
Property, 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 or otherwise.
Loan
Group: The Group 1 Mortgage Loans and the Group 2 Mortgage Loans,
as
applicable.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio
(expressed as a percentage) of the original outstanding principal
amount of the
Mortgage Loan (or, in the case of a second-lien Mortgage Loan, the
combined
original outstanding principal amount of such Mortgage Loan and any
first-lien
mortgage loan on the same Mortgaged Property) as of the Cut-off
Date (unless
otherwise indicated), to either (a) if the Mortgage Loan was made
to finance the
acquisition of the related Mortgaged Property, the least of (i) the
purchase
price of the Mortgaged Property, or (ii) the Appraisal Value of the
Mortgaged
Property at origination, or (b) if the Mortgage Loan was a
refinancing or
modification, the Appraisal Value of the Mortgaged Property at the
time of the
refinancing or modification.
London Business Day: Any day on which dealings in deposits of
United States
dollars are transacted in the London interbank market.
Marker Rate: With respect to the Class C Interest and any
Distribution
Date, a per annum rate equal to two (2) times the weighted average
of the
Uncertificated REMIC I Pass-Through Rates for REMIC I Regular
Interest LT1A1,
REMIC I Regular Interest LT2A1, REMIC I Regular Interest LT2A2,
REMIC I Regular
Interest LT2A3, REMIC I Regular Interest LT2A4, REMIC I Regular
Interest LTM1,
REMIC I Regular Interest LTM2, REMIC I Regular Interest LTM3, REMIC
I Regular
Interest LTM4, REMIC I Regular Interest LTM5, REMIC I Regular
Interest LTM6,
REMIC I Regular Interest LTM7, REMIC I Regular Interest LTM8, REMIC
I Regular
Interest LTM9, REMIC I Regular Interest LTB1, REMIC I Regular
Interest LTB2A,
REMIC I Regular Interest LTB2B, REMIC I Regular Interest LTB2C,
REMIC I Regular
Interest LTB2D and REMIC I Regular Interest LTZZ, (i) with the rate
on each such
REMIC I Regular Interest (other than REMIC I Regular Interest LTZZ)
subject to a
cap equal to the lesser of (a) the Base Rate of its Corresponding
Class and (b)
the related Net WAC Rate for the purposes of this calculation and
(ii) with the
rate on REMIC I Regular Interest LTZZ subject to a cap of zero for
the purpose
of this calculation; provided, however, that for this purpose,
calculations of
the Uncertificated REMIC I Pass-Through Rate and the related caps
with respect
to each such REMIC I Regular Interest (other than REMIC I Regular
Interest LTZZ)
shall be multiplied by a fraction, the numerator of which is the
actual number
of days in the Interest Accrual Period and the denominator of which
is 30.
Master Servicer: As of the Closing Date, Wells Fargo Bank, N.A.
and
thereafter, its respective successors in interest who meet the
qualifications of
this Agreement. As long as a Master Servicer is required under this
Agreement,
the Master Servicer and the Trust Administrator shall at all times
be the same
Person.
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<PAGE>
Master Servicer Event of Termination: One or more of the events
described
in Section 7.01(c).
Master Servicing Fee: With respect to the Mortgage Loans and for
any
calendar month, an amount, payable as provided in Section 3A.09,
equal to the
Master Servicing Fee Rate accrued for one month on the same
principal amount on
which interest on each Mortgage Loan accrues for such calendar
month.
Master Servicing Fee Rate: 0.003% per annum; provided, however, if
Fremont
Investment & Loan has been removed as Servicer or has resigned
as Servicer, and
in either such case if a Master Servicer is no longer required
hereunder, then
the Master Servicing Fee Rate shall be 0.00% per annum.
Master Servicing Officer: Any employee of the Master Servicer
involved in,
or responsible for, the administration and servicing of the
Mortgage Loans,
whose name and specimen signature appear on a list of Master
Servicing Officers
furnished by the Master Servicer to the Trustee, the Trust
Administrator, the
Servicer and the Depositor on the Closing Date, as such list may
from time to
time be amended.
Maximum Mortgage Interest Rate: With respect to an Adjustable Rate
Mortgage
Loan, the specified maximum mortgage rate over the life of such
mortgage loan;
with respect to a Mortgage Loan with a fixed rate, the Mortgage
Interest Rate.
Maximum LTZZ Uncertificated Accrued Interest Deferral Amount: With
respect
to any Distribution Date, the excess of (a) accrued interest at
the
Uncertificated REMIC I Pass-Through Rate applicable to REMIC I
Regular Interest
LTZZ for such Distribution Date on a balance equal to the
Uncertificated
Principal Balance of REMIC I Regular Interest LTZZ minus the REMIC
I
Overcollateralized Amount, in each case for such Distribution Date,
over (b)
REMIC I Regular Interest LT1A1, REMIC I Regular Interest LT2A2,
REMIC I Regular
Interest LT2A3, REMIC I Regular Interest LT2A4, REMIC I Regular
Interest LTM1,
REMIC I Regular Interest LTM2, REMIC I Regular Interest LTM3, REMIC
I Regular
Interest LTM4, REMIC I Regular Interest LTM5, REMIC I Regular
Interest LTM6,
REMIC I Regular Interest LTM7, REMIC I Regular Interest LTM8, REMIC
I Regular
Interest LTM9, REMIC I Regular Interest LTB1, REMIC I Regular
Interest LTB2A,
REMIC I Regular Interest LTB2B, REMIC I Regular Interest LTB2C and
REMIC I
Regular Interest LTB2D, each subject to a cap equal to the lesser
of (a) the
Base Rate of its Corresponding Class and (b) the related Net WAC
Rate for the
purposes of this calculation; provided, however, that for this
purpose,
calculations of the Uncertificated REMIC I Pass-Through Rate and
the related
caps with respect to Uncertificated Accrued Interest on REMIC I
Regular Interest
LT1A1, REMIC I Regular Interest LT2A1, REMIC I Regular Interest
LT2A2, REMIC I
Regular Interest LT2A3, REMIC I Regular Interest LT2A4, REMIC I
Regular Interest
LTM1, REMIC I Regular Interest LTM2, REMIC I Regular Interest LTM3,
REMIC I
Regular Interest LTM4, REMIC I Regular Interest LTM5, REMIC I
Regular Interest
LTM6, REMIC I Regular Interest LTM7, REMIC I Regular Interest LTM8,
REMIC I
Regular Interest LTM9, REMIC I Regular Interest LTB1, REMIC I
Regular Interest
LTB2A, REMIC I Regular Interest LTB2B, REMIC I Regular Interest
LTB2C and REMIC
I Regular Interest LTB2D multiplied by a fraction, the numerator of
which is the
actual number of days in the Interest Accrual Period and the
denominator of
which is 30.
31
<PAGE>
MERS: As defined in Section 2.01.
MERS
Designated Mortgage Loan: Mortgage Loans for which (a) the
Originator
has designated or will designate MERS as, and has taken or will
take such action
as is necessary to cause MERS to be, the mortgagee of record, as
nominee for the
Originator, in accordance with MERS Procedure Manual and (b) the
Originator has
designated or will designate the Trustee as the Investor on the
MERS(R) System.
MERS
Procedure Manual: The MERS Procedures Manual, as it may be
amended,
supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as
more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Interest Rate: With respect to an Adjustable Rate
Mortgage
Loan, the specified minimum mortgage rate over the life of such
mortgage loan;
with respect to a Mortgage Loan with a fixed rate, the Mortgage
Interest Rate.
Monthly Statement: The statement made available to the
Certificateholders
pursuant to Section 4.03.
Moody's: Moody's Investors Service, Inc. If Moody's is designated
as a
Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the
address for notices to Moody's shall be Moody's Investors Service,
Inc., 99
Church Street, New York, New York 10007, Attention: Residential
Mortgage
Pass-Through Group, or such other address as Moody's may hereafter
furnish to
the Depositor, the Servicer, the Master Servicer, the Trust
Administrator and
the Trustee.
Mortgage: The mortgage, deed of trust or other instrument
identified on the
Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained
in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage
Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this
Agreement, each Mortgage Loan originally sold and subject to this
Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan
includes,
without limitation, the Mortgage File, the Custodial File, the
Servicing File,
the Scheduled Payments, Principal Prepayments, Liquidation
Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition
proceeds, Prepayment
Premiums and all other rights, benefits, proceeds and obligations
arising from
or in connection with such Mortgage Loan, excluding replaced or
repurchased
Mortgage Loans.
Mortgage Loan Documents: The mortgage loan documents pertaining to
each
Mortgage Loan.
32
<PAGE>
Mortgage Loan Schedule: As of any date, the list of Mortgage Loans
included
in the Trust Fund on such date, attached hereto as Schedule I. The
Mortgage Loan
Schedule shall set forth by Loan Group the following information
with respect to
each Mortgage Loan in such Loan Group :
(i) the Mortgagor's name and the Originator's Mortgage Loan
identifying number;
(ii) the street address of the Mortgaged Property including the
state
and
zip code;
(iii) a code indicating whether the Mortgaged Property is
owner-occupied;
(iv) the number and type of residential dwelling constituting
the
Mortgaged Property (i.e., a single family residence, a 2-4
family
residence, a unit in a condominium project or a unit in a planned
unit
development,
manufactured housing);
(v) the original months to maturity;
(vi) the Loan-to-Value Ratio, at origination;
(vii) the Mortgage Interest Rate in effect immediately following
the
Cut-off Date;
(viii) the date on which the first monthly payment was due on
the
Mortgage Loan;
(ix) the stated maturity date of such Mortgage Loan;
(x) the amount of the monthly payment (a) at origination and (b)
due
on
the first Due Date after the Cut-off Date;
(xi) the last Due Date on which a monthly payment was actually
applied
to
the unpaid Stated Principal Balance;
(xii) the original principal amount of the Mortgage Loan as of
the
date
of origination;
(xiii) the Stated Principal Balance of the Mortgage Loan as of
the
close of business on the Cut-off Date;
(xiv) with respect to each Adjustable Rate Mortgage Loan, the
Applicable Index and Gross Margin;
(xv) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase financing, rate/term refinancing, cash-out
refinancing);
33
<PAGE>
(xvi) with respect to each Adjustable Rate Mortgage Loan, the
Maximum
Mortgage Interest Rate;
(xvii) with respect to each Adjustable Rate Mortgage Loan, the
Minimum
Mortgage Interest Rate;
(xviii) the Mortgage Interest Rate at origination;
(xix) with respect to each Adjustable Rate Mortgage Loan, the
Periodic
Mortgage Interest Rate Cap and the Initial Mortgage Interest Rate
Cap;
(xx) a code indicating the documentation program;
(xxi) with respect to each Adjustable Rate Mortgage Loan, the
first
Adjustment Date immediately following the Cut-off Date and the
Adjustment
Date
frequency;
(xxii) the value of the Mortgaged Property used to calculate the
LTV
for
the related Mortgage Loan;
(xxiii) the sale price of the Mortgaged Property, if
applicable;
(xxiv) the Originator's risk grade;
(xxv) the actual interest "paid to date" of the Mortgage Loan as
of
the
Cut-off Date;
(xxvi) the number of years any Prepayment Premium is in effect;
(xxvii) the loan type (i.e. fixed, adjustable; 2/28, 3/27,
etc.);
(xxviii) the actual unpaid principal balance of the Mortgage Loan
as
of
the Cut-off Date;
(xxix) a code indicating whether such Mortgage Loan is a Group
1
Mortgage Loan or a Group 2 Mortgage Loan;
(xxx) a code indicating whether the Mortgage Loan is a MERS
Designated
Mortgage Loan and, if so, its corresponding mortgage identification
number;
and
(xxxi) a code indicating whether the Mortgage Loan is subject to
a
Prepayment Premium, if any.
