Exhibit 4.1


 


Execution
Copy


 


INDENTURE


 


among


 


FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES
2005-2,


 


Issuer


 


WELLS FARGO BANK, N.A.,


 


Trust Administrator


 


and


 


HSBC BANK USA, NATIONAL ASSOCIATION,


 


Indenture Trustee


 


 


Dated as of July 1, 2005


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE ONE

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Definitions

  	
   

  
	
  Section 1.02.

  	
  Incorporation by Reference of Trust
  Indenture Act

  	
   

  
	
  Section 1.03.

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  
	
   

  	
   

  	
   

  
	
  THE NOTES

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Form

  	
   

  
	
  Section 2.02.

  	
  Execution, Authentication and Delivery

  	
   

  
	
  Section 2.03.

  	
  Limitation on Transfer of Notes

  	
   

  
	
  Section 2.04.

  	
  Registration; Registration of Transfer and
  Exchange

  	
   

  
	
  Section 2.05.

  	
  Mutilated, Destroyed, Lost or Stolen Notes

  	
   

  
	
  Section 2.06.

  	
  Persons Deemed Owners

  	
   

  
	
  Section 2.07.

  	
  Payment of Principal and Interest

  	
   

  
	
  Section 2.08.

  	
  Cancellation

  	
   

  
	
  Section 2.09.

  	
  Release of Collateral

  	
   

  
	
  Section 2.10.

  	
  Book-Entry
  Notes

  	
   

  
	
  Section 2.11.

  	
  Notices to Clearing Agency

  	
   

  
	
  Section 2.12.

  	
  Definitive
  Notes

  	
   

  
	
  Section 2.13.

  	
  Tax
  Treatment

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  
	
   

  
	
  COVENANTS

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Payment of Principal and Interest

  	
   

  
	
  Section 3.02.

  	
  Maintenance of Office or Agency

  	
   

  
	
  Section 3.03.

  	
  Money for Payments to be Held in Trust

  	
   

  
	
  Section 3.04.

  	
  Existence

  	
   

  
	
  Section 3.05.

  	
  Protection of Collateral

  	
   

  
	
  Section 3.06.

  	
  Opinions as to Collateral

  	
   

  
	
  Section 3.07.

  	
  Performance of Obligations

  	
   

  
	
  Section 3.08.

  	
  Negative Covenants

  	
   

  
	
  Section 3.09.

  	
  Annual Statement as to Compliance

  	
   

  
	
  Section 3.10.

  	
  Treatment of Notes as Debt for Tax Purposes

  	
   

  
	
  Section 3.11.

  	
  [Reserved]

  	
   

  
	
  Section 3.12.

  	
  No Other Business

  	
   

  
	
  Section 3.13.

  	
  No Borrowing

  	
   

  
	
  Section 3.14.

  	
  [Reserved]

  	
   

  



 





















 


	
  Section 3.15.

  	
  Guarantees, Loans, Advances and Other
  Liabilities

  	
   

  
	
  Section 3.16.

  	
  Capital Expenditures

  	
   

  
	
  Section 3.17.

  	
  Removal of Trust Administrator

  	
   

  
	
  Section 3.18.

  	
  Restricted Payments

  	
   

  
	
  Section 3.19.

  	
  Notice of Events of Default

  	
   

  
	
  Section 3.20.

  	
  Further Instruments and Acts

  	
   

  
	
  Section 3.21.

  	
  Covenants of the Issuer

  	
   

  
	
  Section 3.22.

  	
  Representations and Warranties of the
  Issuer

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  
	
   

  
	
  SATISFACTION
  AND DISCHARGE

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Satisfaction and Discharge of Indenture

  	
   

  
	
  Section 4.02.

  	
  Application of Trust Money

  	
   

  
	
  Section 4.03.

  	
  Repayment of Moneys Held by Paying Agent

  	
   

  
	
  Section 4.04.

  	
  Trust Money Received by Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  
	
   

  	
   

  	
   

  
	
  REMEDIES

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Events of Default

  	
   

  
	
  Section 5.02.

  	
  Acceleration of Maturity; Rescission and
  Annulment

  	
   

  
	
  Section 5.03.

  	
  Collection of Indebtedness and Suits for
  Enforcement by Indenture Trustee

  	
   

  
	
  Section 5.04.

  	
  Remedies; Priorities

  	
   

  
	
  Section 5.05.

  	
  Optional Preservation of the Collateral

  	
   

  
	
  Section 5.06.

  	
  Limitation of Suits

  	
   

  
	
  Section 5.07.

  	
  Unconditional Rights of Noteholders To
  Receive Principal and Interest

  	
   

  
	
  Section 5.08.

  	
  Restoration of Rights and Remedies

  	
   

  
	
  Section 5.09.

  	
  Rights and Remedies Cumulative

  	
   

  
	
  Section 5.10.

  	
  Delay or Omission Not a Waiver

  	
   

  
	
  Section 5.11.

  	
  Control by Noteholders

  	
   

  
	
  Section 5.12.

  	
  Waiver of Past Defaults

  	
   

  
	
  Section 5.13.

  	
  Undertaking for Costs

  	
   

  
	
  Section 5.14.

  	
  Waiver of Stay or Extension Laws

  	
   

  
	
  Section 5.15.

  	
  Action on Notes

  	
   

  
	
  Section 5.16.

  	
  Performance and Enforcement of Certain
  Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  
	
   

  	
   

  	
   

  
	
  THE INDENTURE TRUSTEE

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Duties of Indenture Trustee

  	
   

  
	
  Section 6.02.

  	
  Rights of Indenture Trustee

  	
   

  
	
  Section 6.03.

  	
  Individual Rights of Indenture Trustee

  	
   

  
	
  Section 6.04.

  	
  Indenture Trustee’s Disclaimer

  	
   

  



 


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  Section 6.05.

  	
  Notice of Defaults

  	
   

  
	
  Section 6.06.

  	
  Reports by Indenture Trustee to Holders

  	
   

  
	
  Section 6.07.

  	
  Compensation and Indemnity

  	
   

  
	
  Section 6.08.

  	
  Replacement of Indenture Trustee

  	
   

  
	
  Section 6.09.

  	
  Successor Indenture Trustee by Merger

  	
   

  
	
  Section 6.10.

  	
  Appointment of Co-Indenture Trustee or
  Separate Indenture Trustee

  	
   

  
	
  Section 6.11.

  	
  Eligibility; Disqualification

  	
   

  
	
  Section 6.12.

  	
  Representations and Warranties

  	
   

  
	
  Section 6.13.

  	
  Preferential Collection of Claims Against Issuer

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  
	
   

  	
   

  	
   

  
	
  NOTEHOLDERS’
  LISTS AND REPORTS

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Note Registrar To Furnish to the Indenture
  Trustee the Names and Addresses of Noteholders

  	
   

  
	
  Section 7.02.

  	
  Preservation of Information: Communications
  to Noteholders

  	
   

  
	
  Section 7.03.

  	
  Reports by Issuer

  	
   

  
	
  Section 7.04.

  	
  Reports by Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  
	
   

  	
   

  	
   

  
	
  ACCOUNTS,
  DISBURSEMENTS AND RELEASES

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Collection of Money

  	
   

  
	
  Section 8.02.

  	
  Collection Account

  	
   

  
	
  Section 8.03.

  	
  Release of Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  
	
   

  	
   

  	
   

  
	
  SUPPLEMENTAL INDENTURES

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Supplemental Indentures Without Consent of
  Noteholders

  	
   

  
	
  Section 9.02.

  	
  Supplemental Indentures with Consent of
  Noteholders

  	
   

  
	
  Section 9.03.

  	
  Execution of Supplemental Indentures

  	
   

  
	
  Section 9.04.

  	
  Effect of Supplemental Indenture

  	
   

  
	
  Section 9.05.

  	
  Conformity with Trust Indenture Act

  	
   

  
	
  Section 9.06.

  	
  Reference in Notes to Supplemental
  Indentures

  	
   

  
	
  Section 9.07.

  	
  Opinion of Counsel

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  
	
   

  	
   

  	
   

  
	
  REDEMPTION OF NOTES

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Redemption

  	
   

  
	
  Section 10.02.

  	
  Form of Redemption Notice

  	
   

  
	
  Section 10.03.

  	
  Notes Payable on Redemption Date

  	
   

  



 


(iii





















 


	
  ARTICLE ELEVEN

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Compliance Certificates and Opinions, etc.

  	
   

  
	
  Section 11.02.

  	
  Form of Documents Delivered to
  Indenture Trustee

  	
   

  
	
  Section 11.03.

  	
  Acts of Noteholders

  	
   

  
	
  Section 11.04.

  	
  Notices, etc., to Indenture Trustee, Trust
  Administrator, Issuer and Rating Agencies

  	
   

  
	
  Section 11.05.

  	
  Notices to Noteholders; Waiver

  	
   

  
	
  Section 11.06.

  	
  Conflict with Trust Indenture Act

  	
   

  
	
  Section 11.07.

  	
  Effect of Headings and Table of Contents

  	
   

  
	
  Section 11.08.

  	
  Successors and Assigns

  	
   

  
	
  Section 11.09.

  	
  Severability

  	
   

  
	
  Section 11.10.

  	
  Benefits of Indenture and Consents of
  Noteholders

  	
   

  
	
  Section 11.11.

  	
  Legal Holidays

  	
   

  
	
  Section 11.12.

  	
  Governing Law

  	
   

  
	
  Section 11.13.

  	
  Counterparts

  	
   

  
	
  Section 11.14.

  	
  Recording of Indenture

  	
   

  
	
  Section 11.15.

  	
  Trust Obligations

  	
   

  
	
  Section 11.16.

  	
  No Petition

  	
   

  
	
  Section 11.17.

  	
  Inspection

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Forms of Notes

  	
   

  
	
  EXHIBIT B

  	
  [Reserved]

  	
   

  
	
  EXHIBIT C

  	
  Form of ERISA Transfer Affidavit

  	
   

  
				



 


(iv





















 


This
INDENTURE, dated as of July 1, 2005 (this “Indenture”), is among
FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2005-2, a Delaware statutory
trust (the “Issuer”), WELLS FARGO BANK, N.A., a national banking association,
as Trust Administrator (the “Trust Administrator”) and HSBC BANK USA, NATIONAL
ASSOCIATION, a national banking association, as indenture trustee and not in
its individual capacity (the “Indenture Trustee”).


 


Each party agrees
as follows for the benefit of the other party, for the equal and ratable
benefit of the Holders of the Issuer’s variable rate Notes in the Classes
specified herein (the “Notes”) and the Swap Counterparty:


 


GRANTING CLAUSE


 


The Issuer
hereby Grants to the Indenture Trustee at the Closing Date, as Indenture
Trustee for the benefit of the Holders of the Notes and the Swap Counterparty,
all of the Issuer’s right, title and interest, whether now owned or hereafter
acquired, in and to:  (i) the Trust
Estate (as defined in the Transfer and Servicing Agreement); (ii) the
Issuer’s rights and benefits but none of its obligations under the Transfer and
Servicing Agreement (including the Issuer’s right to cause the Seller to
repurchase Mortgage Loans from the Issuer under the circumstances described
therein); (iii) the Issuer’s rights and benefits but none of its
obligations under the Custodial Agreement; (iv) the Issuer’s rights and
benefits but none of its obligations under the Mortgage Loan Purchase
Agreement; (v) the Trust Account, the Pre-Funding Account and all amounts
and property in the Trust Account and the Pre-Funding Account, and the Security
Entitlements to all Financial Assets credited to such accounts from time to
time; (vi) the Swap Agreement, the Corridor Contract and all rights of the
Trust and payments thereunder; (vii) all other property of the Trust from
time to time; and (viii) all present and future claims, demands, causes of
action and choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the “Collateral”).


 


The foregoing
Grant is made in trust to secure the payment of principal of and interest on,
and any other amounts owing in respect of, the Notes, and to secure (i) the
payment of all amounts due on the Notes and the Swap Agreement in accordance
with their terms, (ii) the payment of all other sums payable under the
Indenture with respect to the Notes, and (iii) compliance with the
provisions of this Indenture, all as provided in this Indenture.


 


The Indenture
Trustee, as Indenture Trustee on behalf of the Holders of the Notes and the
Swap Counterparty, acknowledges such Grant, accepts the trusts under this
Indenture in accordance with the provisions of this Indenture and agrees to
perform its duties required of it in this Indenture in accordance with its
terms.


 





















 


ARTICLE ONE



DEFINITIONS AND
INCORPORATION BY REFERENCE


 


Section 1.01.                             Definitions.


 


(a)                                  Except as otherwise specified
herein or as the context may otherwise require, the following terms have the
respective meanings set forth below for all purposes of this Indenture.


 


Act:                         The
meaning specified in Section 11.03(a).


 


Authorized
Officer:  With
respect to the Issuer, any officer of the Owner Trustee who is authorized to
act for the Owner Trustee in matters relating to the Issuer and who is
identified on the list of Authorized Officers delivered by the Owner Trustee to
the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter) and, so long as the Transfer and
Servicing Agreement is in effect, any Vice President, Assistant Vice President,
Trust Officer or more senior officer of the Trust Administrator who is authorized
to act for the Trust Administrator in matters relating to the Issuer and to be
acted upon by the Trust Administrator pursuant to the Transfer and Servicing
Agreement and who is identified on the list of Authorized Officers delivered by
the Trust Administrator to the Indenture Trustee on the Closing Date (as such
list may be modified or supplemented from time to time thereafter).


 


Book-Entry
Notes: 
Beneficial interests in Notes designated as “Book-Entry Notes” in this
Indenture, ownership and transfers of which shall be evidenced or made through
book entries by a Clearing Agency as described in Section 2.11; provided,
that after the occurrence of a condition whereupon Definitive Notes are to be
issued to Note Owners, such Book-Entry Notes shall no longer be “Book-Entry
Notes.”


 


Certificate of
Trust:  The
certificate of trust of the Issuer substantially in the form of Exhibit C
to the Trust Agreement.


 


Class M
Notes:  Each of
the Class M1, Class M2, Class M3, Class M4, Class M5, Class M6,
Class M7, Class M8, Class M9 and Class M10 Notes.


 


Clearing
Agency:  An
organization registered as a “clearing agency” pursuant to Section 17A of
the Exchange Act, as amended.  As of the
Closing Date, the Clearing Agency shall be The Depository Trust Company.


 


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


 


Clearstream:  Clearstream Banking Luxembourg, and any
successor thereto.


 


Collateral:  The meaning specified in the Granting Clause
of this Indenture.


 


Commission:  The Securities and Exchange Commission.


 


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Current
Interest:  As
defined in the Transfer and Servicing Agreement.


 


Default:  Any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.


 


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


 


Depository
Institution: 
Any depository institution or trust company, including the Indenture
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 in the highest rating category by each Rating
Agency, or is otherwise acceptable to each Rating Agency.


 


Euroclear:
 Euroclear SA/NV, as operator of the
Euroclear System.


 


Event of
Default:  The
meaning specified in Section 5.01.


 


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


 


Executive
Officer:  With
respect to any corporation or limited liability company, the Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, President, Manager,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such entity; and with respect to any partnership, any general partner thereof.


 


Global
Securities:  The
meaning specified in Section 2.01(a).


 


Grant:  Mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and grant a lien
upon and a security interest in and a right of set-off against, deposit, set
over and confirm pursuant to this Indenture. 
A Grant of the Collateral or of any other agreement or instrument shall
include all rights, powers and options (but none of the obligations) of the granting
party thereunder, including the immediate and continuing right to claim for,
collect, receive and give receipt for principal and interest payments in
respect of the Collateral and all other moneys payable thereunder, to give and
receive notices and other communications, to make waivers or other agreements,
to exercise all rights and options, to bring Proceedings in the name of the
granting party or otherwise, and generally to do and receive anything that the
granting party is or may be entitled to do or receive thereunder or with respect
thereto.


 


Holder
or Noteholder:  A Person in whose
name a Note is registered on the Note Register.


 


Independent:  When used with respect to any specified
Person, that such Person (a) is in fact independent of the Issuer, any
other obligor on the Notes, the Seller and any Affiliate of any of the
foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Seller or


 


3





















 


any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Seller or any Affiliate
of any of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.


 


Independent
Certificate:  A
certificate or opinion to be delivered to the Indenture Trustee under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.01, made by an Independent appraiser or other
expert appointed by an Issuer Order and approved by the Indenture Trustee in
the exercise of reasonable care, and such opinion or certificate shall state
that the signer has read the definition of “Independent” in this Indenture and
that the signer is Independent within the meaning thereof.


 


Issuer:  Fieldstone Mortgage Investment Trust, Series 2005-2,
a Delaware statutory trust, or any successor and, for purposes of any provision
contained herein and required by the TIA, each other obligor on the Notes.


 


Issuer Order
or Issuer Request:  A written
order or request signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Indenture Trustee.


 


Non-Priority Class Note:  As of any date of determination, any
Outstanding Note other than the related Notes that comprise the Priority Class Notes.


 


Note:  Any of the Class 1-Al, Class 1-A2,
Class 2-Al, Class 2-A2, Class 2-A3, Class A-IO,
Class Ml, Class M2, Class M3, Class M4, Class M5, Class M6,
Class M7, Class M8, Class M9 and Class M10 Notes issued
pursuant to this Indenture, substantially in the forms attached hereto as Exhibit A.


 


Note Owner or
Owner:  With
respect to a Book-Entry Note, the Person that is the beneficial owner of such
Book-Entry Note, as reflected on the books of the Clearing Agency or on the
books of a Person maintaining an account with such Clearing Agency (directly as
a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency), and with respect to a
Definitive Note, the Person that is the registered owner of such Note as
reflected in the Note Register.


 


Note Register:  The meaning specified in Section 2.04.


 


Note Registrar:  The meaning specified in Section 2.04.  The initial Note Registrar shall be the Trust
Administrator.


 


Officer’s
Certificate:  A
certificate signed by any Authorized Officer of the Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.01, and delivered to the Indenture
Trustee.  Unless otherwise specified, any
reference in this Indenture to an Officer’s Certificate shall be to an Officer’s
Certificate of any Authorized Officer of the Issuer.


 


Outstanding:  As of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:


 


(i)                                     Notes
theretofore cancelled by the Note Registrar or delivered to the Note Registrar
for cancellation;


 


4





















 


(ii)                                  Notes
the payment for which money in the necessary amount has been theretofore
deposited with the Trust Administrator or any Paying Agent in trust for the
Holders of such Notes (provided, however,
that if such Notes are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision for such notice has been made,
satisfactory to the Trust Administrator); and


 


(iii)                               Notes
in exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture unless proof satisfactory to the Indenture
Trustee is presented that any such Notes are held by a protected purchaser;


 


provided, that
in determining whether the Holders of the requisite Outstanding Balance of the
Notes have given any request, demand, authorization, direction, notice, consent
or waiver hereunder or under any Operative Agreement, Notes owned by the
Issuer, any other obligor upon the Notes, the Depositor, the Owner Trustee, the
Indenture Trustee, the Master Servicer, any Servicer, the Trust Administrator
or any Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that the
Indenture Trustee knows to be so owned shall be so disregarded (unless such
action requires the consent, waiver, request or demand of 100% of the
Outstanding Balance represented by a particular Class and 100% of the
Outstanding Balance represented by such Class is registered in the name of
one or more of the foregoing entities). 
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee’s right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the Depositor, the
Owner Trustee, the Indenture Trustee, the Master Servicer, any Servicer, the
Trust Administrator or any Affiliate of any of the foregoing Persons.


 


Outstanding
Balance:  The
aggregate principal or notional amount of the Notes Outstanding as of the date
of determination.


 


Paying Agent:  Initially, the Trust Administrator or any
other Person that meets the eligibility standards for the Indenture Trustee
specified in Section 6.11 and is authorized by the Issuer, in accordance
with the provisions of Section 3.03, to make payments to and distributions
from the Trust Account, including payments of principal of or interest on the
Notes on behalf of the Issuer.


 


Predecessor
Note:  With
respect to any particular Note, every previous Note evidencing all or a portion
of the same debt as that evidenced by such particular Note; and, for the
purpose of this definition, any Note authenticated and delivered under Section 2.04
in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.


 


Priority Class Notes:  Until the Class Principal Amounts (or Class Notional
Amounts) of the Senior Notes are reduced to zero and all sums payable to the
Holders of the Senior Notes have been paid in full, the Senior Notes; when the Class Principal
Amounts (or Class Notional Amounts) of the Senior Notes have been reduced
to zero and all amounts payable to the Holders of the Senior Notes have been
paid in full, the Class M1 Notes; when the Class Principal


 


5





















 


Amounts (or Class Notional Amounts) of the Senior Notes and the Class M1
Notes have been reduced to zero and all sums payable to the Holders of such
Classes have been paid in full, the Class M2 Notes; when the Class Principal
Amounts (or Class Notional Amounts) of the Senior Notes, the Class M1
Notes and the Class M2 Notes have been reduced to zero and all sums
payable to the Holders of such Classes have been paid in full, the Class M3
Notes; when the Class Principal Amounts (or Class Notional Amounts)
of the Senior Notes, the Class M1 Notes, the Class M2 Notes and the Class M3
Notes have been reduced to zero and all sums payable to the Holders of such
Classes have been paid in full, the Class M4 Notes; when the Class Principal
Amounts (or Class Notional Amounts) of the Senior Notes, the Class M1
Notes, the Class M2 Notes, the Class M3 Notes and the Class M4
Notes have been reduced to zero and all sums payable to the Holders of such
Classes have been paid in full, the Class M5 Notes; when the Class Principal
Amounts (or Class Notional Amounts) of the Senior Notes and the Class M1
Notes, the Class M2 Notes, the Class M3 Notes, the Class M4
Notes and the Class M5 Notes have been reduced to zero and all sums
payable to the Holders of such Classes have been paid in full, the Class M6
Notes; and when the Class Principal Amounts (or Class Notional
Amounts) of the Senior Notes and the Class M1 Notes, the Class M2
Notes, the Class M3 Notes, the Class M4 Notes, the Class M5
Notes and the Class M6 Notes have been reduced to zero and all sums
payable to the Holders of such Classes have been paid in full, the Class M7
Notes; when the Class Principal Amounts (or Class Notional Amounts)
of the Senior Notes and the Class M1 Notes, the Class M2 Notes, the Class M3
Notes, the Class M4 Notes, the Class M5 Notes, the Class M6
Notes and Class M7 Notes have been reduced to zero and all sums payable to
the Holders of such Classes have been paid in full, the Class M8 Notes;
when the Class Principal Amounts (or Class Notional Amounts) of the
Senior Notes and the Class M1 Notes, the Class M2 Notes, the Class M3
Notes, the Class M4 Notes, the Class M5 Notes, the Class M6
Notes, Class M7 and Class M8 Notes have been reduced to zero and all
sums payable to the Holders of such Classes have been paid in full, the Class M9
Notes;  when the Class Principal
Amounts (or Class Notional Amounts) of the Senior Notes and the Class M1
Notes, the Class M2 Notes, the Class M3 Notes, the Class M4
Notes, the Class M5 Notes, the Class M6 Notes, Class M7, Class M8
and Class M9 Notes have been reduced to zero and all sums payable to the
Holders of such Classes have been paid in full, the Class M10 Notes.


 


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


 


Prospective
Owner:  Each
prospective purchaser and any subsequent transferee of a Note.


 


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


 


Redemption Date:  In the case of a redemption of the Notes
pursuant to Section 10.01, the Payment Date specified by the Indenture
Trustee in the notice delivered pursuant to Section 10.02.


 


6





















 


Responsible
Officer:  Any officer
of the Indenture Trustee with direct responsibility for administration of the
Indenture.


 


Retained Notes:  Those certain Classes, or portions of certain
Classes, of Notes which, at the time of their issuance, FIC or one of its
qualified REIT subsidiaries acquires beneficial ownership thereof.


 


Senior
Principal Notes: 
Each of the Class 1-A1, Class 1-A2, Class 2-A1,
Class 2-A2 and Class 2-A3 Notes.


 


State:  Any one of the 50 States of the United States
of America or the District of Columbia.


 


Transfer and
Servicing Agreement: 
The Transfer and Servicing Agreement dated as of July 1, 2005,
among the Issuer, Fieldstone Mortgage Investment Corporation, as depositor,
Wells Fargo Bank, N.A., as master servicer and trust administrator, HSBC Bank
USA, National Association, as indenture trustee, Fieldstone Investment
Corporation, as seller, Fieldstone Servicing Corp., as servicer, and JPMorgan
Chase Bank, National Association, as subservicer, as such may be amended or
supplemented from time to time.


 


Trust Indenture
Act or TIA:  The
Trust Indenture Act of 1939 as in force on the date hereof, unless otherwise
specifically provided.


 


(b)                                 Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
otherwise defined herein shall have the meanings assigned to them in the
Transfer and Servicing Agreement.


 


Section 1.02.                             Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision
of the TIA, the provision is incorporated by reference in and made a part of
this Indenture.  The following TIA terms
used in this Indenture have the following meanings:


 


“Commission”
means the Securities and Exchange Commission.


 


“indenture
securities” means the Notes.


 


“indenture
security holder” means a Noteholder.


 


“indenture to
be qualified” means this Indenture.


 


“indenture
trustee” or “institutional trustee” means the Indenture Trustee.


 


“obligor” on
the indenture securities means the Issuer and any other obligor on the
indenture securities.


 


All other TIA
terms used in this Indenture that are defined in the TIA, defined by TIA
reference to another statute or defined by rule of the Securities and
Exchange Commission have the respective meanings assigned to them by such
definitions.


 


7





















 


Section 1.03.                             Rules of
Construction.  Unless the context otherwise requires:


 


(i)                                     a term has the
meaning assigned to it;


 


(ii)                                  an accounting term
not otherwise defined has the meaning assigned to it in accordance with
generally accepted accounting principles as in effect from time to time;


 


(iii)                               “or” is not exclusive;


 


(iv)                              “including” means
including without limitation;


 


(v)                                 words in the singular
include the plural and words in the plural include the singular;


 


(vi)                              any agreement, instrument
or statute defined or referred to herein or in any instrument or certificate
delivered in connection herewith means such agreement, instrument or statute as
from time to time amended, modified or supplemented and includes (in the case
of agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns;


 


(vii)                           terms defined in the UCC and
not otherwise defined herein shall have the meaning assigned to them in the
UCC; and


 


(viii)                        to “U.S. dollars”, “dollars”,
or the sign “$” shall be construed as references to United States dollars which
are freely transferable by residents and non-residents of the United States of
America and convertible by such persons into any other freely convertible
currency unless such transferability or convertibility is restricted by any law
or regulation of general application in which event references to “U.S. dollars”,
“dollars”, or the sign “$” shall be construed as references to such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts in the United States
of America, and “cents” shall be construed accordingly.


 


8





















 


ARTICLE TWO



THE NOTES


 


Section 2.01.                             Form.  The Notes shall be designated as the “Fieldstone
Mortgage Investment Trust, Series 2005-2 Mortgage-Backed Notes.”  The Notes, together with the Trust
Administrator’s certificate of authentication, shall be in substantially the
forms set forth in Exhibit A with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes.  Any portion of
the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.


 


The Definitive
Notes and the global certificates (“Global Securities”) representing the
Book-Entry Notes shall be typewritten, printed, lithographed or engraved or produced
by any combination of these methods (with or without steel engraved borders),
all as determined by the officers executing such Notes, as evidenced by their
execution of such Notes.


 


Each Note
shall be dated the date of its authentication. 
The terms of the Notes set forth in Exhibit A are part of the terms
of this Indenture.


 


Section 2.02.                             Execution, Authentication and Delivery.  The Notes shall be executed on behalf of the
Issuer by any Authorized Officer of the Owner Trustee.  The signature of any such Authorized Officer
on the Notes may be manual or facsimile.


 


Notes bearing
the manual or facsimile signature of individuals who were at any time
Authorized Officers of the Owner Trustee or the Trust Administrator shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of such Notes.


 


The Trust
Administrator shall, upon Issuer Order, authenticate and deliver the Notes for
original issue in the aggregate principal or notional amounts with respect to
each Class as specified below:


 




	
  Class

  	
   

  	
  Class Principal Amount

  	
   

  
	
  1-Al

  	
   

  	
  $

  	
  267,522,000

  	
   

  
	
  l-A2

  	
   

  	
  $

  	
  66,880,000

  	
   

  
	
  2-Al

  	
   

  	
  $

  	
  196,414,000

  	
   

  
	
  2-A2

  	
   

  	
  $

  	
  189,876,000

  	
   

  
	
  2-A3

  	
   

  	
  $

  	
  24,608,000

  	
   

  
	
  A-IO(1)

  	
   

  	
  $

  	
  435,000,000

  	
   

  
	
  Ml

  	
   

  	
  $

  	
  36,250,000

  	
   

  
	
  M2

  	
   

  	
  $

  	
  33,350,000

  	
   

  
	
  M3

  	
   

  	
  $

  	
  21,750,000

  	
   

  
	
  M4

  	
   

  	
  $

  	
  16,433,000

  	
   

  
	
  M5

  	
   

  	
  $

  	
  16,433,000

  	
   

  
	
  M6

  	
   

  	
  $

  	
  14,983,000

  	
   

  
	
  M7

  	
   

  	
  $

  	
  15,466,000

  	
   

  
	
  M8

  	
   

  	
  $

  	
  11,116,000

  	
   

  
	
  M9

  	
   

  	
  $

  	
  11,116,000

  	
   

  
	
  M10

  	
   

  	
  $

  	
  36,250,000

  	
   

  






 


9





















 










(1)  The Class A-IO Notes have no Class Principal
Amount.  The Class A-IO Notes will
accrue interest on its Class Notional Amount, which as of the Closing Date
will equal $435,000,000.


 


The aggregate
principal amounts of such Classes of Notes outstanding at any time may not
exceed such respective amounts.


 


The Senior
Principal Notes will be issued in minimum principal amount denominations of
$25,000 and integral multiples of $1 in excess thereof.  The Class M Notes will be issued in
minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof.  The Class A-IO Notes will
be issued in minimum denominations of $1,000,000 in original notional amount
and integral multiples of $1,000 in excess thereof.


 


Any Retained
Notes will be subject to the same restrictions and consequences discussed in Section 3.03
(with respect to transfers to (i) ERISA Plans and (ii) a REIT, a
Qualified REIT Subsidiary or an entity that is disregarded for federal income
tax purposes that is wholly owned by a REIT or a Qualified REIT Subsidiary) of
the Trust Agreement that are applicable to an Ownership Certificate unless
either (a) as of the date such Retained Notes are sold for cash to a third
party or taxable REIT subsidiary (within the meaning of the Code): (i) the
owner of the Certificate is (x) a REIT, (y) a Qualified REIT Subsidiary or (z)
an entity that is disregarded for United States federal income tax purposes
that is wholly owned by a REIT or a Qualified REIT Subsidiary; (ii) no
modifications have been made to the transaction documents as of the date of
such sale; (iii) the respective ratings of the Retained Notes as of the
date of such sale is not lower than the ratings for such Retained Note as of
the Closing Date; and (iv) no adverse changes have been made to (or that
would adversely affect the application of) the legal authorities applicable to
the Closing Date tax opinions or (b) a tax opinion is delivered from a
nationally recognized law firm generally recognized to be qualified to opine
concerning the tax aspects of asset securitization that (i) the
Retained  Notes “will be debt” and (ii) 
after the sale, the Trust will continue to qualify as a Qualified REIT
Subsidiary for federal income tax purposes. 
Notwithstanding the foregoing, any Retained Notes may be pledged to
secure indebtedness and may be the subject of repurchase agreements treated as
secured indebtedness for federal income tax purposes.


 


No Note shall
be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose, unless there appears on such Note a certificate of authentication
substantially in the form provided for herein executed by the Trust
Administrator by the manual signature of one of its authorized signatories, and
such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.


 


10





















 


Section 2.03.                             Limitation
on Transfer of Notes.


 


(a)                                  No transfer of a Note in the
form of a Definitive Note shall be made unless the Note Registrar shall have
received a representation from the transferee of such Note, acceptable to and
in form and substance satisfactory to the Note Registrar and the Depositor
(such requirement is satisfied only by the Note Registrar’s receipt of a
transfer affidavit from the transferee substantially in the form of Exhibit C
hereto), to the effect that such transferee (i) is not acquiring such note
for, or with the assets of, an employee benefit plan or other retirement
arrangement that is subject to Section 406 of ERISA or to Section 4975
of the Code or to any substantially similar law (“Similar Law”), or any entity
deemed to hold the plan assets of the foregoing (collectively, “Benefit Plans”),
or (ii) its acquisition and holding of such Notes for, or with the assets
of, a Benefit Plan will not result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code which is not covered
under Prohibited Transaction Class Exemption (“PTCE”) 84-14, PTCE 90-1,
PTCE 91-38, PTCE 95-60, PTCE 96-23 or some other applicable
exemption, and will not result in a non-exempt violation of any Similar Law.


 


In the case of
a Note that is a Book-Entry Note, for purposes of clauses (i) or (ii) of
the preceding paragraph, such representations shall be deemed to have been made
to the Note Registrar by the transferee’s acceptance of such Note that is a
Book-Entry Note (or the acceptance by a Note Holder of the beneficial interest
in such Note).