The
Mortgage Loan Schedule shall set forth the following information
with
respect to the Mortgage Loans in the aggregate as of the Cut-off
Date: (1) the
number of Mortgage Loans; (2) the current principal balance of the
Mortgage
Loans; (3) the weighted average Mortgage Interest Rate of the
Mortgage Loans;
and (4) the weighted average maturity of the Mortgage Loans. The
Mortgage Loan
Schedule shall set forth the aggregate Stated Principal Balance of
the Mortgage
34
<PAGE>
Loans. The Mortgage Loan Schedule shall be amended from time to
time by the
Depositor in accordance with the provisions of this Agreement. With
respect to
any Substitute Mortgage Loan, the Cut-off Date shall refer to the
related
Cut-off Date for such Mortgage Loan, determined in accordance with
the
definition of Cut-off Date herein.
Mortgage Note: The note or other evidence of the indebtedness of
a
Mortgagor under a Mortgage Loan.
Mortgaged Property: The real property (or leasehold estate, if
applicable)
identified on the Mortgage Loan Schedule as securing repayment of
the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net
Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii)
(before giving
effect to distributions pursuant to such subsection).
Net
Prepayment Interest Shortfall: For any Distribution Date, the
amount by
which the sum of the Prepayment Interest Shortfalls exceeds the sum
of the
Compensating Interest payments made on such Distribution Date.
Net
WAC Rate: For any Distribution Date, the Group 1 Net WAC Rate,
the
Group 2 Net WAC Rate and the Subordinate Net WAC Rate, as
applicable.
Net
WAC Rate Carryover Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, if on such Distribution
Date there
are unpaid Net WAC Rate Carryover Amounts from prior Distribution
Dates or the
Pass-Through Rate for any Class of LIBOR Certificates is based upon
the Net WAC
Rate, the sum of (A) the excess of the Formula Rate for that Class
of LIBOR
Certificates over (i) with respect to the Group 1 Senior
Certificates, the Group
1 Net WAC Rate, (ii) with respect to the Group 2 Senior
Certificates, the Group
2 Net WAC Rate, and (iii) with respect to the Subordinate
Certificates, the
Subordinate Net WAC Rate, and (B) the Net WAC Rate Carryover Amount
for such
Class of Certificates for all previous Distribution Dates not
previously paid,
together with interest thereon at the applicable Pass-Through Rate
for such
Class (without giving effect to any such limitations) of
Certificates for such
Distribution Date.
Net
WAC Rate Carryover Payment: For any Distribution Date, an amount
equal
to the aggregate of the Net WAC Rate Carryover Amounts for such
Distribution
Date.
Net
WAC Rate Carryover Reserve Account: The separate Eligible
Account
created and maintained by the Trustee pursuant to Sections 3.27(a)
in the name
of the Trust Administrator for the benefit of the Holders of
Regular
Certificates and designated "Wells Fargo Bank, N.A. in trust for
registered
holders of Fremont Home Loan Trust 2005-E, Mortgage-Backed
Certificates, Series
2005-E." Funds in the Net WAC Rate Carryover Reserve Account shall
be held in
trust for the Holders of Regular Certificates for the uses and
purposes set
forth in this Agreement. Amounts on deposit in the Net WAC Rate
Carryover
Reserve Account shall not be invested. The Net WAC Rate Carryover
Reserve
Account shall not be an asset of any Trust REMIC.
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<PAGE>
NIM
Trust: Fremont NIM Trust 2005-E, a Delaware statutory trust, or
other
special purpose entity created to securitize the cashflows relating
to the Class
C and/or Class P Certificates.
Nonrecoverable P&I Advance: Any P&I Advance previously made
or proposed to
be made in respect of a Mortgage Loan or REO Property that, in the
good faith
business judgment of the Servicer, will not or, in the case of a
proposed P&I
Advance, would not be ultimately recoverable from related late
payments,
Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds
on such
Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or
proposed to be made in respect of a Mortgage Loan or REO Property,
which, in the
good faith business judgment of the Servicer, will not or, in the
case of a
proposed Servicing Advance, would not, be ultimately recoverable
from related
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section
9.02 to the effect that final distribution on any of the
Certificates shall be
made only upon presentation and surrender thereof.
Notional Amount: With respect to the Class C Interest and the Class
C
Certificates, a notional amount equal to the aggregate principal
balance of the
REMIC I Regular Interests (other than REMIC I Regular Interest
LTP).
Offered Certificates: As defined in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer
with responsibility for the servicing of the Mortgage Loans
required to be
serviced by the Servicer and listed on a list delivered to the
Trustee or Trust
Administrator, as applicable, pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house
counsel for the Servicer or a Subservicer, the Master Servicer, the
Originator
or the Depositor, reasonably acceptable to the Trustee and the
Trust
Administrator; provided, that any Opinion of Counsel relating to
(a)
qualification of any Trust REMIC as a REMIC or (b) compliance with
the REMIC
Provisions, must be an opinion of counsel who (i) is in fact
independent of the
Servicer of the Mortgage Loans, (ii) does not have any material
direct or
indirect financial interest in the Servicer of the Mortgage Loans
or in an
affiliate of either and (iii) is not connected with the Servicer of
the Mortgage
Loans as an officer, employee, director or person performing
similar functions.
Optional Termination Date: Any Distribution Date when the aggregate
Stated
Principal Balance of the Mortgage Loans, as of the last day of the
related Due
Period, is equal to 10% or less of the Cut-off Date Pool Principal
Balance that
has been designated as an Optional Termination Date by the Servicer
or holder of
the Class R or Class RX Certificate.
Originator: Fremont.
OTS:
Office of Thrift Supervision, and any successor thereto.
36
<PAGE>
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or the
Trust
Administrator or delivered to the Trustee or the Trust
Administrator for
cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other
Certificates have been executed and delivered by the Trustee or the
Trust
Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a
Stated Principal Balance greater than zero which was not the
subject of a
Principal Prepayment in Full prior to such Due Date and which did
not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the excess,
if any,
of (a) the aggregate Stated Principal Balance of the Mortgage Loans
and REO
Properties for such Distribution Date over (b) the aggregate of the
Class
Certificate Balances of the Senior Certificates, the Subordinate
Certificates
and the Class P Certificate as of such Distribution Date (after
giving effect to
the payment of the Principal Remittance Amount on such Certificates
on such
Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date,
the excess, if any, of (a) the Overcollateralization Target Amount
applicable to
such Distribution Date over (b) the Overcollateralized Amount
applicable to such
Distribution Date.
Overcollateralization Floor Amount: With respect to any
Distribution Date,
0.50% of the aggregate Stated Principal Balance of the Mortgage
Loans as of the
Cut-off Date.
Overcollateralization Release Amount: With respect to any
Distribution
Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount
and (b) the Excess Cashflow.
Overcollateralization Target Amount: With respect to any
Distribution Date
(i) prior to the Stepdown Date, an amount equal to 3.55% of the
Cut-off Date
Pool Principal Balance, (ii) on and after the Stepdown Date
provided a Trigger
Event is not in effect, an amount equal to the greater of (A) 7.10%
of the
aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of
the related Due Period (after giving effect to scheduled payments
of principal
due during the related Due Period, to the extent received or
advanced, and
unscheduled collections of principal received during the related
Prepayment
Period) and (B) 0.50% of the aggregate Cut-off Date Pool Principal
Balance of
the Mortgage Loans and (iii) on or after the Stepdown Date if a
Trigger Event is
in effect, the Overcollateralization Target Amount for the
immediately preceding
Distribution Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest
in such Certificate including any interest in such Certificate as
the Holder
thereof and any other interest therein, whether direct or indirect,
legal or
beneficial.
37
<PAGE>
P&I Advance: As to any Mortgage Loan or REO Property, any
advance made by
the Servicer in respect of any Remittance Date representing the
aggregate of all
payments of principal and interest, net of the Servicing Fee, that
were due
during the related Due Period on the Mortgage Loans and that were
delinquent on
the related Remittance Date, plus certain amounts representing
assumed payments
not covered by any current net income on the Mortgaged Properties
acquired by
foreclosure or deed in lieu of foreclosure as determined pursuant
to Section
4.01.
Pass-Through Margin: With respect to each Class of LIBOR
Certificates, the
following percentages:
<TABLE>
<CAPTION>
ON OR PRIOR TO OPTIONAL AFTER THE OPTIONAL
TERMINATION DATE
TERMINATION DATE
----------------------- ------------------
<S>
<C>
<C>
Class 1-A-1 Certificates
0.230%
0.460%
Class 2-A-1 Certificates
0.090%
0.180%
Class 2-A-2 Certificates
0.170%
0.340%
Class 2-A-3 Certificates
0.240%
0.480%
Class 2-A-4 Certificates
0.330%
0.660%
Class M1 Certificates
0.450%
0.675%
Class M2 Certificates
0.460%
0.690%
Class M3 Certificates
0.480%
0.720%
Class M4 Certificates
0.630%
0.945%
Class M5 Certificates
0.660%
0.990%
Class M6 Certificates
0.760%
1.140%
Class M7 Certificates
1.850%
2.775%
Class M8 Certificates
2.500%
3.750%
Class M9 Certificates
2.500%
3.750%
Class B1 Certificates
2.500%
3.750%
Class B2-A Certificates
2.500%
3.750%
Class B2-B Certificates
2.500%
3.750%
Class B2-C Certificates
2.500%
3.750%
Class B2-D Certificates
2.500%
3.750%
</TABLE>
Pass-Through Rate: For any Distribution Date and with respect to
each class
of LIBOR Certificates, a rate equal to the lesser of (i) the
related Formula
Rate for such Class and (ii) the related Net WAC Rate; and in the
case of any
REMIC I Regular Interest, the Uncertificated REMIC I Pass-Through
Rate.
With
respect to the Class C Interest, a per annum rate equal to the
percentage equivalent of a fraction, the numerator of which is the
sum of the
amounts calculated pursuant to clauses (A) through (V) below, and
the
denominator of which is the aggregate of the Uncertificated
38
<PAGE>
Principal Balances of REMIC I Regular Interest LTAA, REMIC I
Regular Interest
LT1A1, REMIC I Regular Interest LT2A1, REMIC I Regular Interest
LT2A2, REMIC I
Regular Interest LT2A3, REMIC I Regular Interest LT2A4, REMIC I
Regular Interest
LTM1, REMIC I Regular Interest LTM2, REMIC I Regular Interest LTM3,
REMIC I
Regular Interest LTM4, REMIC I Regular Interest LTM5, REMIC I
Regular Interest
LTM6, REMIC I Regular Interest LTM7, REMIC I Regular Interest LTM8,
REMIC I
Regular Interest LTM9, REMIC I Regular Interest LTB1, REMIC I
Regular Interest
LTB2A, REMIC I Regular Interest LTB2B, REMIC I Regular Interest
LTB2C, REMIC I
Regular Interest LTB2D and REMIC I Regular Interest LTZZ. For
purposes of
calculating the Pass-Through Rate for the Class C Interest, the
numerator is
equal to the sum of the following components:
(A) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTAA minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTAA;
(B) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT1A1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LT1A1;
(C) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT2A1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LT2A1;
(D) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT2A2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LT2A2;
(E) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT2A3 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LT2A3;
(F) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LT2A4 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LT2A4;
(G) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM1;
(H) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM2;
(I) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM3 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM3;
39
<PAGE>
(J) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM4 minus the Marker Rate, applied to an
amount
equal to the
Uncertificated Principal Balance of REMIC I Regular
Interest LTM4;
(K) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM5 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM5;
(L) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM6 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM6;
(M) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM7 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM7;
(N) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM8 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM8;
(O) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTM9 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTM9;
(P) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTB1 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTB1;
(Q) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTB2 minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTB2A;
(R) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTB2B minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTB2B;
(S) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTB2C minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTB2C;
(T) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTB2D minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTB2D;
(U) the Uncertificated REMIC I Pass-Through Rate for REMIC I
Regular Interest LTZZ minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest LTZZ; and
40
<PAGE>
(V) 100% of the Interest on REMIC I Regular Interest LTP.