 


None of the
Indenture Trustee, the Note Registrar or the Depositor shall have any liability
to any Person for any registration of transfer of any Note that is in fact not
permitted by this Section 2.03(a) or for the Indenture Trustee or the
Paying Agent making any payments due on such Note to the Holder thereof or
taking any other action with respect to such Holder under the provisions of
this Indenture so long as the transfer was registered by the Note Registrar in
accordance with the foregoing requirements. 
In addition, none of the Indenture Trustee, the Note Registrar or the
Depositor shall be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to any Note in the form of a
Book-Entry Note, and none of the Indenture Trustee, the Note Registrar or the
Depositor shall have any liability for transfers of Book-Entry Notes or any
interests therein made in violation of the restrictions on transfer described
in the Prospectus and this Indenture.


 


In the event
that a Note is transferred to a Person that does not meet the requirements of
this Section 2.03, such transfer shall be of no force and effect, shall be
void ab initio, and shall not
operate to transfer any rights to such Person, notwithstanding any instructions
to the contrary to the Issuer, the Indenture Trustee or any intermediary; and
the Trust Administrator shall not make any payments on such Note for as long as
such Person is the Holder of such Note.


 


Each Note
shall contain a legend substantially similar to the applicable legend provided
in Exhibit A hereto stating that transfer of such Notes is subject to
certain restrictions as set forth herein.


 


(b)                                 Any purported transfer of a Note
(or any interest therein) not in accordance with this Section 2.03 shall
be null and void and shall not be given effect for any purpose hereunder.


 


11





















 


(c)                                  The Trust Administrator will not
have the ability to monitor transfers of the Notes while they are in book-entry
form and will have no liability for transfers of Book-Entry Notes in violation
of any of the transfer restrictions described in this Section 2.03.


 


Section 2.04.                             Registration; Registration of Transfer and Exchange.  The Issuer shall cause the Note Registrar to
keep a register (the “Note Register”) in which, subject to such reasonable
regulations as it may prescribe and the restrictions on transfers of the Notes
set forth herein, the Issuer shall provide for the registration of Notes and
the registration of transfers of Notes. 
The Trust Administrator initially shall be the “Note Registrar” for the
purpose of registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar,
the Issuer shall promptly appoint a successor or, if it elects not to make such
an appointment, assume the duties of Note Registrar.


 


If a Person
other than the Indenture Trustee is appointed by the Issuer as Note Registrar,
the Issuer will give the Indenture Trustee prompt written notice of the
appointment of such Note Registrar and of the location, and any change in the
location, of the Note Register, and the Indenture Trustee shall have the right
to inspect the Note Register at all reasonable times and to obtain copies
thereof, and the Indenture Trustee shall have the right to rely upon a
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.


 


Subject to Section 2.03
upon surrender for registration of transfer of any Note at the office or agency
of the Issuer to be maintained as provided in Section 3.02, the Issuer
shall execute, and the Note Registrar shall authenticate and the Noteholder
shall be entitled to obtain from the Note Registrar, in the name of the
designated transferee or transferees, one or more new Notes of the same Class in
any authorized denominations, of a like aggregate principal amount.


 


At the option
of the Holder, Notes may be exchanged for other Notes of the same Class in
any authorized denominations, of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency.  Whenever any Notes are so surrendered for
exchange, the Issuer shall execute, and the Note Registrar shall authenticate
and the Noteholder shall be entitled to obtain from the Indenture Trustee, the
Notes which the Noteholder making the exchange is entitled to receive.


 


All Notes
issued upon any registration of transfer or exchange of Notes shall be the
valid obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.


 


Every Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed by, or be accompanied by a written instrument of transfer in form
satisfactory to the Note Registrar duly executed by, the Holder thereof or such
Holder’s attorney duly authorized in writing, with such signature guaranteed by
an “eligible guarantor institution” meeting the requirements of the Note
Registrar, which requirements include membership or participation in the
Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Note Registrar in addition to,
or in substitution for, STAMP.


 


12





















 


No service
charge shall be made to a Holder for any registration of transfer or exchange
of Notes, but the Issuer or the Note Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.


 


The preceding
provisions of this Section notwithstanding, the Issuer shall not be
required to make and the Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to such Note.


 


Section 2.05.                             Mutilated, Destroyed, Lost or Stolen Notes.  If (i) any mutilated Note is surrendered
to the Indenture Trustee, or the Indenture Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Note, and (ii) there
is delivered to the Indenture Trustee such security or indemnity as may be
required by it to hold the Issuer and the Indenture Trustee harmless, then, in
the absence of actual notice to the Issuer, the Note Registrar or the Indenture
Trustee that such Note has been acquired by a protected purchaser, and upon
certification provided by the Holder of such Note that the requirements of Section 8-405
of the Relevant UCC are met, the Issuer shall execute, and upon its request the
Note Registrar shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a replacement Note; provided, however, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall have become or within seven days shall be due and
payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when
so due or payable or upon the Redemption Date without surrender thereof.  If, after the delivery of such replacement
Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to
the preceding sentence, a bona fide purchaser of the original Note in lieu of
which such replacement Note was issued presents for payment such original Note,
the Issuer and the Note Registrar shall be entitled to recover such replacement
Note (or such payment) from the Person to whom it was delivered or any Person
taking such replacement Note from such Person to whom such replacement Note was
delivered or any assignee of such Person, except a protected purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expense incurred by the Issuer or
the Indenture Trustee in connection therewith.


 


Upon the
issuance of any replacement Note under this Section, the Issuer, the Indenture
Trustee or the Note Registrar may require the payment by the Holder of such
Note of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other reasonable expenses (including the
fees and expenses of the Indenture Trustee) connected therewith.


 


Every
replacement Note issued pursuant to this Section in replacement of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.


 


13





















 


The provisions
of this Section are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.


 


Section 2.06.                             Persons
Deemed Owners.  Prior to due presentment for registration of
transfer of any Note, the Issuer, the Trust Administrator, the Indenture
Trustee and any agent of the Issuer or the Indenture Trustee may treat the
Person in whose name any Note is registered (as of the day of determination) as
the owner of such Note for the purpose of receiving payments of principal of
and interest, if any, on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and none of the Issuer, the Trust
Administrator, the Indenture Trustee or any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the contrary.


 


Section 2.07.                             Payment of Principal and Interest.


 


(a)                                  Each Class of Notes shall
accrue interest at the Interest Rate as set forth in the Transfer and Servicing
Agreement, and such interest shall be payable on each Payment Date, subject to Section 3.01.  Interest shall be computed on each Class of
LIBOR Notes on the basis of a 360-day year and the actual number of days
elapsed in each Accrual Period.  Interest
shall be computed on each Class of Notes (other than any Class of
LIBOR Notes) on the basis of a 360-day year consisting of twelve 30-day
months.  With respect to each outstanding
Class of LIBOR Notes, the Trust Administrator shall determine LIBOR for
each applicable Accrual Period on the second London Business Day prior thereto,
in accordance with the provisions of the Transfer and Servicing Agreement.  All interest payments on each Class of
Notes shall be made in the order provided for in Section 6.02 of the
Transfer and Servicing Agreement.  Any
installment of interest or principal payable on any Note shall be paid on the
applicable Payment Date to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date by check mailed first-class
postage prepaid to such Person’s address as it appears on the Note Register on
such Record Date or, upon written request made to the Note Registrar and the
Paying Agent at least five Business Days prior to the related Record Date, by
the Holder of a Note having an initial Note Principal Amount of not less than
$2,500,000 by wire transfer in immediately available funds to an account
specified in the request and at the expense of such Noteholder, except that,
unless Definitive Notes have been issued pursuant to Section 2.12, with
respect to Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.),
payment will be made by wire transfer in immediately available funds to the
account designated by such nominee, except for the final installment of
principal payable with respect to such Note on a Payment Date or on the
applicable Maturity Date for such Class of Notes (and except for the
Redemption Price for any Note called for redemption pursuant to Section 10.01),
which shall be payable as provided below. 
The funds represented by any such checks returned undelivered shall be
held in accordance with Section 3.03.


 


(b)                                 The principal of the Notes shall
be payable in installments on each Payment Date as provided herein and in the
Notes, subject to Section 3.01. 
Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable, if not previously paid, on the date on which an
Event of Default shall have occurred and be continuing, if the Indenture
Trustee or Holders of the Notes representing not less than a majority of the
Outstanding Balance of the Priority Class Notes, have declared the Notes
to be immediately due and payable in the


 


14





















 


manner provided in Section 5.02. 
All principal payments on a Class of Notes shall be made in
accordance with Section 6.02 of the Transfer and Servicing Agreement.  The Trust Administrator shall notify the
Person in whose name a Note is registered at the close of business on the
Record Date preceding the Payment Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile no later than five Business
Days prior to such final Payment Date and shall specify that such final
installment will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered
for payment of such installment.  Notices
in connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.02.


 


Section 2.08.                             Cancellation.  All Notes
surrendered for payment, registration of transfer, exchange or redemption
shall, if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly cancelled by the
Indenture Trustee.  The Issuer may at any
time deliver to the Note Registrar for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by
the Indenture Trustee.  No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section, except as expressly permitted by this Indenture.  All cancelled Notes may be held or disposed
of by the Note Registrar in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Order that they be destroyed or returned to it; provided, that such Issuer
Order is timely and the Notes have not been previously disposed of by the
Indenture Trustee.


 


Section 2.09.                             Release
of Collateral.


 


(a)                                  Except as otherwise provided in
subsections (b) and (c) of this Section and the terms of the
Operative Agreements, the Indenture Trustee shall release property from the
lien of this Indenture only upon receipt by it of an Issuer Request accompanied
by (i) an Officer’s Certificate, (ii) an Opinion of Counsel, (iii) certificates
in accordance with TIA Sections 314(c) and (d)(1), and (iv)(A) Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or (B) an
Opinion of Counsel in lieu of such Independent Certificates to the effect that
the TIA does not require any such Independent Certificates; provided that no
such Independent Certificates or Opinion of Counsel in lieu of such Independent
Certificates shall be necessary in respect of property released from the lien
of the Indenture in accordance with the provisions hereof if such property consists
solely of cash.


 


(b)                                 The Servicer or any Subservicer
(or if neither does so, the Master Servicer), on behalf of the Issuer, shall be
entitled to obtain a release from the lien of this Indenture for any Mortgage
Loan and the Mortgaged Property at any time (i) after a payment by the
Seller or the Issuer of the Purchase Price of the Mortgage Loan, (ii) after
a Qualifying Substitute Mortgage Loan is substituted for such Mortgage Loan and
payment of the Substitution Amount, if any, (iii) after liquidation of the
Mortgage Loan in accordance with the Transfer and Servicing Agreement and the
deposit of all Liquidation Proceeds and Insurance Proceeds in the Collection
Account, (iv) upon the termination of a Mortgage Loan (due to, among other
causes, a prepayment in full of the Mortgage Loan and sale or other disposition
of the related Mortgaged Property), or (v) as contemplated by Section 9.02
of the Transfer and Servicing Agreement.


 


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(c)                                  The Indenture Trustee shall, if
requested by the Servicer or the Subservicer, temporarily release or cause the
applicable Custodian temporarily to release to such party the Mortgage File
pursuant to the provisions of Section 5.15 of the Transfer and Servicing
Agreement and Section 5 of the Custodial Agreement; provided, however, that the Mortgage File
shall have been stamped to signify the Issuer’s pledge to the Indenture Trustee
under the Indenture.


 


(d)                                 The Indenture Trustee shall
provide the Swap Counterparty with notice of any release of property pursuant
to clause (a), (b) or (c) above.


 


Section 2.10.                             Book-Entry
Notes.  Each Class of Notes will be issued in
the form of typewritten Notes or Global Securities representing the Book-Entry
Notes, to be delivered to, or to the Indenture Trustee as custodian for, the
initial Clearing Agency, by, or on behalf of, the Issuer.  The Book-Entry Notes shall be registered
initially on the Note Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Owner thereof will receive a Definitive
Note representing such Note Owner’s interest in such Note, except as provided
in Section 2.11.  Unless and until
definitive, fully registered Notes (the “Definitive Notes”) have been issued to
such Note Owners pursuant to Section 2.12:


 


(i)                                     the provisions of
this Section shall be in full force and effect;


 


(ii)                                  the Note Registrar
and the Indenture Trustee shall be entitled to deal with the Clearing Agency
for all purposes of this Indenture (including the payment of principal of and
interest on the Notes and the giving of instructions or directions hereunder)
as the sole holder of the Notes, and shall have no obligation to the Note
Owners;


 


(iii)                               to the extent that the
provisions of this Section conflict with any other provisions of this
Indenture, the provisions of this Section shall control;


 


(iv)                              the rights of Note Owners
shall be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Note Owners and the
Clearing Agency and/or the Clearing Agency Participants pursuant to the Note
Depository Agreement.  Unless and until
Definitive Notes are issued pursuant to Section 2.12, the Note Registrar
shall not register any transfer of a beneficial interest in a Book-Entry Note;
and the initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments of principal of
and interest on the Notes to such Clearing Agency Participants; and


 


(v)                                 whenever this
Indenture requires or permits actions to be taken based upon instructions or
directions of Holders of Notes evidencing a specified percentage of the
Outstanding Balance of the Notes (or the Priority Class Notes), the
Clearing Agency shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Note Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has delivered
such instructions to the Indenture Trustee.


 


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Section 2.11.                             Notices
to Clearing Agency.  Whenever a notice or other communication to
the Noteholders is required under this Indenture, unless and until Definitive Notes
shall have been issued to such Note Owners pursuant to Section 2.12, the
Trust Administrator shall give all such notices and communications specified
herein to be given to Holders of the Notes to the Clearing Agency, and shall
have no obligation to such Note Owners.


 


Section 2.12.                             Definitive
Notes.  If (i) the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Book-Entry Notes and the Issuer is unable to locate a qualified successor or (ii) after
the occurrence of an Event of Default hereunder, Note Owners of the Book-Entry
Notes representing beneficial interests aggregating at least a majority of the
Outstanding Balance of the Book-Entry Notes advise the Clearing Agency in
writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of such Note Owners and the Clearing
Agency consents, then the Clearing Agency shall notify all Note Owners and the
Note Registrar of the occurrence of any such event and of the availability of
Definitive Notes to Note Owners requesting the same.  Upon surrender to the Note Registrar of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the Note
Registrar shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. 
None of the Issuer, the Note Registrar, Trust Administrator or the
Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions.  Upon the issuance
of Definitive Notes, the Indenture Trustee and the Trust Administrator shall recognize
the Holders of the Definitive Notes as Noteholders.


 


Section 2.13.                             Tax
Treatment.  The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes (other than
the Retained Notes) will qualify as indebtedness of the Issuer secured by the
Collateral.  The Issuer, by entering into
this Indenture, and each Noteholder, by its acceptance of a Note (and each Note
Owner by its acceptance of an interest in the applicable Book-Entry Note),
agree to treat the Notes for federal, state and local income, single business
and franchise tax purposes as indebtedness of the Issuer.


 


ARTICLE THREE


 


COVENANTS


 


Section 3.01.                             Payment of Principal and Interest.  The Issuer will duly and punctually pay (or
will cause to be duly and punctually paid) the principal of and interest on the
Notes in accordance with the terms of the Notes and this Indenture, and will
duly and punctually pay all amounts owed to the Swap Counterparty under the Swap
Agreement.  Amounts properly withheld
under the Code by any Person from a payment to any Noteholder of interest
and/or principal shall be considered as having been paid by the Issuer to such
Noteholder for all purposes of this Indenture.


 


The Notes
shall be non-recourse obligations of the Issuer and shall be limited in right
of payment to amounts available from the Collateral as provided in this
Indenture.  The Issuer shall not
otherwise be liable for payments of the Notes, and none of the owners, agents,
officers,


 


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directors, employees, or successors or assigns of the Issuer shall be
personally liable for any amounts payable, or performance due, under the Notes
or this Indenture.  If any other
provision of this Indenture shall be deemed to conflict with the provisions of
this Section 3.01, the provisions of this Section 3.01 shall control.


 


Section 3.02.                             Maintenance
of Office or Agency.  The Note Registrar on behalf of the Issuer
will maintain an office or agency where Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served.


 


Section 3.03.                             Money for Payments to be Held in
Trust.  As provided in Section 8.02, all
payments of amounts due and payable with respect to any Notes that are to be
made from amounts withdrawn from the Collection Account pursuant to Article VI
of the Transfer and Servicing Agreement shall be made on behalf of the Issuer
by the Indenture Trustee, the Trust Administrator or by another Paying Agent,
and no amounts so withdrawn from the such account for payments of Notes shall
be paid over to the Issuer except as provided in this Section.


 


On or before
the Business Day preceding each Payment Date, the Issuer shall deposit or cause
to be deposited in the Collection Account an aggregate sum sufficient to pay
the amounts then becoming due under the Notes, such sum to be held in trust for
the benefit of the Persons entitled thereto, and (unless the Paying Agent is
the Indenture Trustee) shall promptly notify the Indenture Trustee of its
action or failure so to act.


 


The Trust
Administrator is hereby appointed the initial Paying Agent.  Any successor Paying Agent shall be appointed
by Issuer Order with written notice thereof to the Indenture Trustee.  Any Paying Agent appointed by the Issuer
shall be a Person that would be eligible to be Indenture Trustee hereunder as
provided in Section 6.11.  The
Issuer shall not appoint any Paying Agent (other than the Indenture Trustee)
which is not, at the time of such appointment, a Depository Institution.


 


The Issuer
shall cause each Paying Agent other than the Indenture Trustee or the Trust
Administrator, as initial Paying Agent, to execute and deliver to the Indenture
Trustee an instrument in which such Paying Agent shall agree with the Indenture
Trustee (and if the Indenture Trustee or the Trust Administrator acts as Paying
Agent, it hereby so agrees), subject to the provisions of this Section, that
such Paying Agent will:


 


(i)                                     hold all sums held
by it for the payment of amounts due with respect to the Notes in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and in the Transfer and
Servicing Agreement and pay such sums to such Persons as herein provided;


 


(ii)                                  give the Indenture
Trustee and the Swap Counterparty notice of any default by the Issuer of which
the Paying Agent has actual knowledge in the making of any payment required to
be made with respect to the Notes;


 


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(iii)                               at any time during the
continuance of any such default, upon the written request of the Indenture
Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by
such Paying Agent;


 


(iv)                              immediately resign as a
Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in
trust for the payment of Notes if at any time it ceases to meet the standards required
to be met by a Paying Agent at the time of its appointment; and


 


(v)                                 comply with all
requirements of the Code with respect to the withholding from any payments made
by it on any Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith; provided, however,
that with respect to reporting requirements applicable to original issue
discount, the accrual of market discount or the amortization of premium on the
Notes, the Depositor shall have first provided the calculations pertaining
thereto and the amount of any resulting withholding taxes to the Indenture
Trustee and the Paying Agent.


 


The Issuer may
at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, by Issuer Order direct any Paying
Agent to pay to the Indenture Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Indenture Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such payment
by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.


 


Subject to
applicable laws with respect to escheat of funds, any money held by the
Indenture Trustee or any Paying Agent in trust for the payment of any amount
due with respect to any Note and remaining unclaimed for two years after such
amount has become due and payable shall be discharged from such trust and be
paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided,
however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York (including, but
not limited to, The Bond Buyer),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Issuer.  The Indenture Trustee or
Paying Agent shall also adopt and employ, at the expense and direction of the
Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption or
whose right to or interest in moneys due and payable but not claimed is
determinable from the records of the Indenture Trustee or of any Paying Agent,
at the last address of record for each such Holder).


 


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Section 3.04.          Existence.


 


(a)           The
Issuer will keep in full effect its existence, rights and franchises as a
statutory trust under the laws of the State of Delaware (unless it becomes, or
any successor Issuer hereunder is or becomes, organized under the laws of any
other State or of the United States of America, in which case the Issuer will
keep in full effect its existence, rights and franchises under the laws of such
other jurisdiction) and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other instrument or agreement included in the
Collateral.


 


(b)           Any
successor to the Owner Trustee appointed pursuant to Section 9.03 of the
Trust Agreement shall be the successor Owner Trustee under this Indenture
without the execution or filing of any paper, instrument or further act to be
done on the part of the parties hereto.


 


(c)           Upon
any consolidation or merger of or other succession to the Owner Trustee, the
Person succeeding to the Owner Trustee under the Trust Agreement may exercise
every right and power of the Owner Trustee under this Indenture with the same
effect as if such Person had been named as the Owner Trustee herein.


 


Section 3.05.          Protection
of Collateral.  The Issuer will
from time to time execute, deliver and file all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, and will take such other action
necessary or advisable to:


 


(i)            maintain
or preserve the lien and security interest (and the priority thereof) of this
Indenture or carry out more effectively the purposes hereof,


 


(ii)           perfect,
publish notice of or protect the validity of any Grant made or to be made by
this Indenture;


 


(iii)          enforce
any rights with respect to the Collateral; or


 


(iv)          preserve
and defend title to the Collateral and the rights of the Indenture Trustee and
the Noteholders in such Collateral against the claims of all persons and
parties.


 


The Issuer hereby designates each of the
Indenture Trustee and the Trust Administrator as its agent and
attorneys-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.05 and
hereby authorizes either of them to file in any filing office any financing
statement, amendment to financing statement, or continuation statement required
to be executed pursuant to this Section 3.05.


 


Section 3.06.          Opinions
as to Collateral.  On the Closing
Date, the Issuer shall furnish to the Trust Administrator and the Indenture
Trustee an Opinion of Counsel to the effect that either, in the opinion of such
counsel, such action has been taken with respect to the recording and filing of
this Indenture, any indentures supplemental hereto, and any other requisite
documents, and


 


20





















 


with respect
to the execution and filing of any financing statements and continuation
statements, as are necessary to make effective the lien and security interest
of this Indenture, or stating that, in the opinion of such counsel, no such
action is necessary to make such lien and security interest effective.


 


Section 3.07.          Performance
of Obligations.


 


(a)           The
Issuer will not take any action and will use its best efforts not to permit any
action to be taken by others that would release any Person from any of such
Person’s material covenants or obligations under any instrument or agreement
included in the Collateral or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Transfer and Servicing Agreement or
such other instrument or agreement.


 


(b)           The
Issuer may contract with other Persons to assist it in performing its duties
under this Indenture, and any performance of such duties by a Person identified
to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be
deemed to be action taken by the Issuer. 
Initially, the Issuer has contracted with the Trust Administrator
pursuant to the Transfer and Servicing Agreement to assist the Issuer in
performing certain of its duties under this Indenture.


 


(c)           The
Issuer will punctually perform and observe all of its obligations and
agreements contained in this Indenture, the Operative Agreements and in the
instruments and agreements included in the Collateral, including but not
limited to filing or causing to be filed all financing statements and
continuation statements required to be filed by the terms of this Indenture and
the Transfer and Servicing Agreement in accordance with and within the time
periods provided for herein and therein.


 


(d)           If
a responsible officer of the Owner Trustee shall have written notice or actual
knowledge of the occurrence of an Event of Default under the Transfer and
Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee,
the Swap Counterparty and each Rating Agency thereof.


 


(e)           As
promptly as possible after the giving of notice of termination to the Master
Servicer of the Master Servicer’s rights and powers pursuant to Section 8.01(a) of
the Transfer and Servicing Agreement, the Indenture Trustee shall proceed in
accordance with Section 8.01 and 8.02 of the Transfer and Servicing
Agreement.


 


(f)            Without
derogating from the absolute nature of the assignment granted to the Indenture
Trustee under this Indenture or the rights of the Indenture Trustee hereunder,
the Issuer agrees (i) that it will not, without the prior written consent
of the Indenture Trustee or the Holders of at least a majority in Outstanding
Balance of the Notes affected thereby, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral or the
Operative Agreements (except to the extent otherwise provided in any such
Operative Agreement), or waive timely performance or observance by the Trust
Administrator, Master Servicer or the Depositor of its respective duties under
the Transfer and Servicing Agreement; and (ii) that any


 


21





















 


such amendment
shall not (A) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, payments that are required to be made for
the benefit of the Noteholders or (B) reduce the aforesaid percentage of
the Notes that is required to consent to any such amendment, without the
consent of the Holders of all the Outstanding Notes affected thereby.  If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee or such
Holders, the Issuer agrees, promptly following a request by the Indenture
Trustee to do so, to execute and deliver, in its own name and at its own
expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.


 


Section 3.08.          Negative
Covenants.  So long as any Notes
or the Swap Agreement are Outstanding, the Issuer shall not:


 


(i)            except
as expressly permitted by this Indenture, the Mortgage Loan Purchase Agreement
or the Transfer and Servicing Agreement, sell, transfer, exchange or otherwise
dispose of any of the properties or assets of the Issuer, including those
included in the Collateral, unless directed to do so by the Indenture Trustee;


 


(ii)           claim
any credit on, or make any deduction from the principal or interest payable in
respect of, the Notes (other than amounts properly withheld from such payments
under the Code) or assert any claim against any present or former Noteholder by
reason of the payment of the taxes levied or assessed upon any part of the
Collateral;


 


(iii)          (A) permit
the validity or effectiveness of this Indenture to be impaired, or permit the
lien of this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise, claim,
security interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or burden the
Collateral or any part thereof or any interest therein or the proceeds thereof
(other than tax liens, mechanics’ liens and other liens that arise by operation
of law, in each case with respect to any Collateral and arising solely as a
result of an action or omission of a Borrower or as otherwise permitted in the
Transfer and Servicing Agreement) or (C) permit the lien of this Indenture
not to constitute a valid first priority (other than with respect to any such
tax, mechanics’ or other lien) or as otherwise permitted in the Transfer and
Servicing Agreement) security interest in the Collateral;


 


(iv)          dissolve
or liquidate in whole or in part or merge or consolidate with any other Person;


 


(v)           remove
the Trust Administrator without cause unless the Rating Agency Condition shall
have been satisfied in connection with such removal;


 


(vi)          take
any other action or fail to take any action that would jeopardize the status of
the Holder of the Ownership Certificate as a REIT, a Qualified REIT Subsidiary
or an entity that is disregarded for federal income tax purposes that is wholly
owned by a


 


22





















 


REIT or a Qualified REIT Subsidiary under the
Code or result in an imposition of tax on the Issuer; or


 


(vii)         except
with the prior written consent of the Noteholders, take any action described in
Section 5.06 of the Trust Agreement.


 


Section 3.09.          Annual Statement as to Compliance.  The Issuer will deliver to the Indenture
Trustee, within 120 days after the end of each fiscal year of the Issuer
(commencing with the fiscal year ending December 31, 2005), an Officer’s
Certificate stating, as to the Authorized Officer signing such Officer’s
Certificate, that:


 


(i)            a
review of the activities of the Issuer during such year and of its performance
under this Indenture has been made under such Authorized Officer’s supervision;
and


 


(ii)           to
the best of such Authorized Officer’s knowledge, based on such review, the
Issuer has complied with all conditions and covenants under this Indenture
throughout such year or, if there has been a default in its compliance with any
such condition or covenant, specifying each such default known to such
Authorized Officer and the nature and status thereof.


 


23





















 


Section 3.10.          Treatment of Notes as Debt for Tax
Purposes.  The Issuer
shall, and shall cause the Trust Administrator and the Master Servicer to, treat
the Notes as indebtedness for all federal, state and local income, single
business, and franchise tax purposes.


 


Section 3.11.          [Reserved]


 


Section 3.12.          No Other
Business.  The Issuer shall not
engage in any business other than financing, purchasing, owning, selling and
managing the Collateral in the manner contemplated by this Indenture and the
Operative Agreements and activities incidental thereto.


 


Section 3.13.          No Borrowing.  The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness other than the Notes.


 


Section 3.14.          [Reserved].


 


Section 3.15.          Guarantees, Loans, Advances and
Other Liabilities.  Except
as contemplated by the Transfer and Servicing Agreement or this Indenture, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another’s
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.


 


Section 3.16.          Capital
Expenditures.  The Issuer shall
not make any expenditure (by long-term or operating lease or otherwise) for
capital assets (either realty or personalty).


 


Section 3.17.          Removal of Trust Administrator.  So long as any Notes are Outstanding, the
Issuer shall not remove the Trust Administrator without cause unless the Issuer
has received a letter from each Rating Agency to the effect that such removal
will not cause the then-current ratings on the Notes to be qualified, reduced
or withdrawn.


 


Section 3.18.          Restricted
Payments.  The Issuer shall not,
directly or indirectly, (i) pay any dividend or make any payment (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Owner Trustee or any owner of a beneficial interest
in the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; provided, however, the Issuer may
make, or cause to be made, payments and distributions as contemplated by, and
to the extent funds are available for such purpose under, the Transfer and
Servicing Agreement, any Swap Agreement, this Indenture or the Trust
Agreement.  The Issuer will not, directly
or indirectly, make payments to or from the Collection Account except in
accordance with this Indenture and the Operative Agreements.


 


Section 3.19.          Notice
of Events of Default.  The Issuer
shall promptly, and in no event more than three Business Days following such
event, give the Indenture Trustee, Trust Administrator, the Swap Counterparty
and each Rating Agency written notice of each Event of


 


24





















 


Default
hereunder, and each default on the part of the Trust Administrator, Master
Servicer or the Depositor of its obligations under the Transfer and Servicing
Agreement, to the extent a responsible officer of the Owner Trustee shall have
written notice or actual knowledge thereof.


 


Section 3.20.          Further
Instruments and Acts.  Upon
request of the Indenture Trustee or the Trust Administrator, the Issuer will
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of
this Indenture.


 


Section 3.21.          Covenants
of the Issuer.  All covenants of
the Issuer in this Indenture are covenants of the Issuer and are not covenants
of the Owner Trustee in its individual capacity.  The Owner Trustee is, and any successor Owner
Trustee under the Trust Agreement will be, entering into this Indenture on
behalf of the Issuer solely as Owner Trustee under the Trust Agreement and not
in its respective individual capacity, and in no case whatsoever shall the
Owner Trustee or any such successor Owner Trustee be personally liable on, or
for any loss in respect of, any of the statements, representations, warranties
or obligations of the Issuer hereunder, as to all of which the parties hereto
agree to look solely to the property of the Issuer.


 


Section 3.22.          Representations and Warranties
of the Issuer.  With
respect to the Mortgage Notes, the Issuer represents and warrants that:


 


(i)            This
Indenture creates a valid and continuing security interest (as defined in the
applicable Uniform Commercial Code (the “UCC”)) in the Mortgage Notes in favor
of the Indenture Trustee, which security interest is prior to all other liens,
and is enforceable as such against creditors of and purchasers from the Issuer;


 


(ii)           The
Mortgage Notes constitute “instruments” within the meaning of the applicable
UCC;


 


(iii)          The
Issuer owns and has good title to the Mortgage Notes free and clear of any
lien, claim or encumbrance of any Person;


 


(iv)          The
Issuer has received all consents and approvals required by the terms of the
Mortgage Notes to the pledge of the Mortgage Notes hereunder to the Indenture
Trustee;


 


(v)           All
original executed copies of each Mortgage Note have been or will be delivered
to the Indenture Trustee (or its custodian), as set forth in the Transfer and
Servicing Agreement;


 


(vi)          The
Issuer has received a written acknowledgement from the Indenture Trustee (or
its custodian) that it is holding the Mortgage Notes solely on behalf and for
the benefit of the Indenture Trustee;


 


(vii)         Other
than the security interest granted to the Indenture Trustee pursuant to this
Indenture, the Issuer has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Mortgage Notes.  The Issuer has not authorized the filing of
and is not aware of any financing statements against the Issuer that include a


 


25





















 


description of the collateral covering the
Mortgage Notes other than a financing statement relating to the security
interest granted to the Indenture Trustee hereunder or that has been
terminated.  The Issuer is not aware of
any judgment or tax lien filings against the Issuer; and


 


(viii)        None
of the Mortgage Notes has any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Indenture
Trustee.


 


(b)           The
representations and warranties set forth in this Section 3.22 shall
survive the Closing Date and shall not be waived.


 


ARTICLE FOUR



SATISFACTION AND DISCHARGE


 


Section 4.01.          Satisfaction and Discharge of
Indenture.  This Indenture shall
cease to be of further effect with respect to the Notes, except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive
payments of principal thereof and interest thereon, (iv) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of
the Indenture Trustee under Sections 3.03 and 4.02) and (v) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them, and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when either (I) the Transfer and Servicing Agreement has
been terminated pursuant to Section 9.01 thereof and no obligations remain
outstanding under the Swap Agreement or (II)


 


(A)          either


 


(1)           all
Notes theretofore authenticated and delivered (other than (i) Notes that
have been destroyed, lost or stolen and that have been replaced or paid as
provided in Section 2.05 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.03) have been delivered to the Indenture Trustee for
cancellation; or


 


(2)           all
Notes not theretofore delivered to the Trust Administrator for cancellation


 


(a)         have become due and payable,


 


(b)         will become due and payable at the
applicable Maturity Date within one year, or


 


(c)         are to be called for redemption within
one year under arrangements satisfactory to the Indenture Trustee for the
giving of notice


 


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of redemption by the Trust Administrator in
the name, and at the expense, of the Issuer,


 


and the Issuer, in the case of a., b. or
c.  above, has irrevocably deposited or
caused to be irrevocably deposited with the Trust Administrator cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness
on such Notes not theretofore delivered to the Indenture Trustee for
cancellation when due to the Maturity Date or Redemption Date (if the Notes are
called for redemption pursuant to Section 10.01 hereof), as the case may
be;


 


(B)           the
Issuer has paid or caused to be paid all other sums payable hereunder (and
under the Swap Agreement by the Issuer) by the Issuer;


 


(C)           the
Issuer has delivered to the Indenture Trustee an Officer’s Certificate and an
Opinion of Counsel (at the Issuer’s expense) and (if required by the TIA or the
Indenture Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 11.01
hereof and, subject to Section 11.02 hereof, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture with respect to the Notes have been complied with;
and


 


(D)          the
Issuer has delivered to each Rating Agency notice of such satisfaction and
discharge.