With respect to the Class C Certificates, 100% of the interest
distributable on
the Class C Interest, expressed as a per annum rate.
Percentage Interest: As to any Certificate, the percentage
interest
evidenced thereby in distributions required to be made on the
related Class,
such percentage interest being set forth on the face thereof or
equal to the
percentage obtained by dividing the Denomination of such
Certificate by the
aggregate of the Denominations of all Certificates of the same
Class.
Periodic Mortgage Interest Rate Cap: With respect to each
Adjustable Rate
Mortgage Loan, the absolute maximum amount set forth in a provision
of each
Mortgage Note by which the Mortgage Interest Rate therein may
increase or
decrease on an Adjustment Date (other than the first Adjustment
Date) above or
below the Mortgage Interest Rate previously in effect. The Periodic
Mortgage
Interest Rate Cap for each Adjustable Rate Mortgage Loan is the
rate set forth
on the Mortgage Loan Schedule.
Permitted Investments: Any one or more of the following obligations
or
securities acquired at a purchase price of not greater than par,
regardless of
whether issued by the Depositor, the Servicer, the Master Servicer,
the Trust
Administrator, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as
to
timely payment of principal and interest by, the United States or
any
agency or instrumentality thereof, provided such obligations are
backed by
the
full faith and credit of the United States;
(ii)
demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of
not
more
than 90 days and, in the case of bankers' acceptances, shall in
no
event have an original maturity of more than 365 days or a
remaining
maturity of more than 30 days) denominated in United States dollars
and
issued by any Depository Institution and rated P-1 by Moody's and
A-1+ by
Standard & Poor's;
(iii) repurchase obligations with respect to any security described
in
clause (i) above entered into with a Depository Institution (acting
as
principal);
(iv) securities bearing interest or sold at a discount that are
issued
by
any corporation incorporated under the laws of the United States
of
America or any state thereof and that are rated by each Rating
Agency that
rates such securities in its highest long-term unsecured rating
categories
at
the time of such investment or contractual commitment providing for
such
investment;
(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 30 days after the date of acquisition
thereof)
that
is rated by each Rating Agency that rates such securities in
its
highest short-term unsecured debt rating available at the time of
such
investment;
41
<PAGE>
(vi) units of money market funds, including money market funds
advised
or
managed by the Depositor, the Trustee or the Trust Administrator or
an
Affiliate thereof, that have been rated "Aaa" by Moody's and "AAAm"
or
"AAAMG" by Standard & Poor's; and
(vii) if previously confirmed in writing to the Trustee and the
Trust
Administrator, any other demand, money market or time deposit, or
any other
obligation, security or investment, as may be acceptable to the
Rating
Agencies as a permitted investment of funds backing "Aaa" or "AAA"
rated
securities;
provided, however, that no instrument described hereunder shall
evidence either
the right to receive (a) only interest with respect to the
obligations
underlying such instrument or (b) both principal and interest
payments derived
from obligations underlying such instrument and the interest and
principal
payments with respect to such instrument provide a yield to
maturity at par
greater than 120% of the yield to maturity at par of the underlying
obligations.
Permitted Transferee: Any Person other than (i) the United States,
any
State or political subdivision thereof, or any agency or
instrumentality of any
of the foregoing, (ii) a foreign government, international
organization or any
agency or instrumentality of either of the foregoing, (iii) an
organization
(except certain farmers' cooperatives described in Section 521 of
the Code)
which is exempt from tax imposed by Chapter 1 of the Code
(including the tax
imposed by Section 511 of the Code on unrelated business taxable
income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code)
with respect to
any Residual Certificate, (iv) rural electric and telephone
cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that
is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual
Certificate
is attributable to a foreign permanent establishment or fixed base
(within the
meaning of an applicable income tax treaty) of such Person or any
other U.S.
Person, (vi) an "electing large partnership" within the meaning of
Section 775
of the Code and (vii) any other Person so designated by the
Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in
a Residual
Certificate to such Person may cause any Trust REMIC to fail to
qualify as a
REMIC at any time that the Certificates are outstanding. The terms
"United
States," "State" and "international organization" shall have the
meanings set
forth in Section 7701 of the Code or successor provisions. A
corporation will
not be treated as an instrumentality of the United States or of any
State or
political subdivision thereof for these purposes if all of its
activities are
subject to tax and, with the exception of Freddie Mac, a majority
of its board
of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint
venture,
association, limited liability company, joint-stock company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pool
Stated Principal Balance: As to any Distribution Date, the
aggregate
of the Stated Principal Balances of the Mortgage Loans for such
Distribution
Date that were Outstanding Mortgage Loans on the Due Date in the
related Due
Period.
42
<PAGE>
Prepayment Interest Excess: With respect to any Remittance Date,
the sum
of, for each Mortgage Loan that was, during the portion of the
Prepayment Period
from the 1st day of the month in which such Remittance Date occurs
through the
15th day of the month in which such Remittance Date occurs, the
subject of a
Principal Prepayment in Full that was applied by the Servicer to
reduce the
outstanding principal balance of such Mortgage Loan on a date
preceding the Due
Date in the succeeding Prepayment Period, an amount equal to the
product of (a)
the Mortgage Interest Rate net of the Servicing Fee Rate for such
Mortgage Loan,
(b) the amount of the Principal Prepayment in Full for such
Mortgage Loan, (c)
1/360 and (d) the number of days commencing on the first day of the
calendar
month in which such Remittance Date occurs and ending on the date
on which such
Principal Prepayment in Full was applied.
Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum
of, for each Mortgage Loan that was, during the portion of the
Prepayment Period
from the 16th day of the calendar month preceding such Remittance
Date to the
last day of the calendar month preceding such Remittance Date, the
subject of a
Principal Prepayment in Full that was applied by the Servicer to
reduce the
outstanding principal balance of such Mortgage Loan on a date
preceding the Due
Date in the succeeding Prepayment Period, an amount equal to the
product of (a)
the Mortgage Interest Rate net of the Servicing Fee Rate for such
Mortgage Loan,
with respect to the Servicer's obligation in respect of any
Prepayment Interest
Shortfall, or the sum of the Servicing Fee Rate and the Master
Servicing Fee
Rate, with respect to the Master Servicer's obligation in respect
of any
Prepayment Interest Shortfall, (b) the amount of the Principal
Prepayment for
such Mortgage Loan, (c) 1/360 and (d) the number of days commencing
on the date
on which such Principal Prepayment was applied and ending on the
last day of the
related Prepayment Period.
Prepayment Period: With respect to any Remittance Date, (a) with
respect to
a Principal Prepayment in Full, the period from and including the
16th day of
the month preceding the month in which such Remittance Date occurs
to and
including the 15th day of the month in which such Remittance Date
occurs, and
(b) with respect to Principal Prepayments in part, the calendar
month prior to
such Remittance Date.
Prepayment Premium: Any prepayment premium, penalty or charge
collected by
the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with
any voluntary Principal Prepayment in Full pursuant to the terms of
the related
Mortgage Note.
Principal Distribution Amount: For any Distribution Date, the sum
of (i)
the Group 1 Principal Distribution Amount for such Distribution
Date and (ii)
the Group 2 Principal Distribution Amount for such Distribution
Date
Principal Prepayment: Any partial payment or other recovery of
principal on
a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is
received in advance of its scheduled Due Date, excluding any
Prepayment Premium
and which is not accompanied by an amount of interest representing
scheduled
interest due on any date or dates in any month or months subsequent
to the month
of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor
of the entire principal balance of a Mortgage Loan.
43
<PAGE>
Principal Remittance Amount: With respect to any Distribution Date,
the
amount equal to the sum of the following amounts (without
duplication) with
respect to the related Due Period: (i) each scheduled payment of
principal on a
Mortgage Loan due during such Due Period and received by the
Servicer on or
prior to the Determination Date or advanced by the Servicer prior
to the related
Remittance Date (including the portion of Insurance Proceeds or
Condemnation
Proceeds allocable to principal), and all Principal Prepayments
received during
the related Prepayment Period, (ii) the Liquidation Proceeds on the
Mortgage
Loans allocable to principal actually collected by the Servicer
during the
related Prepayment Period, (iii) the portion of the purchase price
allocable to
principal with respect to each Deleted Mortgage Loan, the
repurchase obligation
for which arose during the related Prepayment Period, that was
repurchased
during the period from the prior Distribution Date through the
Remittance Date
for the current Distribution Date, (iv) the principal portion of
all
Substitution Adjustment Amounts with respect to the substitutions
of Mortgage
Loans that occur during the calendar month in which such
Distribution Date
occurs and (v) the allocable portion of the proceeds received with
respect to
the termination of the Trust Fund (to the extent such proceeds
relate to
principal), less any amounts payable or reimbursable to the
Servicer, the Master
Servicer, the Trust Administrator or the Trustee hereunder on such
Distribution
Date to the extent not already reimbursed or paid from the Group 1
Interest
Remittance Amount or the Group 2 Interest Remittance Amount.
Private Certificates: As defined in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated December 8,
2005,
relating to the Offered Certificates.
PTCE
95-60: As defined in Section 5.02(b).
PUD:
A planned unit development.
Purchase Agreement: The Mortgage Loan Purchase Agreement, dated as
of
December 1, 2005, by and between Fremont and the Depositor.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary
Statement. If such organization or a successor is no longer in
existence,
"Rating Agency" shall be such nationally recognized statistical
rating
organization, or other comparable Person, as is designated by the
Depositor,
notice of which designation shall be given to the Trustee.
References herein to
a given rating or rating category of a Rating Agency shall mean
such rating
category without giving effect to any modifiers. For purposes of
Section
10.05(c), the addresses for notices to each Rating Agency shall be
the address
specified therefor in the definition corresponding to the name of
such Rating
Agency, or such other address as either such Rating Agency may
hereafter furnish
to the Depositor and the Servicer.
Realized Loss Percentage: For purposes of the Servicer Termination
Test and
the Servicer Enhanced Review Test, the percentage produced by the
following
calculation: (i) (a) the aggregate amount of cumulative Realized
Losses incurred
on the Mortgage Loans since the Cut-off Date through the last day
of the related
Due Period, minus (b) any amount received with respect to Realized
Losses on the
Mortgage Loans subsequent to a Final Recovery Determination being
made with
respect to the Mortgage Loans, divided by (ii) the aggregate Stated
Principal
44
<PAGE>
Balance of the Mortgage Loans as of the Cut-off Date; provided
however, that for
purposes of this definition, the term "Realized Losses" shall not
include Debt
Service Reductions or Deficient Valuations.
Realized Losses: With
respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the
unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and
unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net
of the expenses incurred by the Servicer in connection with the
liquidation of
such Liquidated Mortgage Loan and net of any amount of unreimbursed
Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business
on the Business Day immediately preceding such Distribution Date;
provided,
however, that for any Certificate issued in definitive form, the
Record Date
shall be the close of business on the last day of the calendar
month immediately
preceding the related Distribution Date (or if such day is not a
Business Day,
on the immediately preceding Business Day).
Reference Bank: As defined in Section 4.04.
Regular Certificates: As defined in the Preliminary Statement.
Relief Act Interest Shortfall: With respect to any Distribution
Date and
any Mortgage Loan, any reduction in the amount of interest
collectible on such
Mortgage Loan for the most recently ended Due Period as a result of
the
application of the Servicemembers Civil Relief Act, as amended, or
any similar
state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
Section 860D of the Code.