 


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Section 4.02.          Application
of Trust Money.  All moneys
deposited with the Trust Administrator pursuant to Sections 3.03 and 4.01
hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent, as the Trust Administrator may determine, to the
Holders of the particular Notes for the payment or redemption of which such moneys
have been deposited with the Trust Administrator, of all sums due and to become
due thereon for principal and interest; but such moneys need not be segregated
from other funds except to the extent required herein or in the Transfer and
Servicing Agreement or required by law.


 


Section 4.03.          Repayment of Moneys Held by
Paying Agent.  In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
moneys then held by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.03 and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.


 


Section 4.04.          Trust Money Received by
Indenture Trustee.  If the
Indenture Trustee receives any moneys in respect of the Collateral (other than
with respect to any amounts in respect of any payments or reimbursements of
fees, expenses or indemnity amounts properly owing to the Indenture Trustee
pursuant to the terms of any of the Operative Agreements), the Indenture
Trustee shall remit promptly such funds to the Trust Administrator.


 


ARTICLE FIVE



REMEDIES


 


Section 5.01.          Events
of Default.  “Event of Default”,
wherever used herein, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):


 


(i)            Default
for thirty days or more in the payment of any Current Interest on the Notes
when the same becomes due and payable under Section 6.02 of the Transfer
and Servicing Agreement and if the Class A Notes are no longer
outstanding, a default for thirty days or more in the payment of the related
Deferred Interest for the most senior class of Notes;


 


(ii)           failure
to pay the entire principal of any Note when the same becomes due and payable
under the Transfer and Servicing Agreement or on the applicable Maturity Date;


 


(iii)          failure
to observe or perform any covenant or agreement of the Issuer made in this
Indenture (other than a covenant or agreement, a default in the observance or
performance of which is elsewhere in this Section specifically dealt
with), or any representation or warranty of the Issuer made in this Indenture
or in any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been


 


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incorrect in any material respect as of the
time when the same shall have been made, and such default shall continue or not
be cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 60 days after there shall have been given, by
registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer
and the Indenture Trustee by the Holders of at least 25% of the Outstanding
Balance of the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a notice of Default hereunder;


 


(iv)          the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of the Issuer or any substantial part of the Collateral in
an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Collateral, or
ordering the winding-up or liquidation of the Issuer’s affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days;


 


(v)           the
receipt of notice from the Holder of the Ownership Certificate to the Indenture
Trustee of such Holder’s failure to qualify as a REIT, a Qualified REIT
Subsidiary or an entity that is disregarded for United States federal income
tax purposes that is wholly-owned by a REIT or a Qualified REIT Subsidiary; or


 


(vi)          the
commencement by the Issuer of a voluntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the appointment
or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part of
the Collateral, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its debts
as such debts become due, or the taking of any action by the Issuer in
furtherance of any of the foregoing.


 


The Issuer shall deliver to the Indenture
Trustee and the Swap Counterparty, within five days after the occurrence
thereof, written notice in the form of an Officer’s Certificate of any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (iii), its status and what action the Issuer is taking or
proposes to take with respect thereto.


 


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Section 5.02.          Acceleration of Maturity;
Rescission and Annulment. 
If an Event of Default should occur and be continuing, then and in every
such case the Indenture Trustee may, or shall, at the direction of the Holders
of Notes representing not less than a majority of the Outstanding Balance of
the Priority Class Notes, declare all the Notes to be immediately due and
payable, by a notice in writing to the Issuer and the Swap Counterparty (and to
the Indenture Trustee if given by Noteholders), and upon any such declaration
the unpaid principal amount of such Notes, together with accrued and unpaid
interest on the Notes through the date of acceleration, shall become
immediately due and payable.


 


At any time after such declaration of
acceleration of maturity has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article Five provided, the Holders of Notes
representing a majority of the Outstanding Balance of the Priority Class Notes,
by written notice to the Issuer, the Swap Counterparty and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:


 


(i)            the
Issuer has paid or deposited with the Trust Administrator a sum sufficient to
pay:


 


(a)         all payments of principal of and
interest on all affected Priority Class Notes and all other amounts that
would then be due hereunder or upon such Notes if the Event of Default giving
rise to such acceleration had not occurred; and


 


(b)         all sums paid or advanced by the
Indenture Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel;
and


 


(ii)           all
Events of Default, other than the nonpayment of the principal of the Notes that
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.12.


 


No such rescission shall affect any
subsequent default or impair any right consequent thereto.


 


The Holders of Non-Priority Class Notes
shall have no right to exercise any Noteholders’ rights referred to in this Article Five,
except to the extent expressly provided herein.


 


Section 5.03.          Collection of Indebtedness and
Suits for Enforcement by Indenture Trustee.


 


(a)           The
Issuer covenants that if (i) default is made in the payment of any Current
Interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the
payment of the principal of any Note when the same becomes due and payable on
the applicable Maturity Date, the Issuer will, upon demand of the Indenture
Trustee, pay to it, for the benefit of the Holders of the Notes, the whole amount
then due and payable on such Notes for principal and interest, with interest on
the overdue


 


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principal and,
to the extent payment at such rate of interest shall be legally enforceable, on
overdue installments of interest at the rate borne by the Notes and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel,
and such amounts as may be due to the Swap Counterparty.


 


(b)           In
case the Issuer shall fail forthwith to pay such amounts upon such demand, the
Indenture Trustee, in its own name and as trustee of an express trust, may
institute a Proceeding for the collection of the sums so due and unpaid, and
may prosecute such Proceeding to judgment or final decree, and may enforce the
same against the Issuer upon such Notes and collect in the manner provided by
law out of the property of the Issuer upon such Notes, wherever situated, the
moneys adjudged or decreed to be payable.


 


(c)           If
an Event of Default occurs and is continuing, the Indenture Trustee may, in its
discretion, or shall, at the direction of the Holders of Priority Class Notes
representing not less than a majority of the Outstanding Balance thereof, as
more particularly provided in Section 5.04, proceed to protect and enforce
its rights and the rights of the Noteholders, by such appropriate Proceedings
as the Indenture Trustee shall deem most effective to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.


 


(d)           In
case there shall be pending, relative to the Issuer or any other obligor upon
the Notes or any Person having or claiming an ownership interest in the
Collateral, Proceedings under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or other similar law, or in
case a receiver, assignee or trustee in bankruptcy or reorganization, or
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:


 


(i)            to
file and prove a claim or claims for the whole amount of principal and interest
owing and unpaid in respect of the Notes and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence, fraud, willful
misconduct or bad faith) and of the Noteholders allowed in such Proceedings;


 


31





















 


(ii)           unless
prohibited by applicable law and regulations, to vote on behalf of the Holders
of Notes in any election of a trustee, a standby trustee or Person performing
similar functions in any such Proceedings;


 


(iii)          to
collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute all amounts received with respect to the claims
of the Noteholders and of the Indenture Trustee on their behalf; and


 


(iv)          to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee or the Holders
of Notes allowed in any Proceedings relative to the Issuer, its creditors and
its property;


 


and any trustee, receiver, liquidator,
custodian or other similar official in any such Proceeding is hereby authorized
by each of such Noteholders to make payments to the Indenture Trustee and, in
the event that the Indenture Trustee shall consent to the making of payments
directly to such Noteholders, to pay to the Indenture Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Indenture Trustee,
each predecessor Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred by it or its agents,
and all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence, fraud, willful misconduct or bad
faith.


 


(e)           Nothing
herein contained shall be deemed to authorize the Indenture Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Noteholder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.


 


(f)            All
rights of action and of asserting claims under this Indenture, or under any of
the Notes, may be enforced by the Indenture Trustee without the possession of
any of the Notes or the production thereof in any trial or other Proceedings
relative thereto, and any such action or Proceedings instituted by the
Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes and the Swap Counterparty.


 


(g)           In
any Proceedings brought by the Indenture Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the
Indenture Trustee shall be a party), the Indenture Trustee shall be held to
represent all the Holders of the Notes, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.


 


Section 5.04.          Remedies;
Priorities.


 


(a)           If
an Event of Default shall have occurred and be continuing, the Indenture
Trustee may, and at the direction of Holders of Priority Class Notes representing
a majority of the Outstanding Balance thereof shall, do one or more of the
following (subject to Section 5.05):


 


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(i)            institute
Proceedings in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Notes or under this Indenture
with respect thereto, whether by declaration or otherwise, enforce any judgment
obtained and collect from the Issuer and any other obligor upon such Notes
moneys adjudged due;


 


(ii)           institute
Proceedings from time to time for the complete or partial foreclosure of this
Indenture with respect to the Collateral;


 


(iii)          exercise
any remedies of a secured party under the Relevant UCC and take any other
appropriate action to protect and enforce the rights and remedies of the
Indenture Trustee and the Holders of the Notes; and


 


(iv)          sell
the Collateral or any portion thereof or rights or interest therein, at one or
more public or private sales called and conducted in any manner permitted by
law;


 


provided, however, that the
Indenture Trustee may not sell or otherwise liquidate any Collateral following
an Event of Default, other than an Event of Default described in Section 5.01(i) or
(ii), unless (A) the Holders of 100% of the Outstanding Balance of the
Notes consent thereto or (B) the proceeds of such sale or liquidation
distributable to the Noteholders are sufficient to discharge in full all
amounts then due and unpaid upon such Notes for principal and interest or (C) the
Indenture Trustee determines that the Collateral will not continue to provide
sufficient funds for the payment of principal of and interest on the Notes as
they would have become due if the Notes had not been declared due and payable,
and the Indenture Trustee obtains the consent of Holders of 66-2/3% of the
Outstanding Balance of the Notes.  In
determining such sufficiency or insufficiency with respect to clauses (B) and
(C), the Indenture Trustee may, but need not, obtain and rely upon an opinion
of an Independent investment banking or accounting firm of national reputation
as to the feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.


 


(b)           If
the Indenture Trustee collects any money or property pursuant to this Article Five,
it shall pay out the money or property in the following order:


 


first:  to the Indenture Trustee, for all reasonable and customary costs or
expenses, including any reasonable and customary out-of-pocket attorneys’ fees,
incurred by it in connection with the enforcement of the remedies provided for
in this Article V and for any other unpaid amounts due to the Indenture
Trustee hereunder, to the Trust Administrator for any amounts due and owing to
it under the Transfer and Servicing Agreement, to the Custodian for any amounts
due and owing to them under the Custodial Agreement, and to the Owner Trustee,
to the extent of any reasonable and customary fees and expenses due and owing
to it (including pursuant to Section 7.03 of the Trust Agreement) and for
any other unpaid amounts due to the Owner Trustee under the Transfer and
Servicing Agreement;


 


second:  to the Master Servicer and Servicer for any Servicing Fees then due
and unpaid and any unreimbursed Advances and other servicing advances;


 


33





















 


third:  to the Swap Counterparty, any Net Swap Payments, if any, owed under
the Swap Agreement;


 


fourth:  to the Notes, all accrued and unpaid interest thereon and amounts in
respect of principal, and to the Swap Counterparty, any swap termination
payments, in each case according to the priorities set forth in Section 6.02
of the Transfer and Servicing Agreement; provided,
however, that accrued and unpaid interest shall be paid to
Noteholders of each Class of Notes before any payments in respect of
principal; and


 


fifth:  to the Owner Trustee or its Paying Agent for any amounts to be
distributed to the Holder of the Ownership Certificate.


 


The Indenture Trustee may fix a record date
and payment date for any payment to Noteholders pursuant to this Section.  At least 15 days before such record date, the
Issuer shall mail to each Noteholder and the Indenture Trustee a notice that
states the record date, the payment date and the amount to be paid.


 


Section 5.05.          Optional Preservation of the
Collateral.  If the Notes have
been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded
and annulled, the Indenture Trustee may, but need not, elect to maintain
possession of the Collateral.  It is the
desire of the parties hereto and the Noteholders that there be at all times
sufficient funds for the payment of principal of and interest on the Notes, and
the Indenture Trustee shall take such desire into account when determining
whether or not to maintain possession of the Collateral.  In determining whether to maintain possession
of the Collateral, the Indenture Trustee may, but need not, obtain and rely
upon an opinion (at the expense of the Issuer) of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Collateral for such purpose.


 


Section 5.06.          Limitation
of Suits.  Other than as
otherwise expressly provided herein in the case of an Event of Default, no
Holder of any Note shall have any right to institute any Proceeding, judicial
or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless:


 


(i)            such
Holder has previously given written notice to the Indenture Trustee of a
continuing Event of Default;


 


(ii)           the
Holders of not less than 25% of the Outstanding Balance of the Notes have made
written request to the Indenture Trustee to institute such Proceeding in
respect of such Event of Default in its own name as Indenture Trustee
hereunder;


 


(iii)          such
Holder or Holders have offered to the Indenture Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in complying with
such request;


 


34





















 


(iv)          the
Indenture Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute such Proceedings; and


 


(v)           no
direction inconsistent with such written request has been given to the
Indenture Trustee during such 60-day period by the Holders of a majority of the
Outstanding Balance of the Notes.


 


It is understood and intended that no one or
more Holders of Notes shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Notes or to obtain or to seek to
obtain priority or preference over any other Holders or to enforce any right
under this Indenture, except in the manner herein provided.


 


In the event the Indenture Trustee shall
receive conflicting or inconsistent requests and indemnity from two or more
groups of Holders of Notes, each representing less than a majority of the
Outstanding Balance of the Notes, the Indenture Trustee in its sole discretion
may determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.


 


Section 5.07.          Unconditional Rights of
Noteholders To Receive Principal and Interest.  Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note
or in this Indenture (or, in the case of redemption, on or after the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.


 


Section 5.08.          Restoration of Rights and Remedies.  If the Indenture Trustee or any Noteholder
has instituted any Proceeding to enforce any right or remedy under this
Indenture and such Proceeding has been discontinued or abandoned for any reason
or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.


 


Section 5.09.          Rights and Remedies Cumulative.  No right or remedy herein conferred upon or
reserved to the Indenture Trustee or to the Noteholders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.


 


Section 5.10.          Delay
or Omission Not a Waiver.  No
delay or omission of the Indenture Trustee or any Holder of any Note to
exercise any right or remedy accruing upon any Default or Event of Default
shall impair any such right or remedy or constitute a waiver of any such
Default


 


35





















 


or Event of
Default or an acquiescence therein. 
Every right and remedy given by this Article Five or by law to the
Indenture Trustee or to the Noteholders may be exercised from time to time, and
as often as may be deemed expedient, by the Indenture Trustee or by the
Noteholders, as the case may be.


 


Section 5.11.          Control
by Noteholders.  Except as
otherwise provided in Section 5.02, the Holders of a majority of the
Outstanding Balance of the Notes shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that:


 


(i)            such
direction shall not be in conflict with any rule of law or with this
Indenture;


 


(ii)           subject
to the express terms of Section 5.04, any direction to the Indenture
Trustee to sell or liquidate the Collateral shall be by Holders of Notes
representing not less than 100% of the Outstanding Balance of the Notes;


 


(iii)          if
the conditions set forth in Section 5.05 have been satisfied and the
Indenture Trustee elects to retain the Collateral pursuant to such Section,
then any direction to the Indenture Trustee by Holders of Notes representing
less than 100% of the Outstanding Balance of the Notes to sell or liquidate the
Collateral shall be of no force and effect; and


 


(iv)          the
Indenture Trustee may take any other action deemed proper by the Indenture
Trustee that is not inconsistent with such direction.


 


Notwithstanding the rights of the Noteholders
set forth in this Section, subject to Section 6.01(h), the Indenture
Trustee need not take any action that it determines might involve it in
liability or might materially adversely affect the rights of any Noteholders
not consenting to such action.


 


Section 5.12.          Waiver
of Past Defaults.  Prior to the
declaration of the acceleration of the maturity of the Notes as provided in Section 5.02,
the Holders of Notes of not less than a majority of the Outstanding Balance of
the Notes may waive, in writing, any past Default or Event of Default and its
consequences except a Default (a) in payment of principal of or interest
on any of the Notes or (b) in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the Holder of each
Note.  In the case of any such waiver,
the Issuer, the Indenture Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.