REMIC I Interest Loss Allocation Amount: With respect to any
Distribution
Date, an amount equal to (a) the product of (i) 50% of the
aggregate Stated
Principal Balance of the Mortgage Loans and related REO Properties
then
outstanding and (ii) the Uncertificated REMIC I Pass-Through Rate
for REMIC I
Regular Interest LTAA minus the Marker Rate, divided by (b) 12.
REMIC I Marker Allocation Percentage: 50% of any amount payable
from or
loss attributable to the Mortgage Loans, which shall be allocated
to REMIC I
Regular Interest LTAA, REMIC I Regular Interest LT1A1, REMIC I
Regular Interest
LT2A1, REMIC I Regular Interest LT2A2, REMIC I Regular Interest
LT2A3, REMIC I
Regular Interest LT2A4, REMIC I Regular Interest LTM1, REMIC I
Regular Interest
LTM2, REMIC I Regular Interest LTM3, REMIC I Regular Interest LTM4,
REMIC I
Regular Interest LTM5, REMIC I Regular Interest LTM6, REMIC I
Regular Interest
LTM7, REMIC I Regular Interest LTM8, REMIC I Regular Interest LTM9,
REMIC I
Regular Interest LTB1, REMIC I Regular Interest LTB2A, REMIC I
Regular Interest
LTB2B, REMIC I Regular Interest LTB2C, REMIC I Regular Interest
LTB2D, REMIC I
Regular Interest LTZZ and REMIC I Regular Interest LTP.
45
<PAGE>
REMIC I Overcollateralization Target Amount: 0.50% of the
Overcollateralization Target Amount.
REMIC I Overcollateralized Amount: With respect to any date of
determination, (i) 0.50% of the aggregate Uncertificated Principal
Balances of
the REMIC I Regular Interests minus (ii) the aggregate of the
Uncertificated
Principal Balances of REMIC I Regular Interest LT1A1, REMIC I
Regular Interest
LT2A1, REMIC I Regular Interest LT2A2, REMIC I Regular Interest
LT2A3, REMIC I
Regular Interest LT2A4, REMIC I Regular Interest LTM1, REMIC I
Regular Interest
LTM2, REMIC I Regular Interest LTM3, REMIC I Regular Interest LTM4,
REMIC I
Regular Interest LTM5, REMIC I Regular Interest LTM6, REMIC I
Regular Interest
LTM7, REMIC I Regular Interest LTM8, REMIC I Regular Interest LTM9,
REMIC I
Regular Interest LTB1, REMIC I Regular Interest LTB2A, REMIC I
Regular Interest
LTB2B, REMIC I Regular Interest LTB2C, REMIC I Regular Interest
LTB2D, and REMIC
I Regular Interest LTP, in each case as of such date of
determination.
REMIC I Principal Loss Allocation Amount: With respect to any
Distribution
Date, an amount equal to (a) the product of (i) 50% of the
aggregate Stated
Principal Balance of the Mortgage Loans and related REO Properties
then
outstanding and (ii) 1 minus a fraction, the numerator of which is
two times the
aggregate of the Uncertificated Principal Balances of REMIC I
Regular Interest
LT1A1, REMIC I Regular Interest LT2A1, REMIC I Regular Interest
LT2A2, REMIC I
Regular Interest LT2A3, REMIC I Regular Interest LT2A4, REMIC I
Regular Interest
LTM1, REMIC I Regular Interest LTM2, REMIC I Regular Interest LTM3,
REMIC I
Regular Interest LTM4, REMIC I Regular Interest LTM5, REMIC I
Regular Interest
LTM6, REMIC I Regular Interest LTM7, REMIC I Regular Interest LTM8,
REMIC I
Regular Interest LTM9, REMIC I Regular Interest LTB1, REMIC I
Regular Interest
LTB2A, REMIC I Regular Interest LTB2B, REMIC I Regular Interest
LTB2C, REMIC I
Regular Interest LTB2D, and the denominator of which is the
aggregate of the
Uncertificated Principal Balances of REMIC I Regular Interest
LT1A1, REMIC I
Regular Interest LT2A1, REMIC I Regular Interest LT2A2, REMIC I
Regular Interest
LT2A3, REMIC I Regular Interest LT2A4, REMIC I Regular Interest
LTM1, REMIC I
Regular Interest LTM2, REMIC I Regular Interest LTM3, REMIC I
Regular Interest
LTM4, REMIC I Regular Interest LTM5, REMIC I Regular Interest LTM6,
REMIC I
Regular Interest LTM7, REMIC I Regular Interest LTM8, REMIC I
Regular Interest
LTM9, REMIC I Regular Interest LTB1, REMIC I Regular Interest
LTB2A, REMIC I
Regular Interest LTB2B, REMIC I Regular Interest LTB2C, REMIC I
Regular Interest
LTB2D and REMIC I Regular Interest LTZZ.
REMIC I Regular Interest LTAA: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTAA shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT1A1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LT1A1 shall accrue
46
<PAGE>
interest at the related Uncertificated REMIC I Pass-Through Rate in
effect from
time to time, and shall be entitled to distributions of principal,
subject to
the terms and conditions hereof, in an aggregate amount equal to
its initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I Regular Interest LT2A1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LT2A1 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT2A2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LT2A2 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT2A3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LT2A3 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT2A4: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LT2A4 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTM1 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in
47
<PAGE>
REMIC I for purposes of the REMIC Provisions. REMIC I Regular
Interest LTM2
shall accrue interest at the related Uncertificated REMIC I
Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of
principal,
subject to the terms and conditions hereof, in an aggregate amount
equal to its
initial Uncertificated Principal Balance as set forth in the
Preliminary
Statement hereto.
REMIC I Regular Interest LTM3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTM3 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM4: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTM4 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM5: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTM5 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM6: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTM6 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM7: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTM7 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
48
<PAGE>
REMIC I Regular Interest LTM8: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTM8 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTM9: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTM9 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTB1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTB1 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTB2A: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTB2 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTB2B: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTB2B shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTB2C: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTB2C shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
49
<PAGE>
REMIC I Regular Interest LTB2D: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTB2D shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTP: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTP shall accrue interest at the related
Uncertificated REMIC I
Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT1SUB: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LT1SUB shall accrue interest at the related
Uncertificated
REMIC I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance asset
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT1GRP: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LT1GRP shall accrue interest at the related
Uncertificated
REMIC I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance asset
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT2SUB: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LT2SUB shall accrue interest at the related
Uncertificated
REMIC I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance asset
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LT2GRP: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LT2GRP shall accrue interest at the related
Uncertificated
REMIC I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance asset
forth in the Preliminary Statement hereto.
50
<PAGE>
REMIC I Regular Interest LTXX: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTXX shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance asset
forth in the Preliminary Statement hereto.
REMIC I Regular Interest LTZZ: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
regular interest in REMIC I for purposes of the REMIC Provisions.
REMIC I
Regular Interest LTZZ shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I Regular Interests: REMIC I Regular Interest LTAA, REMIC I
Regular
Interest LT1A1, REMIC I Regular Interest LT2A1, REMIC I Regular
Interest LT2A2,
REMIC I Regular Interest LT2A3, REMIC I Regular Interest LT2A4,
REMIC I Regular
Interest LTM1, REMIC I Regular Interest LTM2, REMIC I Regular
Interest LTM3,
REMIC I Regular Interest LTM4, REMIC I Regular Interest LTM5, REMIC
I Regular
Interest LTM6, REMIC I Regular Interest LTM7, REMIC I Regular
Interest LTM8,
REMIC I Regular Interest LTM9, REMIC I Regular Interest LTB1, REMIC
I Regular
Interest LTB2A, REMIC I Regular Interest LTB2B, REMIC I Regular
Interest LTB2C,
REMIC I Regular Interest LTB2D, REMIC I Regular Interest LT1GRP,
REMIC I Regular
Interest LT1SUB, REMIC I Regular Interest LT2GRP, REMIC I Regular
Interest
LT2SUB, REMIC I Regular Interest LTP and REMIC I Regular Interest
LTZZ.
REMIC I Sub WAC Allocation Percentage: 50% of any amount payable
from or
loss attributable to the Mortgage Loans, which shall be allocated
to REMIC I
Regular Interest LT1SUB, REMIC I Regular Interest LT1GRP, REMIC I
Regular
Interest LT2SUB, REMIC I Regular Interest LT2GRP and REMIC I
Regular Interest
LTXX.
REMIC I Subordinated Balance Ratio: The ratio among the
Uncertificated
Principal Balances of each REMIC I Regular Interest ending with the
designation
"SUB," equal to the ratio among, with respect to each such REMIC I
Regular
Interest, the excess of (x) the aggregate Stated Principal Balance
of the
Mortgage Loans in the related Loan Group over (y) the current Class
Certificate
Balance of the Class A Certificates in the related Loan Group.
REMIC II Uncertificated Principal Balance: As of the Closing Date,
the
REMIC II Uncertificated Principal Balance of the Class P Interest
shall equal
the amount set forth in the Preliminary Statement hereto as its
initial REMIC II
Uncertificated Principal Balance. On each Distribution Date, the
REMIC II
Uncertificated Principal Balance of the Class P Interest shall be
reduced by all
distributions of principal made on the Class P Certificate on such
Distribution
Date pursuant to Section 4.02. With respect the Class C Interest,
the excess if
any of the then aggregate Uncertificated Principal Balance of the
REMIC I
Regular Interests over the aggregate Certificate Balance of the
Offered
Certificates and the Class P Certificates then outstanding. The
51
<PAGE>
REMIC II Uncertificated Principal Balance of any such REMIC II
Uncertificated
Regular Interest shall never be less than zero.
REMIC II Uncertificated Regular Interest: The Class C Interest and
the
Class P Interest.
REMIC Provisions: 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 promulgated thereunder, as the foregoing may be in
effect from time
to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, no later
than 12:00
PM, Central Time on the Business Day immediately preceding such
Distribution
Date.
REO
Disposition: The final sale by the Servicer of any REO
Property.
REO
Imputed Interest: As to any REO Property, for any period, an
amount
equivalent to interest (at the Mortgage Interest Rate net of the
Servicing Fee
Rate that would have been applicable to the related Mortgage Loan
had it been
outstanding) on the unpaid principal balance of the Mortgage Loan
as of the date
of acquisition thereof (as such balance is reduced pursuant to
Section 3.15 by
any income from the REO Property treated as a recovery of
principal).
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.
Reporting Date: The 18th day of each calendar month or the
immediately
preceding Business Day if the 18th is not a Business Day.
Repurchase Price: With respect to any Mortgage Loan, an amount
equal to the
sum of (i) the unpaid principal balance of such Mortgage Loan as of
the date of
repurchase, (ii) interest on such unpaid principal balance of such
Mortgage Loan
at the Mortgage Interest Rate from the last date through which
interest has been
paid and distributed to the Trust Administrator to the date of
repurchase, (iii)
all unreimbursed Servicing Advances and (iv) all expenses incurred
by the
Servicer, the Trust, the Trust Administrator or the Trustee, as the
case may be,
in respect of a breach or defect, including, without limitation,
(a) expenses
arising out of the Servicer's, the Trust Administrator's or
Trustee's, as the
case may be, enforcement of the Originator's repurchase obligation,
to the
extent not included in clause (iii), and (b) any costs and damages
incurred by
the Trust in connection with any violation by such Mortgage Loan of
any
predatory lending law or abusive lending law.
Request for Release: The Request for Release submitted by the
Servicer to
the Trust Administrator, substantially in the form of Exhibit
J.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee means
any
officer in the Corporate Trust Office with direct responsibility
for the
administration of this Agreement and any other officer to whom a
particular
matter is referred because of such officer's knowledge of and
familiarity with
the particular subject; and when used with respect to the Trust
Administrator
52
<PAGE>
means any vice president, any assistant vice president, any
assistant secretary,
any assistant treasurer, any associate or any other officer of the
Trustee or
the Trust Administrator customarily performing functions similar to
those
performed by any of the above designated officers who at such time
shall be
officers to whom, with respect to a particular matter, such matter
is referred
because of such officer's knowledge of and familiarity with the
particular
subject and who shall have direct responsibility for the
administration of this
Agreement.
Rolling Three-Month
Delinquency Rate: With respect to any Distribution
Date, the weighted average of the Delinquency Rates for each of
three calendar
months immediately preceding such Distribution Date; provided, that
with respect
to the first two Distribution Dates, it shall refer to the
preceding one or two
calendar months, as appropriate.
Rule
144A Letter: As defined in Section 5.02(b).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on
any Due Date allocable to principal and/or interest on such
Mortgage Loan which,
unless otherwise specified herein, shall give effect to any related
Debt Service
Reduction and any Deficient Valuation that affects the amount of
the monthly
payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: For any Distribution Date, the
fraction,
expressed as a percentage, the numerator of which is the sum of (i)
the
aggregate Certificate Principal Balance of the Subordinate
Certificates and the
Overcollateralized Amount (which, for purposes of this definition,
will not be
less than zero), and the denominator of which is the aggregate
Stated Principal
Balance of the Mortgage Loans, after giving effect to distributions
on that
Distribution Date. The initial Senior Enhancement Percentage is
equal to
approximately 24.80% of the aggregate Stated Principal Balance of
the mortgage
loans as of the Cut-off Date.
Senior Principal Distribution Amount: With respect to any
Distribution
Date, the sum of the Group 1 Senior Principal Distribution Amount
and Group 2
Senior Principal Distribution Amount, as applicable.
Servicer: Fremont, and if a successor servicer is appointed
hereunder, such
successor servicer.
Servicer Certification: A written certification signed by an
officer of the
Servicer that complies with (i) the Sarbanes-Oxley Act of 2002, as
amended from
time to time, and (ii) the February 21, 2003 Statement by the Staff
of the
Division of Corporation Finance of the Securities and Exchange
Commission
Regarding Compliance by Asset-Backed Issuers with Exchange Act
Rules 13a-14 and
15d-14, as in effect from time to time; provided that if, after the
Closing Date
(a) the Sarbanes-Oxley Act of 2002 is amended, (b) the Statement
referred to in
clause (ii) is modified or superseded by any subsequent statement,
rule or
regulation of the Securities and Exchange Commission or any
statement of a
division thereof, or (c) any future releases, rules and regulations
are
published by the Securities and Exchange Commission from time to
time pursuant
to the Sarbanes-Oxley Act of 2002, which in any such case affects
the form or
substance of the required certification and results in the
required
certification being, in the
53
<PAGE>
reasonable judgment of the Servicer, materially more onerous than
the form of
the required certification as of the Closing Date, the Servicer
Certification
shall be as agreed to by the Servicer and the Depositor following a
negotiation
in good faith to determine how to comply with any such new
requirements.
Servicer Enhanced Review Test: With respect to any Distribution
Date, the
Servicer will fail the Servicer Enhanced Review Test if both (i)
the outstanding
rating by Moody's of Fremont as a servicer of residential mortgage
loans is not
"SQ2" or better (including any +/- designation), and (ii) the
Realized Loss
Percentage for the Mortgage Loans exceeds the applicable
percentages set forth
below:
<TABLE>
<CAPTION>
DISTRIBUTION DATE
OCCURRING IN PERCENTAGE
------------------------------ ----------
<S>
<C>
January 2007 through December 2008 1.50%
January 2008 through December 2009 2.50%
January 2009 through December 2010 3.50%
January 2010 through December 2011 5.25%
January 2011 through December 2012 6.75%
January 2012 and thereafter
7.30%
</TABLE>
Servicer Event of Default: One or more of the events described in
Section
7.01(a).
Servicer Remittance Report: As defined in Section 4.03(d).
Servicer Termination Test: With respect to any Distribution Date,
the
Servicer will fail the Servicer Termination Test if the Realized
Loss Percentage
for the Mortgage Loans exceeds the applicable percentages set forth
below or
such other higher amounts as set by any of the Rating Agencies with
respect to
such Distribution Date:
<TABLE>
<CAPTION>
DISTRIBUTION DATE
OCCURRING IN PERCENTAGE
------------------------------ ----------
<S>
<C>
January 2007 through December 2008 1.75%
January 2008 through December 2009 2.75%
January 2009 through December 2010 3.75%
January 2010 through December 2011 5.50%
January 2011 through December 2012 7.00%
January 2012 and thereafter
8.00%
</TABLE>
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses
(including legal fees) incurred by the Servicer in the performance
of its
servicing obligations in connection with a default, delinquency or
other
unanticipated event, including, but not limited to, the cost of (i)
the
preservation, restoration, inspection and protection of a Mortgaged
Property,
(ii) any enforcement or judicial proceedings, including
foreclosures and
litigation, in respect of a particular Mortgage Loan, (iii) the
management
(including reasonable fees in connection therewith) and liquidation
of any REO
Property, and (iv) the performance of its obligations under
Sections 3.01, 3.09,
3.13 and 3.15. Servicing Advances also include any reasonable
"out-
54
<PAGE>
of-pocket" costs and expenses (including legal fees) incurred by
the Servicer in
connection with executing and recording instruments of
satisfaction, deeds of
reconveyance or Assignments of Mortgage in connection with any
satisfaction or
foreclosures in respect of any Mortgage Loan to the extent not
recovered from
the Mortgagor or otherwise payable under this Agreement. The
Servicer shall not
be required to make any Nonrecoverable Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and any
Distribution
Date, an amount equal to the product of (i) one-twelfth of the
Servicing Fee
Rate, and (ii) the Stated Principal Balance of such Mortgage Loan
as of the
first day of the calendar month preceding the month in which such
Distribution
Date occurs. Such fee shall be payable monthly, and shall be pro
rated for any
portion of a month during which the Mortgage Loan is serviced by
the Servicer
under this Agreement. The Servicing Fee is payable solely from the
interest
portion (including recoveries with respect to interest from
Liquidation
Proceeds, Insurance Proceeds, Condemnation Proceeds and proceeds
received with
respect to REO Properties, to the extent permitted by Section 3.11)
of such
Scheduled Payment collected by the Servicer or as otherwise
provided under
Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by
the Servicer consisting of originals or copies of all documents in
the Mortgage
File which are not delivered to the Trust Administrator in the
Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K
hereto.
Servicing Officer: Any officer of the Servicer involved in, or
responsible
for, the administration and servicing of the Mortgage Loans whose
name and
facsimile signature appear on a list of servicing officers
furnished to the
Trustee, the Master Servicer, the Trust Administrator and the
Depositor by the
Servicer on the Closing Date pursuant to this Agreement, as such
list may from
time to time be amended.
Servicing Rights: Any and all of the following: (a) all rights
and
obligations to service the Mortgage Loans; (b) any compensation for
servicing
the Mortgage Loans; (c) any late fees, penalties or similar
payments with
respect to the Mortgage Loans (other than prepayment penalties);
(d) all
agreements or documents creating, defining or evidencing any such
servicing
rights to the extent they relate to such servicing rights; (e) any
interest on
Escrow Accounts allowed by law or other similar payments with
respect to the
Mortgage Loans and any amounts actually collected with respect
thereto; (f) all
accounts and other rights to payment related to any of the property
described in
this paragraph; (g) the right to possess and use any and all
servicing files,
servicing records, data tapes, computer records, or other
information pertaining
to the Mortgage Loans to the extent relating to the past, present
or prospective
servicing of the Mortgage Loans; and (h) all rights, powers and
privileges
incident to any of the foregoing.
Servicing Transfer Costs: All reasonable out-of-pocket costs and
expenses
(including all extraordinary expenses) incurred by the Master
Servicer in
connection with the transfer of servicing from a terminated
Servicer, including,
without limitation, any such costs or expenses associated with the
complete
transfer of all servicing data and the completion, correction or
manipulation of
such servicing data as may be required by the Master Servicer to
correct any
55
<PAGE>
errors or insufficiencies in the servicing data or otherwise to
enable the
Master Servicer (or any successor Servicer appointed pursuant to
Section 7.02)
to service the Mortgage Loans properly and effectively.
Similar Law: As defined in Section 5.02.
Six-Month LIBOR Index: With respect to each applicable Adjustable
Rate
Mortgage Loan, the rate as determined on the basis of rates at
which six-month
U.S. dollar deposits are offered to prime banks in the London
interbank market
on such date as provided in the related Mortgage Note.
60+
Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which
any portion of a Scheduled Payment is, as of the last day of the
prior Due
Period, two months or more past due (without giving effect to any
grace period),
each Mortgage Loan in foreclosure, all REO Property and each
Mortgage Loan for
which the Mortgagor has filed for bankruptcy.
Standard & Poor's: Standard & Poor's, a division of The
McGraw-Hill
Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the
Preliminary Statement, for purposes of Section 10.05(b) the address
for notices
to Standard & Poor's shall be Standard & Poor's, 55 Water
Street, New York, New
York 10041, Attention: Residential Mortgage Surveillance Group -
Fremont 2005-E,
or such other address as Standard & Poor's may hereafter
furnish to the
Depositor, the Servicer, the Master Servicer, the Trust
Administrator and the
Trustee.
Start-up Day: As defined in Section 11.01(b).
Stated Principal Balance: As to each Mortgage Loan and as of any
date of
determination, (i) the principal balance of the Mortgage Loan at
the Cut-off
Date after giving effect to payments of principal due on or before
such date,
minus (ii) all amounts previously remitted to the Trustee with
respect to the
related Mortgage Loan representing payments or recoveries of
principal including
advances in respect of scheduled payments of principal. For
purposes of any
Distribution Date, the Stated Principal Balance of any Mortgage
Loan will give
effect to any scheduled payments of principal received by the
Servicer on or
prior to the related Determination Date or advanced by the Servicer
for the
related Remittance Date and any unscheduled principal payments and
other
unscheduled principal collections received during the related
Prepayment Period.
Stepdown Date: The earlier to occur of (a) the date on which the
aggregate
Class Certificate Balances of the Senior Certificates have been
reduced to zero,
and (b) the later to occur of (i) the Distribution Date in January
2009, and
(ii) the first Distribution Date on which the Credit Enhancement
Percentage
(calculated for this purpose only after taking into account
distributions of
principal on the Mortgage Loans but prior to distribution of the
Group 1
Principal Distribution Amount and the Group 2 Principal
Distribution Amount to
the holders of the Certificates then entitled to distributions of
principal on
such Distribution Date) is greater than or equal to 49.60%.
Subordinate Certificates: As specified in the Preliminary
Statement.
56
<PAGE>
Subordinate Net WAC Rate: For any Distribution Date, a per annum
rate equal
to the weighted average of the Group 1 Net WAC Rate and the Group 2
Net WAC Rate
based on (a) the excess of (i) the aggregate Stated Principal
Balance of the
Group 1 Mortgage Loans over (ii) the Certificate Principal Balance
of the Group
1 Senior Certificates and (b) the excess of (i) the aggregate
Stated Principal
Balance of the Group 2 Mortgage Loans over (ii) the Certificate
Principal
Balance of the Group 2 Senior Certificates. For federal income tax
purposes, for
any Distribution Date with respect to the REMIC II Regular
Interests the
ownership of which is represented by the Subordinate Certificates,
the economic
equivalent of such rate shall be expressed as the weighted average
(adjusted for
the actual number of days elapsed in the related Interest Accrual
Period) of the
Uncertificated REMIC I Pass-Through Rates on (a) REMIC I Regular
Interest
LT1SUB, subject to a cap and a floor equal to the weighted average
of the
Adjusted Net Mortgage Interest Rates of the Group 1 Mortgage Loans
and (b) REMIC
I Regular Interest LT2SUB, subject to a cap and a floor equal to
the weighted
average of the Adjusted Net Mortgage Interest Rates of the Group 2
Mortgage
Loans.