 


Upon any such waiver, such Default shall
cease to exist and be deemed to have been cured and not to have occurred, and
any Event of Default arising therefrom shall be deemed to have been cured and
not to have occurred, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.


 


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Section 5.13.          Undertaking
for Costs.  All parties to this
Indenture agree, and each Holder of a Note by such Holder’s acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this Indenture, or
in any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted
by the Indenture Trustee, (b) any suit instituted by any Noteholder, or
group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Balance of the Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on
any Note on or after the respective due dates expressed in such Note and in
this Indenture (or, in the case of redemption, on or after the Redemption
Date).


 


Section 5.14.          Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Issuer (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Indenture Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.


 


Section 5.15.          Action on
Notes.  The Indenture Trustee’s
right to seek and recover judgment on the Notes or under this Indenture shall
not be affected by the seeking, obtaining or application of any other relief
under or with respect to this Indenture. 
Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Collateral or upon any of
the assets of the Issuer.  Any money or
property collected by the Indenture Trustee shall be applied in accordance with
Section 5.04(b).


 


Section 5.16.          Performance and Enforcement of
Certain Obligations.


 


(a)           Promptly
following a request from the Indenture Trustee to do so, the Issuer shall take
all such lawful action as the Indenture Trustee may request to compel or secure
the performance and observance by the Seller, the Depositor, the Trust
Administrator or the Master Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Mortgage Loan
Purchase Agreement and Transfer and Servicing Agreement, and to exercise any
and all rights, remedies, powers and privileges lawfully available to the
Issuer under or in connection with the Transfer and Servicing Agreement to the
extent and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Seller, the Depositor,
the Trust Administrator or the Master Servicer, as applicable, under the
Mortgage Loan Purchase Agreement and Transfer and Servicing Agreement and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller, the Depositor, the Trust Administrator or the
Master Servicer of each of their applicable


 


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obligations
under the Mortgage Loan Purchase Agreement and Transfer and Servicing
Agreement.


 


(b)           If
an Event of Default has occurred and is continuing, the Indenture Trustee may,
and at the direction (which direction shall be in writing or by telephone
(confirmed in writing promptly thereafter)) of the Holders of a majority of the
Outstanding Balance of the Priority Class Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the
Depositor, the Trust Administrator or the Master Servicer under or in
connection with the Transfer and Servicing Agreement or the Seller under or in
connection with the Mortgage Loan Purchase Agreement, including the right or
power to take any action to compel or secure performance or observance by the
Seller, the Depositor or the Master Servicer, of each of their applicable
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Transfer and Servicing
Agreement, and any right of the Issuer to take such action shall be suspended.


 


ARTICLE SIX



THE INDENTURE TRUSTEE


 


Section 6.01.          Duties
of Indenture Trustee.


 


(a)           If
an Event of Default has occurred and is continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in its exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person’s own affairs.


 


(b)           Except
during the continuance of an Event of Default:


 


(i)            the
Indenture Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Indenture and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and


 


(ii)           in
the absence of bad faith fraud, negligence or willful misconduct on its part,
the Indenture Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and on their face conforming to the
requirements of this Indenture; however, the Indenture Trustee shall examine
the certificates and opinions to determine whether or not they conform on their
face to the requirements of this Indenture.


 


(c)           The
Indenture Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, its own willful misconduct, its own
fraud or its own bad faith, except that:


 


(i)            this
paragraph does not limit the effect of paragraph (a) of this Section;


 


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(ii)           the
Indenture Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer unless it is proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts;


 


(iii)          the
Indenture Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with this Indenture or upon a
direction received by it from the requisite Noteholders pursuant to Article V;
and


 


(iv)          the
Indenture Trustee shall not be required to take notice or be deemed to have
notice or knowledge of (a) any failure by the Issuer to comply with its
obligations hereunder or in the Operative Agreements or (b) any Default or
Event of Default, unless a Responsible Officer of the Indenture Trustee
assigned to and working in its corporate trust department obtains actual
knowledge of such Default or Event of Default or shall have received written
notice thereof.  In the absence of such
actual knowledge or notice, the Indenture Trustee may conclusively assume that
there is no Default or Event of Default.


 


(d)           Every
provision of this Indenture that in any way relates to the Indenture Trustee is
subject to the provisions of this Section.


 


(e)           The
Indenture Trustee shall not be liable for indebtedness evidenced by or arising
under any of the Operative Agreements, including principal of or interest on
the Notes, or interest on any money received by it except as the Indenture
Trustee may agree in writing with the Issuer.


 


(f)            Money
held in trust by the Indenture Trustee need not be segregated from other funds
except to the extent required by law or the terms of this Indenture or the
Transfer and Servicing Agreement.


 


(g)           No
provision of this Indenture shall require the Indenture Trustee to expend,
advance or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it provided, however, that the Indenture Trustee shall
not refuse or fail to perform any of its duties hereunder solely as a result of
nonpayment of its normal fees and expenses.


 


(h)           Every
provision of this Indenture or any Operative Agreement relating to the conduct
or affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section, Section 6.02 and to
the provisions of the TIA.


 


(i)            The
Indenture Trustee shall execute and deliver the Transfer and Servicing
Agreement and perform its duties thereunder.


 


(j)            The
Indenture Trustee shall not have any duty or obligation to manage, make any
payment with respect to, register, record, sell, dispose of, or otherwise deal
with the Collateral, or to otherwise take or refrain from taking any action under,
or in connection with, any document


 


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contemplated
hereby to which the Indenture Trustee is a party, except as expressly provided (i) in
accordance with the powers granted to and the authority conferred upon the
Indenture Trustee pursuant to this Indenture or any other Operative Agreement,
and (ii) in accordance with any document or instruction delivered to the
Indenture Trustee pursuant to the terms of this Indenture; and no implied
duties or obligations shall be read into this Indenture or any Operative
Agreement against the Indenture Trustee. 
The Indenture Trustee agrees that it will, at the cost and expense of
the Issuer, promptly take all action as may be necessary to discharge any liens
on any part of the Collateral that result from actions by, or claims against
itself (in its individual capacity, and not in the capacity of Indenture
Trustee) that are not related to the administration of the Collateral.


 


Section 6.02.          Rights
of Indenture Trustee.


 


(a)           The
Indenture Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person.  The Indenture Trustee need not investigate
any fact or matter stated in the document.


 


(b)           Before
the Indenture Trustee acts or refrains from acting, it may require an Officer’s
Certificate or an Opinion of Counsel, which shall not be at the expense of the
Indenture Trustee.  The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer’s Certificate or Opinion of Counsel.  The right of the Indenture Trustee to perform
any discretionary act enumerated in this Indenture or in any Operative
Agreement shall not be construed as a duty and the Indenture Trustee shall not
be answerable for other than its negligence, fraud, bad faith or willful
misconduct in the performance of such act.


 


(c)           The
Indenture Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys or a
custodian or nominee.


 


(d)           The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or
powers; provided, that the Indenture Trustee’s conduct does not constitute
willful misconduct, negligence, fraud or bad faith.


 


(e)           The
Indenture Trustee may consult with counsel, and any Opinion of Counsel with
respect to legal matters relating to this Indenture, any Operative Agreement
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with any Opinion of Counsel of such counsel.


 


(f)            In
the event that the Indenture Trustee is also acting as Paying Agent, Note
Registrar, Custodian or Trust Administrator hereunder or under any Operative
Agreement, the rights and protections afforded to the Indenture Trustee
pursuant to this Article Six shall be afforded to such Paying Agent, Note
Registrar, Custodian and Trust Administrator.


 


(g)           The
permissive rights of the Indenture Trustee enumerated herein shall not be
construed as duties.


 


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Section 6.03.          Individual Rights of Indenture
Trustee.  The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of
Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee.  Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights.  However, the Indenture Trustee must comply
with Section 6.11.


 


Section 6.04.          Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
any of the Operative Agreements or the Notes or the sufficiency of the
Collateral; it shall not be accountable for the Issuer’s use of the proceeds
from the Notes, and it shall not be responsible for any statement of the Issuer
or the Servicer in this Indenture, any Operative Agreement or in any other
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee’s certificate of authentication.


 


Section 6.05.          Notice
of Defaults.  If a Default occurs
and is continuing and if a Responsible Officer of the Indenture Trustee has
actual knowledge thereof, the Indenture Trustee shall give prompt written
notice thereof to each Noteholder and the Swap Counterparty.


 


Section 6.06.          Reports by Indenture Trustee to
Holders.  The Trust Administrator
shall deliver to each Noteholder such information with respect to the Notes as
may be required to enable such holder to prepare its federal and state income
tax returns and shall file such information returns with the Internal Revenue
Service with respect to payments or accruals of interest on the Notes as are
required to be filed under the Code or applicable Treasury Regulations.


 


Section 6.07.          Compensation
and Indemnity.  The Indenture
Trustee shall be entitled, as compensation for its services, a fee to be paid
by the Master Servicer as provided in the Transfer and Servicing
Agreement.  The Indenture Trustee’s
compensation shall not be limited by any law on compensation of a trustee of an
express trust.  The Indenture Trustee and
any co-trustee shall be reimbursed on behalf of the Issuer from funds in the
Collection Account, as provided in the Transfer and Servicing Agreement, for
all reasonable ordinary out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services
(as provided in the Transfer and Servicing Agreement).  Reimbursable expenses under this Section shall
include the reasonable compensation and expenses, disbursements and advances of
the Indenture Trustee’s agents, counsel, accountants and experts.  The Issuer shall indemnify the Indenture
Trustee, any co-trustee and their respective employees, directors and agents,
as provided in the Transfer and Servicing Agreement and from funds in the
Collection Account, against any and all claim, loss, liability or expense
(including attorneys’ fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder or under
any Operative Agreement, including, without limitation, the execution and
filing of any information returns.  The
Indenture Trustee or co-trustee, as applicable, shall notify the Issuer and the
Trust Administrator promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee or the
co-trustee, as applicable, to so notify the Issuer and the Trust Administrator
shall not relieve the Issuer or the Trust Administrator of its obligations hereunder.  The Issuer shall defend any such claim, and
the Indenture Trustee and any co-trustee may have separate counsel and the fees
and expenses of such counsel shall be payable on behalf of the Issuer from
funds in the Collection Account.  The
Issuer shall not be required to reimburse any


 


41





















 


expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee or any co-trustee through the Indenture Trustee’s or co-trustee’s, as
the case may be, own willful misconduct, negligence, fraud or bad faith.


 


The Issuer’s obligations to the Indenture
Trustee and any co-trustee pursuant to this Section shall survive the
resignation or removal of the Indenture Trustee and the termination of
discharge of this Indenture.  When the
Indenture Trustee or any co-trustee incurs expenses after the occurrence of a
Default specified in Section 5.01(iv) or (vi) with respect to
the Issuer, the expenses are intended to constitute expenses of administration
under Title 11 of the United States Code or any other applicable federal or
state bankruptcy, insolvency or similar law.


 


Section 6.08.          Replacement of Indenture Trustee.  No resignation or removal of the Indenture
Trustee and no appointment of a successor Indenture Trustee shall become
effective until the acceptance of appointment by the successor Indenture
Trustee pursuant to this Section.  The
Indenture Trustee may resign at any time by giving 90 days’ written notice
thereof to the Depositor, the Issuer, each Noteholder, the Swap Counterparty and
each Rating Agency.  The Issuer shall
remove the Indenture Trustee if:


 


(i)            the
Indenture Trustee fails to comply with Section 6.11;


 


(ii)           the
Indenture Trustee is adjudged bankrupt or insolvent;


 


(iii)          a
receiver or other public officer takes charge of the Indenture Trustee or its
property; or


 


(iv)          the
Indenture Trustee otherwise becomes incapable of acting.


 


If the Indenture Trustee resigns or is
removed or if a vacancy exists in the office of the Indenture Trustee for any
reason (the Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Issuer shall promptly appoint a successor
Indenture Trustee that satisfies the eligibility requirements of Section 6.11.


 


The resigning or removed Indenture Trustee
agrees to cooperate with any successor Indenture Trustee in effecting the
termination of the resigning or removed Indenture Trustee’s responsibilities
and rights hereunder and shall promptly provide such successor Indenture
Trustee all documents and records reasonably requested by it to enable it to
assume the Indenture Trustee’s functions hereunder.


 


A successor Indenture Trustee shall deliver a
written acceptance of its appointment to the retiring Indenture Trustee and to
the Issuer.  Thereupon the resignation or
removal of the retiring Indenture Trustee shall become effective, and the
successor Indenture Trustee shall have all the rights, powers and duties of the
Indenture Trustee under this Indenture. 
The successor Indenture Trustee shall mail a notice of its succession to
Noteholders and the Swap Counterparty. 
The retiring Indenture Trustee shall promptly transfer all property held
by it as Indenture Trustee to the successor Indenture Trustee.


 


If a successor Indenture Trustee does not
take office within 30 days after the retiring Indenture Trustee resigns or is
removed, the retiring Indenture Trustee, the Issuer or the Holders


 


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of a majority
in Outstanding Balance of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.


 


If the Indenture Trustee fails to comply with
Section 6.11, any Noteholder may petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.


 


Section 6.09.          Successor Indenture Trustee by
Merger.  If the Indenture Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Indenture Trustee; provided, that such
corporation or banking association shall be otherwise qualified and eligible
under Section 6.11.  The Indenture
Trustee shall provide each Rating Agency prior written notice of any such
transaction.


 


In case at the time such successor or
successors by merger, conversion or consolidation to the Indenture Trustee
shall succeed to the trusts created by this Indenture any of the Notes shall
have been authenticated but not delivered, any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor trustee
and deliver such Notes so authenticated; and in case at that time any of the
Notes shall not have been authenticated, any successor to the Indenture Trustee
may authenticate such Notes either in the name of any predecessor hereunder or
in the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.


 


Section 6.10.          Appointment of Co-Indenture
Trustee or Separate Indenture Trustee.


 


(a)           Notwithstanding
any other provisions of this Indenture, at any time, for the purpose of meeting
any legal requirement of any jurisdiction in which any part of the Collateral
may at the time be located, the Indenture Trustee shall have the power and may
execute and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Noteholders and the Swap Counterparty, such title to
the Collateral, or any part hereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable.  No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 6.11 and no notice to Noteholders of the appointment of any
co-trustee or separate trustee shall be required under Section 6.08
hereof.


 


(b)           Every
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and conditions:


 


(i)            all
rights, powers, duties and obligations conferred or imposed upon the Indenture
Trustee shall be conferred or imposed upon and exercised or performed by the
Indenture Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Indenture Trustee joining in such act), except to the
extent that under any law of any


 


43





















 


jurisdiction in which any particular act or
acts are to be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Collateral or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;


 


(ii)           no
trustee hereunder shall be personally liable by reason of any act or omission
of any other trustee hereunder; and


 


(iii)          the
Indenture Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee.


 


(c)           Any
notice, request or other writing given to the Indenture Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. 
Every instrument appointing any separate trustee or co-trustee shall
refer to this Indenture and the conditions of this Article Six.  Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. 
Every such instrument shall be filed with the Indenture Trustee.


 


(d)           Any
separate trustee or co-trustee may at any time constitute the Indenture Trustee,
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Indenture
on its behalf and in its name.  If any
separate trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.


 


Section 6.11.          Eligibility;
Disqualification.  The Indenture
Trustee shall at all times (i) satisfy the requirements of TIA Section 310(a),
(ii) have a combined capital and surplus of at least $100,000,000 as set
forth in its most recently published annual report of condition, (iii) have
a long-term debt rating equivalent to “A” or better by the Rating Agencies or
be otherwise acceptable to the Rating Agencies and (iv) not be an
Affiliate of the Issuer or the Owner Trustee. 
The Indenture Trustee shall comply with TIA Section 310(b),
including the optional provision permitted by the second sentence of TIA Section 310(b)(9);
provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are
met.


 


Section 6.12.          Representations and Warranties.  The Indenture Trustee hereby represents that:


 


(a)           the
Indenture Trustee is duly organized and validly existing as a national banking
association in good standing under the laws of the United States with power and
authority to own


 


44





















 


its properties
and to conduct its business as such properties are currently owned and such
business is presently conducted;


 


(b)           the
Indenture Trustee has the power and authority to execute and deliver this
Indenture and to carry out its terms; and the execution, delivery and
performance of this Indenture have been duly authorized by the Indenture
Trustee by all necessary corporate action;


 


(c)           the
consummation of the transactions contemplated by this Indenture and the
fulfillment of the terms hereof do not conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or without notice or
lapse of time) a default under the articles of organization or bylaws of the
Indenture Trustee or, to the knowledge of the Indenture Trustee, any agreement
or other instrument to which the Indenture Trustee is a party or by which it is
bound; and


 


(d)           to
the Indenture Trustee’s best knowledge, there are no proceedings or
investigations pending or threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Indenture Trustee or its properties: 
(i) asserting the invalidity of this Indenture, (ii) seeking
to prevent the consummation of any of the transactions contemplated by this
Indenture or (iii) seeking any determination or ruling that might
materially and adversely affect the performance by the Indenture Trustee of its
obligations under, or the validity or enforceability of, this Indenture.