Subsequent Recoveries: Amounts recovered by the Servicer in respect
of a
liquidated Mortgage Loan in regard to which a Realized Loss has
occurred.
Subordinate Yield Maintenance Agreement: The yield maintenance
agreement
related to the Subordinate Certificates, dated as of December 20,
2005, between
the Trustee, on behalf of the Issuer, and the Counterparty.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Originator for
a Deleted Mortgage Loan which must, on the date of such
substitution, as
confirmed in a Request for Release, substantially in the form of
Exhibit J, (i)
have a Stated Principal Balance, after deduction of the principal
portion of the
Scheduled Payment due in the month of substitution, not in excess
of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) be accruing
interest at a
rate no lower than and not more than 1.00% per annum higher than,
that of the
Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no higher
than that of
the Deleted Mortgage Loan; (iv) have a remaining term to maturity
no greater
than (and not more than one year less than that of) the Deleted
Mortgage Loan;
and (v) comply with each representation and warranty set forth in
Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant
to Section 2.03(g).
Target Senior Enhancement Percentage: With respect to the Group 1
Senior
Certificates or the Group 2 Senior Certificates, as applicable, and
for any
Distribution Date, the greater of (i) 200% of the initial Senior
Enhancement
Percentage or (ii) the fraction, expressed as a percentage, the
numerator of
which is an amount equal to 0.50% of the aggregate Stated Principal
Balance of
the Mortgage Loans as of the Cut-off Date and the denominator of
which is
57
<PAGE>
the aggregate Stated Principal Balance of the Mortgage Loans as of
the end of
the related Due Period.
Tax
Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge
Telerate Service (or such other page as may replace that page on
that service
for displaying comparable rates or prices).
Termination Price: As defined in Section 9.01.
30-Day Delinquency: Each Mortgage Loan with respect to which any
portion of
a Scheduled Payment is, as of the last day of the prior Due Period,
one month
past due (without giving effect to any grace period).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest
in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a Trigger
Event
exists if (i) the Rolling Three Month Delinquency Rate as of the
last day of the
related Due Period, equals or exceeds 32.26% of the Credit
Enhancement
Percentage as of the last day of the prior Due Period or (ii) the
quotient
(expressed as a percentage) of (x) the aggregate amount of Realized
Losses
incurred since the Cut-off Date through the last day of the related
Prepayment
Period divided by (y) the Cut-off Date Pool Principal Balance,
exceeds the
applicable percentages set forth below with respect to such
Distribution Date:
<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN LOSS
PERCENTAGE
------------------------------
---------------
<S>
<C>
January 2008 through December 2008 1.50% for the first month,
plus an
additional 1/12th of 1.85% for each month
thereafter
January 2009 through December 2009 3.35% for the first month,
plus an
additional 1/12th of 1.90% for each month
thereafter
January 2010 through December 2010 5.25% for the first month,
plus an
additional 1/12th of 1.50% for each month
thereafter
January 2011 through December 2011 6.75% for the first month,
plus an
additional 1/12th of 0.80% for each month
thereafter
January 2012 and thereafter
7.55%
</TABLE>
Trust: The express trust created hereunder in Section 2.01(c).
Trust Administrator: Wells Fargo Bank, N.A., and its successors in
interest
and, if a successor trust administrator is appointed hereunder,
such successor.
58
<PAGE>
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the
Mortgage Loans and all interest and principal received on or with
respect
thereto after the related Cut-off Date, other than such amounts
which were due
on the Mortgage Loans on or before the related Cut-off Date; (ii)
the Collection
Account, Net WAC Rate Carryover Reserve Account, the Distribution
Account, and
all amounts deposited therein pursuant to the applicable provisions
of this
Agreement; (iii) property that secured a Mortgage Loan and has been
acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the
Yield
Maintenance Agreements, and (v) all proceeds of the conversion,
voluntary or
involuntary, of any of the foregoing.
Trust REMIC: Any of REMIC I, REMIC II, REMIC III and REMIC IV.
Trustee: HSBC Bank USA, National Association, and its successors
in
interest and, if a successor trustee is appointed hereunder, such
successor.
Uncertificated Accrued Interest: With respect to each REMIC I
Regular
Interest on each Distribution Date, an amount equal to one month's
interest at
the related Uncertificated REMIC I Pass-Through Rate on the
Uncertificated
Principal Balance of such REMIC I Regular Interest. In each case,
Uncertificated
Accrued Interest will be reduced by any Prepayment Interest
Shortfalls and
Relief Act Interest Shortfalls (allocated to such REMIC I Regular
Interests
based on their respective entitlements to interest irrespective of
any
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
for such
Distribution Date). Uncertificated Accrued Interest with respect to
each
Distribution Date and each REMIC I Regular Interest shall be
reduced by Realized
Losses, if any, allocated to such REMIC I Regular Interest unless
such Realized
Loss is restored through Subsequent Recoveries. With respect to the
Class C
Interest, the interest accrued at its Pass-Through Rate on its
Notional Amount.
Uncertificated Principal Balance: The amount of any REMIC I
Regular
Interest outstanding as of any date of determination. As of the
Closing Date,
the Uncertificated Balance of each REMIC I Regular Interest shall
equal the
amount set forth in the Preliminary Statement hereto as its
initial
uncertificated balance. On each Distribution Date, the
Uncertificated Principal
Balance of each REMIC I Regular Interest shall be reduced by all
distributions
of principal made on such REMIC I Regular Interest on such
Distribution Date
pursuant to Section 4.08 and, if and to the extent necessary and
appropriate,
shall be further reduced on such Distribution Date by Realized
Losses as
provided in Section 4.08 or increased by Subsequent Recoveries
through the
application of Available Funds. The Uncertificated Balance of REMIC
I Regular
Interest LTZZ shall be increased by interest deferrals as provided
in Section
4.08. The Uncertificated Balance of each REMIC I Regular Interest
shall never be
less than zero.
As
of the Closing Date, the Uncertificated Balance of the Class P
Interest
shall equal the amount set forh in the Preliminary Statement hereto
as its
initial Uncertificated Principal Balance. On each Distribution
Date, the
Uncertificated Principal Balance of the Class P Interest shall be
reduced by all
distributions of principal made on the Class P Certificate on such
Distribution
Date pursuant to Section 4.02. With respect to the Class C
Interest, the excess
if any of the then aggregate Uncertificated Principal Balance of
the REMIC I
Regular Interests over the aggregate Class Certificate Balance of
the LIBOR
Certificates and the Class P Certificates then outstanding.
59
<PAGE>
Uncertificated REMIC I Pass-Through Rate: With respect to REMIC I
Regular
Interest LTAA, REMIC I Regular Interest LT1A1, REMIC I Regular
Interest LT1A2,
REMIC I Regular Interest LT2A1, REMIC I Regular Interest LT2A2,
REMIC I Regular
Interest LT2A3, REMIC I Regular Interest LT2A4, REMIC I Regular
Interest LTM1,
REMIC I Regular Interest LTM2, REMIC I Regular Interest LTM3, REMIC
I Regular
Interest LTM4, REMIC I Regular Interest LTM5, REMIC I Regular
Interest LTM6,
REMIC I Regular Interest LTM7, REMIC I Regular Interest LTM8, REMIC
I Regular
Interest LTM9, REMIC I Regular Interest LTB1, REMIC I Regular
Interest LTB2A,
REMIC I Regular Interest LTB2B, REMIC I Regular Interest LTB2C,
REMIC I Regular
Interest LTB2D, REMIC I Regular Interest LT1SUB, REMIC I Regular
Interest
LT2SUB, REMIC I Regular Interest LTXX, REMIC I Regular Interest
LTZZ, and REMIC
I Regular Interest LTP, the weighted average of the Adjusted Net
Mortgage
Interest Rate. With respect to REMIC I Regular Interest LT1GRP, the
Group 1 Net
WAC Rate. With respect REMIC I Regular Interest LT2GRP, the Group 2
Net WAC
Rate.
Underwriters' Exemption: Any exemption listed in footnote 1 of, and
amended
by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any
successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to
the
Purchase Agreement.
Unpaid Interest Amounts: For any class of certificates and any
Distribution
Date will equal the sum of (1) 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 Interest Amount from previous Distribution Dates
exceeds (y)
the amount distributed in respect of interest on such class on such
immediately
preceding Distribution Date, and (2) interest on the amount in
clause (1) for
the related Interest Accrual Period at the applicable Pass-through
Rate (to the
extent permitted by applicable law).
U.S.
Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes)
created or
organized in the United States or under the laws of the United
States or of any
State thereof, including, for this purpose, the District of
Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes)
organized in
the United States or under the laws of the United States or of any
state
thereof, including, for this purpose, the District of Columbia
(unless provided
otherwise by future Treasury regulations); (iv) an estate whose
income is
includible in gross income for United States income tax purposes
regardless of
its source; or (v) a trust, if a court within the United States is
able to
exercise primary supervision over the administration of the trust
and one or
more U.S. Persons have authority to control all substantial
decisions of the
trust. Notwithstanding the last clause of the preceding sentence,
to the extent
provided in Treasury regulations, certain trusts in existence on
August 20,
1996, and treated as U.S. Persons prior to such date, may elect to
continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates
which is allocated to any Certificate. As of any date of
determination, (a) 1%
of all Voting Rights shall be allocated to the Class C
Certificates, if any
(such Voting Rights to be allocated among the holders of
Certificates of each
such Class in accordance with their respective Percentage
60
<PAGE>
Interests), (b) 1% of all Voting Rights shall be allocated to the
Class P
Certificates, if any, and (c) the remaining Voting Rights shall be
allocated
among Holders of the remaining Classes of Certificates in
proportion to the
Certificate Balances of their respective Certificates on such
date.
Yield Maintenance Agreement: Any or all of the Group 1 Senior
Yield
Maintenance Agreement, the Group 2 Senior Yield Maintenance
Agreement or the
Subordinate Yield Maintenance Agreement, as the context
requires.
YMA
Payments: The payments made to, and received by, the Trust
Administrator, on behalf of the Issuer, under the Yield Maintenance
Agreements.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.
The
Depositor, concurrently with the execution and delivery hereof,
hereby
sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for
the benefit of the Certificateholders, without recourse, all the
right, title
and interest of the Depositor in and to the Trust Fund, together
with all rights
of the Depositor under the Yield Maintenance Agreements (if any),
and the
Trustee, on behalf of the Trust, hereby accepts the Trust Fund.
(a)
In connection with the transfer and assignment of each Mortgage
Loan,
the Depositor has delivered or caused to be delivered to the
Trustee or the
Trust Administrator, as applicable, for the benefit of the
Certificateholders,
the following documents or instruments with respect to each
Mortgage Loan so
assigned:
(i) the original Mortgage Note bearing all intervening
endorsements
showing a complete chain of endorsement from the originator to the
last
endorsee, endorsed "Pay to the order of _____________, without
recourse"
and
signed (which may be by facsimile signature) in the name of the
last
endorsee by an authorized officer. To the extent that there is no
room on
the
face of the Mortgage Notes for endorsements, the endorsement may
be
contained on an allonge, if state law so allows and the Trustee is
so
advised by the Depositor that state law so allows;
(ii) the original of any guarantee executed in connection with
the
Mortgage Note;
(iii) with respect to each Mortgage Loan, the original Mortgage
with
evidence of recording thereon or a certified true copy of such
Mortgage
submitted for recording. If in connection with any Mortgage Loan,
the
Originator cannot deliver or cause to be delivered the original
Mortgage
with
evidence of recording thereon on or prior to the Closing Date
because
of a
delay caused by the public recording office where such Mortgage
has
been
delivered for recordation or because such Mortgage has been lost
or
because such public recording office retains the original
recorded
Mortgage, the Originator (to the extent that it has not
previously
delivered the same to the Depositor, the
61
<PAGE>
Trustee or the Trust Administrator) shall deliver or cause to be
delivered
to
the Trustee or Trust Administrator, (1) a photocopy of such
Mortgage,
certified by the Originator (or certified by the title company,
escrow
agent, or closing attorney) to be a true and complete copy of such
Mortgage
dispatched to the appropriate public recording office for
recordation; and
(2)
upon receipt thereof by the Originator, the original recorded
Mortgage,
or,
in the case of a Mortgage 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, a copy of such Mortgage
certified
by
such public recording office to be a true and complete copy of
the
original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation
or
extension agreements (if provided), with evidence of recording
thereon or a
certified true copy of such agreement submitted for recording;
(v) except with respect to each MERS Designated Mortgage Loan,
the
original Assignment of Mortgage for each Mortgage Loan endorsed in
blank
and
in recordable form;
(vi) with respect to each Mortgage Loan, the originals of all
intervening Assignments of Mortgage (if any) evidencing a complete
chain of
assignment from the applicable originator (or MERS with respect to
each
MERS
Designated Mortgage Loan) to the last endorsee with evidence of
recording thereon, or if any such intervening assignment has not
been
returned from the applicable recording office or has been lost or
if such
public recording office retains the original recorded Assignments
of
Mortgage, the Originator (to the extent that it has not
previously
delivered the same to the Depositor, the Trustee or the Trust
Administrator) shall deliver or cause to be delivered to the
Trustee or the
Trust Administrator, (1) a photocopy of such intervening
assignment,
certified by the Originator (or certified by the title company,
escrow
agent, or closing attorney) to be a complete copy of such
intervening
Assignment of Mortgage
dispatched to the appropriate public recording
office for recordation upon receipt thereof by the Originator, and
(2) the
original recorded intervening assignment or in the case where
an
intervening assignment is lost after recordation in a public
recording
office, a copy of such intervening assignment certified by such
public
recording office to be a true and complete copy of the original
recorded
intervening assignment;
(vii) the original or duplicate lender's title policy and any
riders
thereto or, any one of an original title binder, an original or
copy of the
preliminary title report or an original or copy of the title
commitment,
and
if, copies then certified by the title company;
(viii) a security agreement, chattel mortgage or equivalent
document
executed in connection with the Mortgage (if provided); and
(ix) original powers of attorney, if applicable, with evidence
of
recording thereon, if required.
62
<PAGE>
Each
Mortgage Loan for which a Mortgage Note is missing shall be
evidenced
by a lost note affidavit as of the Closing Date. In the event, for
purposes of
the Closing Date, one or more lost note affidavits are provided to
cover
multiple missing Mortgage Notes, the Originator shall deliver to
the Trustee or
the Trust Administrator the applicable individual lost note
affidavits within
ten (10) Business Days of the Closing Date. If the Originator fails
to deliver
the required individual lost note affidavits within the specified
period of
time, the Trustee or the Trust Administrator shall notify the
Originator to take
such remedial actions, including, without limitation, the
repurchase by the
Originator of such Mortgage Loan within 30 days of the Closing
Date.
The
Originator shall deliver to the Trustee or the Trust Administrator
the
applicable recorded document promptly upon receipt from the
respective recording
office but in no event later than 150 days from the Closing
Date.
If
any Mortgage has been recorded in the name of Mortgage
Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment
of Mortgage in
favor of the Trustee will be required to be prepared or delivered
and instead,
the Servicer shall take all reasonable actions as are necessary at
the expense
of the Depositor to cause the Trustee to be shown as the owner of
the related
Mortgage Loan on the records of MERS for the purpose of the system
of recording
transfers of beneficial ownership of mortgages maintained by
MERS.
From
time to time, the Originator shall forward with respect to the
Mortgage Loans, to the Trustee or the Trust Administrator
additional original
documents, and additional documents evidencing an assumption,
modification,
consolidation or extension of a Mortgage Loan approved by the
Originator in
accordance with the terms of this Agreement. All such mortgage
documents held by
the Trustee or the Trust Administrator as to each Mortgage Loan
shall constitute
the "Custodial File."
The
requirements of this paragraph relate only to Mortgage Loans that
are
not MERS Designated Mortgage Loans. On or prior to the Closing
Date, the
Originator shall deliver to the Trustee or Trust Administrator
Assignments of
Mortgages, in blank, for each Mortgage Loan (except with respect to
each MERS
Designated Mortgage Loan). The Originator shall cause such
Assignments of
Mortgage with completed recording information to be provided to the
Trustee or
the Trust Administrator in a reasonably acceptable manner. No later
than thirty
(30) Business Days following the later of the Closing Date and the
date of
receipt by the Servicer of the fully completed Assignments of
Mortgages in
recordable form, the Servicer shall promptly submit or cause to be
submitted for
recording, at the expense of the Originator at no expense to the
Trust Fund, the
Master Servicer, the Trust Administrator, the Trustee or the
Depositor in the
appropriate public office for real property records, each
Assignment of Mortgage
referred to in Section 2.01(a)(vi). Notwithstanding the foregoing,
however, for
administrative convenience and facilitation of servicing and to
reduce closing
costs, the Assignments of Mortgage shall not be required to be
completed and
submitted for recording with respect to any Mortgage Loan if the
Trustee, the
Trust Administrator and each Rating Agency have received an opinion
of counsel,
satisfactory in form and substance to the Trustee and Trust
Administrator and
each Rating Agency, to the effect that the recordation of such
Assignments of
Mortgage in any specific jurisdiction is not necessary to protect
the Trustee's
interest in the related Mortgage Note. If the Assignment of
Mortgage is to be
recorded, the Mortgage shall be assigned by the
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Originator at the Originator's expense to "HSBC Bank USA, National
Association,
as trustee under the Pooling and Servicing Agreement dated as of
December 1,
2005, Fremont Home Loan Trust 2005-E." In the event that any such
assignment is
lost or returned unrecorded because of a defect therein, the
Originator shall
promptly prepare a substitute assignment to cure such defect and
thereafter
cause each such assignment to be duly recorded.
On
or prior to the Closing Date, the Depositor shall deliver to
the
Trustee, the Servicer and the Trust Administrator a copy of the
Data Tape
Information in an electronic, machine readable medium in a form
mutually
acceptable to the Depositor, the Servicer, the Master Servicer, the
Trust
Administrator and the Trustee. Within ten (10) Business Days of the
Closing
Date, the Depositor shall deliver a copy of the complete Mortgage
Loan Schedule
to the Trustee, the Master Servicer, the Trust Administrator and
the Servicer.
In
the event, with respect to any Mortgage Loans, that such original
or
copy of any document submitted for recordation to the appropriate
public
recording office is not so delivered to the Trustee or the Trust
Administrator
within 150 days following the Closing Date, and in the event that
the Originator
does not cure such failure within 30 days of discovery or receipt
of written
notification of such failure from the Depositor, the related
Mortgage Loan
shall, upon the request of the Depositor, be repurchased by the
Originator at
the price and in the manner specified in Section 2.03. The
foregoing repurchase
remedy shall not apply in the event that the Originator cannot
deliver such
original or copy of any document submitted for recordation to the
appropriate
public recording office within the specified period due to a delay
caused by the
recording office in the applicable jurisdiction; provided, that the
Originator
shall instead deliver a recording receipt of such recording office
or, if such
recording receipt is not available, an officer's certificate of an
officer of
the Originator confirming that such document has been accepted for
recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in
those instances where the public recording office retains or loses
the original
Mortgage or assignment after it has been recorded, the obligations
of the
Originator shall be deemed to have been satisfied upon delivery by
the
Originator to the Trustee or the Trust Administrator prior to the
Closing Date
of a copy of such Mortgage or assignment, as the case may be,
certified (such
certification to be an original thereof) by the public recording
office to be a
true and complete copy of the recorded original thereof.
(b)
The Depositor does hereby establish, pursuant to the further
provisions
of this Agreement and the laws of the State of New York, an express
trust (the
"Trust") to be known, for convenience, as "Fremont Home Loan Trust
2005-E" and
HSBC Bank USA, National Association is hereby appointed as Trustee
in accordance
with the provisions of this Agreement.
(c)
The Trust shall have the capacity, power and authority, and the
Trustee
on behalf of the Trust is hereby authorized and directed, to accept
the sale,
transfer, assignment, set over and conveyance by the Depositor to
the Trust of
all the right, title and interest of the Depositor in and to the
Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to
Section 2.01(a)
and, solely in its capacity as Trustee on behalf of the
Certificateholders, to
enter into the Yield Maintenance Agreements.
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(d)
The parties hereto acknowledge and agree that it is the policy
and
intention of the Trust to acquire only Mortgage Loans meeting the
requirements
set forth in this Agreement, including without limitation, the
representation
and warranty set forth in paragraph II(l) of Schedule IV
hereto.
Section 2.02. Acceptance by the Trustee or Trust Administrator of
the
Mortgage Loans.
The
Trustee or the Trust Administrator on its behalf acknowledges
receipt
of the documents identified in its initial certification in the
form annexed
hereto as Exhibit E (the "Initial Certification"), and declares
that it, or the
Trust Administrator on its behalf, holds and will hold such
documents and the
other documents delivered to it pursuant to Section 2.01, and that
it 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. Each of
the Trustee and the Trust Administrator, as applicable, on its
behalf
acknowledges that it will maintain possession of the related
Mortgage Notes in
any of the states of Minnesota, California or Utah, unless
otherwise permitted
by the Rating Agencies.
Prior to and as a condition to the Closing, the Trustee shall
deliver, or
cause the Trust Administrator to deliver, via facsimile (with
original to follow
the next Business Day) to the Depositor, the Master Servicer and
the Servicer
the Initial Certification prior to the Closing Date, or as the
Depositor agrees,
on the Closing Date, certifying receipt of a Mortgage Note and
Assignment of
Mortgage for each Mortgage Loan with any exceptions thereon. The
Trustee or the
Trust Administrator, as applicable, shall not be responsible to
verify the
validity, sufficiency or genuineness of any document in any
Custodial File.
The
Trustee or the Trust Administrator, as applicable, shall ascertain
that
all documents in the Custodial File required to be reviewed by it
are in its
possession, and shall deliver to the Depositor, the Master Servicer
and the
Servicer the Initial Certification on the Closing Date, and shall
deliver to the
Depositor and the Servicer a Document Certification and Exception
Report, in the
form annexed hereto as Exhibit F, within 90 days after the Closing
Date to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan
Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan
specifically
identified in such certification as an exception and not covered by
such
certification): (i) all documents required to be received by it are
in its
possession; (ii) such documents have been reviewed by it and appear
regular on
their face and relate to such Mortgage Loan; (iii) based on its
examination and
only as to the foregoing documents, the information set forth in
items (i), (ii)
and (xii) of the Mortgage Loan Schedule and items (1), (2), (3) and
(13) of the
Data Tape Information respecting such Mortgage Loan is correct; and
(iv) each
Mortgage Note has been endorsed as provided in Section 2.01 of this
Agreement.
The Trustee or Trust Administrator, as applicable, shall not be
responsible to
verify the validity, sufficiency or genuineness of any document in
any Custodial
File.
The
Trustee or the Trust Administrator, as applicable, shall retain
possession and custody of each Custodial File in accordance with
and subject to
the terms and conditions set forth herein. The Servicer shall
promptly deliver
to the Trustee or the Trust Administrator, as applicable, upon the
execution or
receipt thereof, the originals of such other documents or
instruments
constituting the Custodial File as come into the possession of the
Servicer from
time to time.