 


Section 6.13.          Preferential Collection of
Claims Against Issuer. 
The Indenture Trustee shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b).  An Indenture Trustee which has resigned or
been removed shall be subject to TIA Section 311(a) to the extent
indicated.


 


ARTICLE SEVEN


 


NOTEHOLDERS’ LISTS AND REPORTS


 


Section 7.01.          Note Registrar To Furnish to the
Indenture Trustee the Names and Addresses of Noteholders.  The Note Registrar will furnish or cause to
be furnished to the Indenture Trustee at such times as the Indenture Trustee
may request in writing, within 30 days after receipt by the Note Registrar of
any such request, a list in such form as the Indenture Trustee may reasonably
require, of the names and addresses of the Holders of Notes as of a date not
more than 10 days prior to the time such list is furnished.


 


Section 7.02.          Preservation of Information:  Communications to Noteholders.


 


(a)           The
Trust Administrator shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Trust Administrator as provided in Section 7.01
and the names and addresses of Holders of Notes received by the Trust
Administrator in its capacity as Note Registrar.  The Trust Administrator may destroy any list
furnished to it as provided in such Section 7.01 upon receipt of a new
list so furnished.  If three or more
Noteholders, or one or more Holders of a Class of Notes evidencing not
less than 25% of the Outstanding Balance thereof (hereinafter


 


45





















 


referred to as “Applicants”), apply in
writing to the Trust Administrator or the Indenture Trustee, and such
application states that the Applicants desire to communicate with other holders
with respect to their rights under this Indenture or under the Notes, then the
Trust Administrator shall, within five Business Days after the receipt of such
application, afford such Applicants access, during normal business hours, to
the current list of Holders.  Every
Holder, by receiving and holding a Note, agrees with the Issuer, the Indenture
Trustee and the Trust Administrator that neither the Issuer, the Indenture
Trustee nor the Trust Administrator shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
under this Indenture, regardless of the source from which such information was
derived.


 


(b)           Noteholders
may communicate pursuant to TIA Section 312(b) with other Noteholders
with respect to their rights under this Indenture or under the Notes.


 


(c)           The
Issuer, the Indenture Trustee and the Trust Administrator shall have the
protection of TIA Section 312(e).


 


Section 7.03.          Reports
by Issuer.


 


(a)           The
Issuer shall:


 


(i)            file
with the Indenture Trustee and the Commission in accordance with the rules and
regulations prescribed from time to time by the Commission such additional
information, documents and reports with respect to compliance by the Issuer
with the conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations.  Delivery of such information, documents and
reports to the Indenture Trustee is for informational purposes only and the
Indenture Trustee’s receipt of such reports shall not constitute constructive
notice of any information contained therein or determinable from information
contained therein, including the Issuer’s compliance with any of its covenants
hereunder (as to which the Indenture Trustee is entitled to rely exclusively on
Officers’ Certificates); and


 


(ii)           supply
to the Trust Administrator (and the Trust Administrator shall transmit by mail
to all Noteholders described in TIA Section 313(c)) such summaries of any
information, documents and reports required to be filed by the Issuer pursuant
to clause (i) of this Section 7.03(a) and by rules and
regulations prescribed from time to time by the Commission.


 


(b)           Unless
the Issuer otherwise determines and notifies the Indenture Trustee and the
Trust Administrator in writing, the fiscal year of the Issuer shall end on December 31
of each year.


 


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Section 7.04.          Reports
by Indenture Trustee.  If
required by TIA Section 313(a), within 60 days after each March 1,
beginning with March 1, 2006, the Indenture Trustee shall mail to each
Noteholder as required by TIA Section 313(c) a brief report dated as of
such date that complies with TIA Section 313(a).  The Indenture Trustee also shall comply with
TIA Section 313(b).


 


A copy of each report at the time of its
mailing to Noteholders shall be filed by the Indenture Trustee with the
Commission and each securities exchange, if any, on which the Notes are
listed.  The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any securities exchange.


 


ARTICLE EIGHT



ACCOUNTS, DISBURSEMENTS
AND RELEASES


 


Section 8.01.          Collection
of Money.  Except as otherwise
expressly provided herein, the Indenture Trustee may demand payment or delivery
of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture.  The Indenture Trustee shall
apply all such money received by it as provided in this Indenture.  Except as otherwise expressly provided in
this Indenture, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the Collateral,
the Indenture Trustee may take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of appropriate
Proceedings.  Any such action shall be
without prejudice to any right to claim a Default or Event of Default under
this Indenture and any right to proceed thereafter as provided in Article Five.


 


Section 8.02.          Collection
Account.  On each Payment Date
and Redemption Date, the Paying Agent (or, if the Indenture Trustee acts as
Paying Agent, the Indenture Trustee) shall distribute all amounts on deposit in
the Collection Account as provided in Sections 5.08 and 6.02 of the Transfer
and Servicing Agreement.


 


Section 8.03.          Release
of Collateral.


 


(a)           Subject
to the payment of its fees and expenses pursuant to Section 6.07, the
Indenture Trustee may, and when required by the provisions of this Indenture
and the Transfer and Servicing Agreement shall, execute instruments to release
property from the lien of this Indenture, or convey the Indenture Trustee’s
interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture.  No party relying upon an instrument executed
by the Indenture Trustee as provided in this Article Eight shall be bound
to ascertain the Indenture Trustee’s authority, inquire into the satisfaction
of any conditions precedent or see to the application of any monies.


 


(b)           The
Indenture Trustee shall, at such time as there are no Notes outstanding and all
sums due to the Noteholders and the Swap Counterparty pursuant to the Transfer
and Servicing Agreement and all fees and expenses of the Indenture Trustee, the
Master Servicer, the Trust Administrator and the Custodian pursuant to this
Indenture or any other Operative Agreement


 


47





















 


have been
paid, release any remaining portion of the Collateral that secured the Notes
and the Swap Agreement from the lien of this Indenture and release to the
Issuer or any other Person entitled thereto any funds then on deposit in the
Trust Account and assign or transfer any outstanding Swap Agreement.  The Indenture Trustee shall release property
from the lien of this Indenture pursuant to this subsection (b) only
upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an
Opinion of Counsel and (if required by the TIA) Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)( 1) meeting the applicable
requirements of Section 11.01 hereof.


 


ARTICLE NINE



SUPPLEMENTAL INDENTURES


 


Section 9.01.          Supplemental Indentures Without
Consent of Noteholders.


 


(a)           Without
the consent of the Holders of any Notes but with prior notice to each Rating
Agency, the Issuer and the Indenture Trustee and with the prior written consent
of the Swap Counterparty (but only to the extent such supplemental indenture
materially adversely affects the amounts, priority or timing of payments under
the Swap Agreement), when authorized by an Issuer Order, at any time and from
time to time, may enter into one or more indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at the
date of the execution thereof), in form satisfactory to the Indenture Trustee,
for any of the following purposes:


 


(i)            to
correct or amplify the description of any property at any time subject to the
lien of this Indenture, or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subjected to the lien
of this Indenture, or to subject to the lien of this Indenture additional
property;


 


(ii)           to
evidence the succession, in compliance with the applicable provisions hereof,
of another person to the Issuer, and the assumption by any such successor of
the covenants of the Issuer herein and in the Notes contained;


 


(iii)          to
add to the covenants of the Issuer, for the benefit of the Holders of the
Notes, or to surrender any right or power herein conferred upon the Issuer;


 


(iv)          to
convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee;


 


(v)           (A) to
cure any ambiguity, (B) to correct or supplement any provision herein or
in any supplemental indenture that may be inconsistent with any other
provisions herein or in any supplemental indenture or to conform the provisions
hereof to those of the Offering Document, (C) to obtain or maintain a
rating for a Class of Notes from a nationally recognized statistical
rating organization, (D) to make any other provisions with respect to
matters or questions arising under this Indenture; provided, however, that no such supplemental indenture
entered into pursuant to clause (D) of this


 


48





















 


subparagraph (v) shall adversely affect
in any material respect the interests of any Holder not consenting thereto;


 


(vi)          to
evidence and provide for the acceptance of the appointment hereunder by a
successor trustee with respect to the Notes and to add to or change any of the
provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to
the requirements of Article ; or


 


(vii)         to
modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to effect the qualification of this Indenture under the TIA
or under any similar federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required by the TIA.


 


provided, however, that no
such supplemental indenture shall be entered into unless the Indenture Trustee
shall have received an Opinion of Counsel stating that as a result of such
supplemental indenture, the Trust will not be subject to federal income tax as
long as an entity that qualifies as a REIT under the Code holds directly, or
indirectly through one or more Qualified REIT Subsidiaries or entities that are
disregarded for United States federal income tax purposes that are wholly owned
by a REIT or a Qualified REIT Subsidiary, a 100% ownership interest in the
Ownership Certificate, and the Indenture Trustee receives an Officer’s
Certificate from the Holder of the Ownership Certificate that the Holder of the
Ownership Certificate qualifies as a REIT, a Qualified REIT Subsidiary or an
entity that is disregarded for federal income tax purposes that is wholly owned
by a REIT or a Qualified REIT Subsidiary under the Code and the Holder of the
Ownership Certificate holds a 100% ownership Interest in the Ownership
Certificate.


 


The Indenture Trustee is hereby authorized to
join in the execution of any such supplemental indenture and to make any
further appropriate agreements and stipulations that may be therein contained.


 


(b)           A
letter from each Rating Agency to the effect that any supplemental indenture
entered into pursuant to this Section 9.01 will not cause the then-current
ratings on the Notes to be qualified, reduced or withdrawn shall constitute
conclusive evidence that such amendment does not adversely affect in any
material respect the interests of the Noteholders.


 


Section 9.02.          Supplemental Indentures with
Consent of Noteholders. 
The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to each Rating Agency and with the consent
of the Holders of not less than 66-2/3% of the Outstanding Balance of the Notes
and with the prior written consent of the Swap Counterparty (but only to the
extent such supplemental indenture materially adversely affects the amounts,
priority or timing of payments under the Swap Agreement), by Act of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of the
Notes under this Indenture; provided, however, that no such
supplemental indenture shall, (i) adversely affect the interests of the
Noteholders without the consent of the Holder of each Outstanding Note affected
thereby, (ii) reduce in any manner the amount of, or delay the timing of,
payments


 


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in respect of
any Note, (iii) alter the obligations of the Servicer or the Indenture
Trustee to make an Advance or alter the servicing standards set forth in the
Transfer and Servicing Agreement or the Servicing Agreement, (iv) reduce
the aforesaid percentages of Notes the Holders of which are required to consent
to any such supplemental indenture, without the consent of the Holders of all
Notes affected thereby, or (v) permit the creation of any lien ranking
prior to or on a parity with the lien of this Indenture with respect to any
part of the Collateral or, except as otherwise permitted or contemplated
herein, terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security provided by
the lien of this Indenture and provided,
further, that such action shall not, as evidenced by an Opinion of
Counsel, subject the Trust to federal income tax as long as an entity that
qualifies as a REIT under the Code holds directly, or indirectly through one or
more Qualified REIT Subsidiaries or entities that are disregarded for United
States federal income tax purposes that are wholly owned by a REIT or a
Qualified REIT Subsidiary, a 100% ownership interest in the Ownership
Certificate, and provided further,
that the Indenture Trustee receives an Officer’s Certificate from the Holder of
the Ownership Certificate that the Holder of the Ownership Certificate
qualifies as a REIT, a Qualified REIT Subsidiary or an entity that is
disregarded for federal income tax purposes that is wholly owned by a REIT or a
Qualified REIT Subsidiary under the Code and the Holder of the Ownership
Certificate holds a 100% ownership Interest in the Ownership Certificate.


 


The Indenture Trustee may rely on an Opinion
of Counsel to determine whether or not any Notes would be affected by any
supplemental indenture and any such determination shall be conclusive upon the
Holders of all Notes, whether theretofore or thereafter authenticated and
delivered hereunder.


 


It shall not be necessary for any Act of
Noteholders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.


 


Promptly after the execution by the Issuer
and the Indenture Trustee of any supplemental indenture pursuant to this
Section, the Issuer shall mail to the Holders of the Notes to which such
amendment or supplemental indenture relates and each Rating Agency a notice
setting forth in general terms the substance of such supplemental indenture.  Any failure of the Indenture Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.


 


Section 9.03.          Execution of Supplemental
Indentures.  In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article Nine or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to receive,
and subject to Section 6.02, shall be fully protected in relying upon, in
addition to the documents required under Section 11.01, an Opinion of
Counsel to the effect provided in Section 9.07.  The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee’s own rights, duties, liabilities or immunities under this
Indenture or otherwise.


 


Section 9.04.          Effect of Supplemental Indenture.  Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and shall
be


 


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deemed to be
modified and amended in accordance therewith with respect to the Notes affected
thereby, and the respective rights, limitations of rights, obligations, duties,
liabilities and immunities under this Indenture of the Indenture Trustee, the
Issuer and the Holders of the Notes shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.


 


Section 9.05.          Conformity with Trust Indenture Act.  Every amendment of this Indenture and every
supplemental indenture executed pursuant to this Article IX shall conform
to the requirements of the Trust Indenture Act as then in effect so long as
this Indenture shall then be qualified under the Trust Indenture Act.


 


Section 9.06.          Reference in Notes to
Supplemental Indentures. 
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may, and if required
by the Indenture Trustee shall, bear a notation in a form approved by the
Indenture Trustee as to any matter provided for in such supplemental
indenture.  If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.


 


Section 9.07.          Opinion
of Counsel.  In connection with
any supplemental indenture pursuant to this Article Nine, the Indenture Trustee
shall be entitled to receive an Opinion of Counsel to the effect that such
supplemental indenture is authorized or permitted by this Indenture and that
all conditions precedent to the execution of such supplemental indenture in
accordance with the relevant provisions of this Article Nine have been
met.


 


Nothing in this Section shall be
construed to require that any Person obtain the consent of the Indenture
Trustee to any amendment or waiver or any provision of any document where the
making of such amendment or the giving of such waiver without obtaining the
consent of the Indenture Trustee is not prohibited by this Indenture or by the
terms of the document that is the subject of the proposed amendment or waiver.


 


ARTICLE TEN



REDEMPTION OF NOTES


 


Section 10.01.        Redemption.  The Notes are subject to redemption pursuant
to Section 9.02 of the Transfer and Servicing Agreement.  The Issuer shall furnish each Rating Agency
and the Swap Counterparty notice of such redemption.  If the Notes are to be redeemed pursuant to Section 9.02
of the Transfer and Servicing Agreement, FSC shall furnish notice of its
exercise of its option to redeem the Notes to the Indenture Trustee, the Swap
Counterparty and the Trust Administrator not later than 15 days prior to the Redemption
Date and FSC shall deposit by 10:00 A.M. 
New York City time on the Redemption Date with the Trust Administrator
in the Collection Account the Redemption Price of the Notes to be redeemed,
whereupon all such


 


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Notes shall be
due and payable on the Redemption Date upon the furnishing of a notice
complying with Section 10.02 hereof to each Holder of the Notes.


 


Section 10.02.        Form of
Redemption Notice.  Notice of
redemption under Section 10.01 shall be given by the Indenture Trustee by
first-class mail, postage prepaid, or by facsimile mailed or transmitted not
later than 10 days prior to the applicable Redemption Date to each Holder of
Notes and the Swap Counterparty, as of the close of business on the Record Date
preceding the applicable Redemption Date, at such entity’s address or facsimile
number appearing in the Note Register or in the Swap Agreement, as applicable.


 


All notices of redemption shall state:


 


(i)            the
Redemption Date;


 


(ii)           the
Redemption Price; and


 


(iii)          the
place where such Notes are to be surrendered for payment of the Redemption
Price (which shall be the office or agency of the Issuer to be maintained as
provided in Section 3.02).


 


Notice of redemption of the Notes shall be
given by the Indenture Trustee in the name and at the expense of the
Issuer.  Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.


 


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Section 10.03.        Notes
Payable on Redemption Date.  The
Notes or portions thereof to be redeemed shall, following notice of redemption
as required under Section 10.02 (in the case of redemption pursuant to Section 10.01)
and remittance to the Indenture Trustee of the Redemption Price as required
under Section 10.01, on the Redemption Date become due and payable at the
Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.


 


ARTICLE ELEVEN



MISCELLANEOUS


 


Section 11.01.        Compliance Certificates and
Opinions, etc.  Upon any application
or request by the Issuer to the Indenture Trustee to take any action under any
provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee:  (i) an Officer’s
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with, (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, and (iii) (if
required by the TIA) an Independent Certificate from a firm of certified public
accountants meeting the applicable requirements of this Section, except that,
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.


 


Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:


 


(i)            a
statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein
relating thereto;


 


(ii)           a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;


 


(iii)          a
statement that, in the opinion of each such signatory, such signatory has made
such examination or investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and


 


(iv)          a
statement as to whether, in the opinion of each such signatory, such condition
or covenant has been complied with.


 


Section 11.02.        Form of Documents Delivered
to Indenture Trustee.  In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons


 


53





















 


as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.


 


Any certificate or opinion of an Authorized
Officer of the Issuer may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon
which such officer’s certificate or opinion is based are erroneous.  Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Servicer, Subservicer, the Depositor, the Issuer or the Trust Administrator,
stating that the information with respect to such factual matters is in the
possession of the Servicer, the Subservicer, the Depositor, the Issuer or the
Trust Administrator, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.


 


Where any Person is required to make, give or
execute two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.


 


Whenever in this Indenture, in connection
with any application or certificate or report to the Indenture Trustee, it is
provided that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of the Issuer’s compliance with
any term hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate or
report (as the case may be), of the facts and opinions stated in such document
shall in such case be conditions precedent to the right of the Issuer to have
such application granted or to the sufficiency of such certificate or report.  The foregoing shall not, however, be
construed to affect the Indenture Trustee’s right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article Six.


 


Section 11.03.        Acts of
Noteholders.


 


(a)           Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Noteholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Noteholders in person or by agents duly appointed in
writing; and except as herein otherwise expressly provided such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the “Act” of the Noteholders signing such instrument or instruments.  Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 6.01) conclusive in favor of the
Indenture Trustee and the Issuer, if made in the manner provided in this
Section.


 


(b)           The
fact and date of the execution by any person of any such instrument or writing
may be proved in any manner that the Indenture Trustee deems sufficient.


 


(c)           The
ownership of Notes shall be proved by the Note Register.


 


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(d)           Any
request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Notes shall bind the Holder of every Note issued
upon the registration thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.


 


Section 11.04.        Notices, etc., to Indenture Trustee,
Trust Administrator, Issuer and Rating Agencies.  Any request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders or other documents
provided or permitted by this Indenture shall be in writing and if such
request, demand, authorization, direction, notice, consent, waiver or act of
Noteholders is to be made upon, given or furnished to or filed with:


 


(i)            the
Indenture Trustee by any Noteholder or by the Issuer shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Indenture Trustee at its Corporate Trust Office, or


 


(ii)           the
Trust Administrator by the Indenture Trustee, any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trust Administrator at its Corporate Trust
Office, or


 


(iii)          the
Issuer by the Indenture Trustee, the Trust Administrator or any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to the address provided in
the Transfer and Servicing Agreement, or at any other address previously
furnished in writing to the Indenture Trustee by the Issuer.  The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.


 


Notices required to be given to the Rating
Agencies and/or the Swap Counterparty by the Issuer, the Indenture Trustee, the
Trust Administrator or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to the address
provided in the Transfer and Servicing Agreement or such other address as shall
be designated by written notice to the other parties.


 


Section 11.05.        Notices
to Noteholders; Waiver.  Where
this Indenture provides for notice to Noteholders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class, postage prepaid to each Noteholder affected by
such event, at such Holder’s address as it appears on the Note Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice.  In any
case where notice to Noteholders is given by mail, neither the failure to mail
such notice nor any defect in any notice so mailed to any particular Noteholder
shall affect the sufficiency of such notice with respect to other Noteholders,
and any notice that is mailed in the manner herein provided shall conclusively
be presumed to have been duly given.


 


Where this Indenture provides for notice in
any manner, such notice may be waived in writing by any Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice.  Waivers
of notice by Noteholders shall be filed


 


55





















 


with the
Indenture Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.


 


In case, by reason of the suspension of
regular mail service as a result of a strike, work stoppage or similar
activity, it shall be impractical to mail notice of any event to Noteholders
when such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be satisfactory to
the Indenture Trustee shall be deemed to be a sufficient giving of such notice.


 


Where this Indenture provides for notice to
the Rating Agencies, failure to give such notice shall not affect any other
rights or obligations created hereunder, and shall not under any circumstance
constitute a Default or Event of Default.


 


Section 11.06.        Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or
conflicts with another provision hereof that is required to be included in this
Indenture by any of the provisions of the Trust Indenture Act, such required
provision shall control.


 


The provisions of TIA Sections 310 through
317 that impose duties on any person (including the provisions automatically
deemed included herein unless expressly excluded by this Indenture) are a part
of and govern this Indenture, whether or not physically contained herein.


 


Section 11.07.        Effect of Headings and Table of
Contents.  The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.


 


Section 11.08.        Successors
and Assigns.  All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind its
successors and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.


 


Section 11.09.        Severability.  In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.


 


Section 11.10.        Benefits of Indenture and
Consents of Noteholders. 
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the Owner Trustee, the Swap Counterparty and the Noteholders, any
benefit or any legal or equitable right, remedy or claim under this
Indenture.  Each Noteholder and Note
Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial
interest in a Note, consents to and agrees to be bound by the terms and
conditions of this Indenture. 
Notwithstanding anything to the contrary herein, the Swap Counterparty
is an express third party beneficiary of this Indenture.


 


Section 11.11.        Legal
Holidays.  In any case where the
date on which any payment is due shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Indenture) payment
need not be made on such date, but may be made on the next succeeding


 


56





















 


Business Day
with the same force and effect as if made on the date on which nominally due,
and no interest shall accrue for the period from and after any such nominal
date.


 


Section 11.12.        Governing Law.  THIS INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.


 


Section 11.13.        Counterparts.  This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.


 


Section 11.14.        Recording
of Indenture.  If this Indenture
is subject to recording in any appropriate public recording offices, such
recording is to be effected by the Issuer and at its expense accompanied by an
Opinion of Counsel (which may be counsel to the Indenture Trustee or any other
counsel reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any
other Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.


 


Section 11.15.        Trust
Obligations.


 


(a)           No
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Indenture Trustee or the Owner
Trustee in their respective individual capacities, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its respective individual capacity, any holder
of a beneficial interest in the Issuer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their respective individual capacities) and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.  For all purposes of this
Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles Six, Seven and Eight of the Trust
Agreement.


 


(b)           In
addition, (i) this Indenture is executed and delivered by U.S. Bank Trust
National Association, not individually or personally but solely as Owner
Trustee, in the exercise of the powers and authority conferred and vested in
it, (ii) each of the representations, undertakings and agreements herein
made on the part of the Issuer or the Owner Trustee is made and intended not as
personal representations, undertakings and agreements by U.S. Bank Trust
National Association, but is made and intended for the purpose for binding only
the Trust, (iii)


 


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nothing herein
contained shall be construed as creating any liability on U.S. Bank Trust
National Association, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the Indenture Trustee and by.  any Person claiming by, through or under the
Indenture Trustee, and (iv) under no circumstances shall U.S. Bank Trust
National Association be personally liable for the payment of any indebtedness
or expenses of the Issuer or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Indenture or the Operative Agreements.


 


Section 11.16.        No Petition.  The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuer,
or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Operative Agreements.


 


Section 11.17.        Inspection.  The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee and/or the
Swap Counterparty, during the Issuer’s normal business hours, to examine all
the books of account, records, reports and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by Independent
Public Accountants, and to discuss the Issuer’s affairs, finances and accounts
with the Issuer’s officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested.  The Indenture Trustee shall,
and shall cause its representatives to, hold in confidence all such information
except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the
extent that the Indenture Trustee may reasonably determine that such disclosure
is consistent with its obligations hereunder.


 


58





















 


IN
WITNESS WHEREOF, the Issuer, the Trust Administrator and the Indenture Trustee
have caused this Indenture to be duly executed by their respective officers,
thereunto duly authorized and duly attested, all as of the day and year first
above written.


 


	
   

  	
  FIELDSTONE MORTGAGE INVESTMENT

  TRUST, SERIES 2005-2, as Issuer

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  U.S. BANK TRUST
  NATIONAL

  ASSOCIATION, not in its individual

  capacity but solely as Owner Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Charles F. Pedersen

  	
   

  
	
   

  	
   

  	
  Name: Charles F. Pedersen

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK,
  N.A., not in its

  individual capacity but solely as Trust

  Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Amy Doyle

  	
   

  
	
   

  	
   

  	
  Name: Amy Doyle

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC BANK USA,
  NATIONAL

  ASSOCIATION, not in its individual
  capacity but

  solely as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
    /s/ Elena Zheng

  	
   

  
	
   

  	
   

  	
  Name: Elena Zheng

  
	
   

  	
   

  	
  Title: Assistant Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  Solely for purposes of Section 5.04,
  Section 9.01

  	
   

  
	
  and Section 9.02, accepted and agreed
  to by:

  	
   

  
	
   

  	
   

  
	
  MORGAN STANLEY
  CAPITAL SERVICES INC.,

  	
   

  
	
  as Swap Counterparty

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
    /s/ Nina C. Simmons

  	
   

  	
   

  
	
   

  	
   Name: 
  Nina C. Simmons

  	
   

  
	
   

  	
   Title:  Vice President

  	
   

  
										



 


[Signature Page to Fieldstone 2005-2 Indenture]


 





















 


EXHIBIT A


 


FORMS OF NOTES


 


UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO.  OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO.  OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.


 


THIS NOTE DOES NOT EVIDENCE AN OBLIGATION OF
OR AN INTEREST IN, AND IS NOT GUARANTEED BY, THE ISSUER, THE DEPOSITOR, THE
MASTER SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE, THE TRUST
ADMINISTRATOR, OR ANY AFFILIATE OF ANY OF THEM AND IS NOT INSURED OR GUARANTEED
BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.


 


[FOR LIBOR
NOTES AND THE CLASS M10 NOTES: 
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.] [FOR CLASS A-IO
NOTES:  PRINCIPAL WILL NOT BE
PAYABLE IN RESPECT OF THIS NOTE. 
INTEREST CALCULATED ON THIS NOTE IS BASED ON A NOTIONAL AMOUNT
DETERMINED AS DESCRIBED IN THE TRANSFER AND SERVICING AGREEMENT.  THE NOTIONAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE INITIAL NOTIONAL AMOUNT OF THIS NOTE AS SET FORTH HEREON.]


 


[FOR
SUBORDINATE NOTES:  THIS NOTE
IS SUBORDINATE IN RIGHT OF PAYMENT AS PROVIDED IN THE INDENTURE REFERRED TO
HEREIN.]


 


EACH PURCHASER OF THIS NOTE WILL BE DEEMED TO
HAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET FORTH IN SECTION 2.03 OF
THE INDENTURE.  ANY TRANSFER IN VIOLATION
OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO
TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE
CONTRARY TO THE ISSUER, THE INDENTURE TRUSTEE OR ANY INTERMEDIARY.


 


THIS NOTE MAY NOT BE ACQUIRED BY A
TRANSFEREE FOR, OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED (“ERISA”) OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”) OR TO ANY SUBSTANTIALLY SIMILAR LAW (“SIMILAR LAW”)
OR ANY ENTITY DEEMED TO


 


A-1





















 


HOLD THE PLAN
ASSETS OF THE FOREGOING (“BENEFIT PLAN”), UNLESS THE TRANSFEREE REPRESENTS AND
WARRANTS THAT THE ACQUISITION AND HOLDING OF THIS NOTE:  (X) WILL NOT RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE WHICH IS NOT COVERED BY PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”)
84-14, PTCE 90-1, PTCE 91-38, PTCE 95- 60, PTCE 96-23 OR SOME OTHER APPLICABLE
EXEMPTION AND (Y) WILL NOT RESULT IN A NON-EXEMPT VIOLATION OF ANY SIMILAR
LAW.  EACH INVESTOR IN THIS NOTE WILL BE
DEEMED TO MAKE THE FOREGOING REPRESENTATIONS AND WILL FURTHER BE DEEMED TO
REPRESENT, WARRANT AND COVENANT THAT IT WILL NOT SELL, PLEDGE OR OTHERWISE
TRANSFER THIS NOTE IN VIOLATION OF THE FOREGOING.


 


A-2





















 


FIELDSTONE MORTGAGE INVESTMENT
TRUST, SERIES 2005-[  ]


 


CLASS NOTES


 


	
  [Aggregate Class Principal Amount of the
  Class Notes: $]

  	
   

  	
  [Class Principal Amount of this Note:
  $]

  
	
   

  	
   

  	
   

  
	
  [Initial Class Notional Amount of the
  Class A-IO Notes: $]

  	
   

  	
  [Class Notional Amount of this Note:
  $]

  
	
   

  	
   

  	
   

  
	
  Interest Rate: 

  	
   

  	
  Initial Cut-off Date: July 1, 2005

  
	
   

  	
   

  	
   

  
	
  Number:

  	
   

  	
  CUSIP No.:

  



 


A-3





















 


FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES
2005-2, a statutory trust organized and existing under the laws of the State of
Delaware (herein referred to as the “Issuer”), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, [For LIBOR Notes and the Class M10 Notes:  the principal sum of                                   
($          ) payable on each
Payment Date in an amount equal to the result obtained by multiplying (A) the
Percentage Interest evidenced by this Note (obtained by dividing the initial Class Principal
Amount of this Note by the initial Class Principal Amount of all Class Notes,
both as specified above) and (B) the amount payable on such Payment Date
in respect of principal of the Class Notes] [For Class A-IO Notes: 
on each Payment Date, certain payments in respect of interest in an
amount equal to the result obtained by multiplying (A) the Percentage
Interest represented by this Note(obtained by dividing the initial Class Notional
Amount of this Note by the initial Class Notional Amount of all Class A-IO
Notes, both as specified above) and (B) the aggregate amount, if any,
payable on such Payment Date in respect of interest of the Class A-IO
Notes] pursuant to the Indenture dated as of July 1, 2005 (as amended and
supplemented from time to time, the “Indenture”), between the Issuer, Wells
Fargo Bank, N.A., as Trust Administrator (the “Trust Administrator”) and  HSBC Bank USA, National Association, a
national banking association, as Indenture Trustee (the “Indenture Trustee”); [For LIBOR Notes and the Class M10 Notes:
provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
Payment Date occurring in [                  ]
(the “Maturity Date”) or as otherwise specified in the Indenture.]  Capitalized terms used but not defined herein
have the meanings assigned to such terms in the Indenture or the Transfer and
Servicing Agreement dated as of July 1, 2005 (as amended and supplemented
from time to time, the “Transfer and Servicing Agreement”), by and among the
Trust, Fieldstone Mortgage Investment Corporation, as depositor (the “Depositor”),
Wells Fargo Bank, N.A., as trust administrator (in such capacity, the “Trust
Administrator”) and master servicer (in such capacity, the “Master Servicer”),
Fieldstone Servicing Corp., as servicer, Chase Home Finance LLC, as
subservicer, Fieldstone Investment Corporation, as seller, and the Indenture
Trustee, which agreements also contain rules as to construction that shall
be applicable herein.


 


[For LIBOR
Notes and the Class M10 Notes: 
The Issuer will pay interest on this Note at a per annum rate equal to
the applicable Interest Rate, on the principal amount of this Note outstanding
on the immediately preceding Payment Date (after giving effect to all payments
of principal made on such preceding Payment Date) on each Payment Date until
the principal of this Note is paid or made available for payment in full.] [For Class A-IO Notes:  The Issuer will pay interest on this Note at
a per annum rate equal to the applicable Interest Rate on each Payment Date on
the Note Notional Amount of this Class A-IO Note.]


 


Payments on this Note will be made on the
25th day of each month or, if such a day is not a Business Day, then on the
next succeeding Business Day, commencing in August, 2005 (each, a “Payment Date”),
to the Person in whose name this Note is registered [For LIBOR Notes:  at the
close of business on the Business Day immediately preceding such Payment Date]
[For Class A-IO Notes and Class M10
Notes:  at the close of
business on the last Business Day of the month immediately preceding the month
of such Payment Date] (the “Record Date”), in an amount equal to the product of
the Percentage Interest evidenced by this Note and the amount, if any, required
to be distributed to all the Notes of the Class represented by this
Note.  All sums distributable on this
Note are payable in the coin or currency of the United States of America


 


A-4





















 


which at the
time of payment is legal tender for the payment of public and private
debts.  Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.


 


[For LIBOR
Notes and the Class M10 Notes: 
All payments made by the Issuer with respect to this Note shall be
applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.]


 


Reference is made to the further provisions
of this