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The
Originator shall deliver to the Servicer copies of all trailing
documents required to be included in the Custodial File at the same
time the
original or certified copies thereof are delivered to the Trustee
or the Trust
Administrator, as applicable, including but not limited to such
documents as the
title insurance policy and any other Mortgage Loan documents upon
return from
the public recording office. The documents shall be delivered by
the Originator
at the Originator's expense to the Servicer and in no event shall
the Servicer
be responsible for such expense.
Section 2.03. Representations, Warranties and Covenants of the
Originator
and the Servicer.
(a)
The Originator hereby makes the representations and warranties
set
forth in Schedule IV hereto to the Depositor, the Trust
Administrator and the
Trustee as of the Closing Date.
(b)
It is understood and agreed that the representations and warranties
set
forth in this Section 2.03 shall survive the transfer of the
Mortgage Loans by
the Depositor to the Trustee, and shall inure to the benefit of the
Depositor,
the Trust Administrator and the Trustee notwithstanding any
restrictive or
qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the
examination or failure to examine any Mortgage File. Upon discovery
by any of
the Originator, the Depositor, the Trustee, the Trust
Administrator, the Master
Servicer or the Servicer of a breach of any of the foregoing
representations and
warranties, the party discovering such breach shall give prompt
written notice
to the others.
(c)
Within 30 days of the earlier of either discovery by or notice to
the
Originator that any Mortgage Loan does not conform to the
requirements as
determined in the Trustee's or the Trust Administrator's review of
the related
Custodial File or within 60 days of the earlier of either discovery
by or notice
to the Originator of any breach of a representation or warranty set
forth in
Section 2.03(b), that materially and adversely affects the value of
any Mortgage
Loan or the interest of the Trustee or the Certificateholders
therein, the
Originator shall use its best efforts to cause to be remedied a
material defect
in a document constituting part of a Mortgage File or promptly to
cure such
breach in all material respects and, if such defect or breach
cannot be
remedied, the Originator shall, (i) if such 30- or 60-day period,
as applicable,
expires prior to the second anniversary of the Closing Date, remove
such related
Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and
substitute in
its place a Substitute Mortgage Loan, in the manner and subject to
the
conditions set forth in this Section 2.03, or (ii) repurchase such
Mortgage Loan
at the Repurchase Price; provided, however, that any such
substitution pursuant
to clause (i) above shall not be effected prior to the delivery to
the Trustee
and the Trust Administrator of the Opinion of Counsel required by
Section 2.04,
if any, and a Request for Release substantially in the form of
Exhibit J, and
the Mortgage File for any such Substitute Mortgage Loan; provided,
further, that
with respect to any representations and warranties which are made
to the best of
the Originator's knowledge, if it is discovered by the Originator,
the Servicer,
the Master Servicer, the Trust Administrator, the Depositor or the
Trustee that
the substance of such representation and warranty is inaccurate and
such
inaccuracy materially and adversely affects the value of the
related Mortgage
Loans or materially and adversely affects the interests of the
Trustee or the
Certificateholders therein or such inaccuracy materially and
adversely affects
the value of the related Mortgage Loan or materially and adversely
affects the
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interests of the Trustee or the Certificateholders therein in the
case of a
representation and warranty relating to a particular Mortgage
Loan,
notwithstanding the Originator's lack of knowledge with respect to
the substance
of such representation and warranty, such inaccuracy shall be
deemed a breach of
the applicable representation and warranty. In the event that a
breach which
materially and adversely affects the value of the related Mortgage
Loan or
Mortgage Loans, as the case may be, or the interests of the Trustee
or the
Certificateholders therein, shall involve any representation or
warranty set
forth in Schedule IV, and such breach cannot be cured within 60
days of the
earlier of either discovery by or notice to the Originator of such
breach, all
of the Mortgage Loans shall, at the Depositor's option, be
repurchased by the
Originator at the Repurchase Price. Notwithstanding the foregoing,
a breach
which causes a Mortgage Loan not to constitute a "qualified
mortgage" within the
meaning of Section 860G(a)(3) of the Code, or by the Originator of
any of the
representations and warranties set forth in clauses I(tt), I(uu) or
I(lll) of
Schedule IV, in each case, will be deemed automatically to
materially and
adversely affect the value of such Mortgage Loan and the interests
of the
Trustee and Certificateholders in such Mortgage Loan. In the event
that the
Trustee or the Trust Administrator receives notice of a breach by
the Originator
of any of the representations and warranties set forth in clauses
I(tt), I(uu)
or I(lll) of Schedule IV, the Trustee or the Trust Administrator
shall give
notice of such breach to the Originator and request the Originator
to repurchase
the Mortgage Loan at the Repurchase Price within sixty (60) days of
the
Originator's receipt of such notice. The Originator shall
repurchase each such
Deleted Mortgage Loan within 60 days of the earlier of discovery or
receipt of
notice with respect to each such Deleted Mortgage Loan.
(d)
With respect to any Substitute Mortgage Loan or Loans, the
Originator
shall deliver to the Trustee or the Trust Administrator for the
benefit of the
Certificateholders, the Mortgage Note, the Mortgage, the related
assignment of
the Mortgage, and such other documents and agreements as are
required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as
required by
Section 2.01. No substitution is permitted to be made in any
calendar month
after the Determination Date for such month. Scheduled Payments due
with respect
to Substitute Mortgage Loans in the Due Period of substitution
shall not be part
of the Trust Fund and will be retained by the Originator on the
next succeeding
Distribution Date. For the Due Period of substitution,
distributions to
Certificateholders will include the Scheduled Payment due on any
Deleted
Mortgage Loan for such Due Period and thereafter the Originator
shall be
entitled to retain all amounts received in respect of such Deleted
Mortgage
Loan.
(e)
In connection with any repurchase or substitution of a Mortgage
Loan
pursuant to this Section 2.03, the Servicer shall, based on
information provided
by the Originator, amend the Mortgage Loan Schedule for the benefit
of the
Certificateholders to reflect the removal of such Deleted Mortgage
Loan and the
substitution of the Substitute Mortgage Loan or Loans and the
Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee, the
Trust
Administrator and the Master Servicer. Upon such substitution, the
Substitute
Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all
respects, and the Originator shall be deemed to have made with
respect to such
Substitute Mortgage Loan or Loans, as of the date of substitution,
the
representations and warranties made pursuant to Section 2.03(b)
with respect to
such Mortgage Loan. Upon any such substitution and the deposit to
the Collection
Account of the amount required to be deposited therein in
connection with such
substitution as described in the following paragraph, the Trustee
or the Trust
Administrator, as applicable, shall release the
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Mortgage File held for the benefit of the Certificateholders
relating to such
Deleted Mortgage Loan to the Originator and shall execute and
deliver at the
direction of the Originator such instruments of transfer or
assignment prepared
by the Originator in each case without recourse, as shall be
necessary to vest
title in the Originator or its designee, the Trustee's interest in
any Deleted
Mortgage Loan substituted for pursuant to this Section 2.03.
(f)
For any month in which the Originator substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the Servicer
will determine the amount (if any) by which the aggregate unpaid
principal
balance of all such Substitute Mortgage Loans as of the date of
substitution is
less than the aggregate Stated Principal Balance of all such
Deleted Mortgage
Loans (after application of the scheduled principal portion of the
Scheduled
Payments due in the Due Period of substitution). The amount of such
shortage
(the "Substitution Adjustment Amount") plus an amount equal to the
aggregate of
any unreimbursed Advances with respect to such Deleted Mortgage
Loans shall be
remitted by the Originator to the Servicer for deposit into the
Collection
Account on or before the next Remittance Date.
(g)
In addition to such repurchase or substitution obligations, the
Originator shall indemnify the Depositor, any of its Affiliates,
the Servicer,
the Master Servicer, the Trust Administrator and the Trustee and
hold such
parties harmless against any losses, damages, penalties, fines,
forfeitures,
reasonable and necessary legal fees and related costs, judgments,
and other
costs and expenses resulting from any claim, demand, defense or
assertion based
on or grounded upon, or resulting from, a breach by the Originator
of any of its
representations and warranties contained in this Agreement.
(h)
In the event that a Mortgage Loan shall have been repurchased
pursuant
to this Agreement, the proceeds from such repurchase shall be
deposited in the
Collection Account by the Servicer pursuant to Section 3.10 on or
before the
next Remittance Date and upon such deposit of the Repurchase Price,
the delivery
of the Opinion of Counsel required by Section 2.04, if applicable,
and receipt
of a Request for Release in the form of Exhibit J hereto, the
Trustee or the
Trust Administrator, as applicable, shall release the related
Custodial File
held for the benefit of the Certificateholders to such Person as
directed by the
Servicer, and the Trustee shall execute and deliver at such
Person's direction
such instruments of transfer or assignment prepared by such Person,
in each case
without recourse, as shall be necessary to transfer title from the
Trustee. It
is understood and agreed that the obligation under this Agreement
of any Person
to cure, repurchase or replace any Mortgage Loan as to which a
breach has
occurred and is continuing, together with any related
indemnification
obligations, shall constitute the sole remedy against such Persons
respecting
such breach available to Certificateholders, the Depositor, the
Servicer, the
Master Servicer, the Trust Administrator or the Trustee on their
behalf.
The
representations and warranties made pursuant to this Section 2.03
shall
survive delivery of the respective Custodial Files to the Trustee
or Trust
Administrator for the benefit of the Certificateholders.
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Section 2.04. Delivery of Opinion of Counsel in Connection with
Substitution; Non-Qualified Mortgages.
(a)
Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.03 shall be made more than 90
days after the
Closing Date unless the Originator delivers to the Trustee and the
Trust
Administrator an Opinion of Counsel, which Opinion of Counsel shall
not be at
the expense of either the Trustee, the Trust Administrator or the
Trust Fund,
addressed to the Trustee and the Trust Administrator, to the effect
that such
substitution will not (i) result in the imposition of the tax on
"prohibited
transactions" on any Trust REMIC or contributions after the
Start-up Day, as
defined in Sections 860F(a)(2) and 860G(d) of the Code,
respectively or (ii)
cause any Trust REMIC to fail to qualify as a REMIC at any time
that any
Certificates are outstanding.
(b)
Upon discovery by the Depositor, the Originator, the Master
Servicer,
the Trust Administrator, the Servicer or the Trustee that any
Mortgage Loan does
not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3)
of the Code, the party discovering such fact shall promptly (and in
any event
within five (5) Business Days of discovery) give written notice
thereof to the
other parties. In connection therewith, the Trustee shall require
the Originator
to repurchase the affected Mortgage Loan within 30 days of the
earlier of
discovery or receipt of notice in the same manner as it would a
Mortgage Loan
for a breach of representation or warranty made pursuant to Section
2.03. The
Trustee shall reconvey to the Originator the Mortgage Loan to be
released
pursuant hereto in the same manner, and on the same terms and
conditions, as it
would a Mortgage Loan repurchased for breach of a representation or
warranty
contained in Section 2.03.
Section 2.05. Execution and Delivery of Certificates.
The
Trustee acknowledges the transfer and assignment to it of the
Trust
Fund and, concurrently with such transfer and assignment, the
Trust
Administrator has executed and delivered to or upon the order of
the Depositor,
the Certificates in authorized denominations evidencing directly or
indirectly
the entire ownership of the Trust Fund. The Trustee agrees to hold
the Trust
Fund and exercise the rights referred to above for the benefit of
all present
and future Holders of the Certificates.
Section 2.06. Representations and Warranties of the Depositor.
The
Depositor hereby represents, warrants and covenants to the Trustee,
the
Trust Administrator, the Master Servicer, the Servicer and the
Originator that
as of the date of this Agreement or as of such date specifically
provided
herein:
(a)
The Depositor is a corporat
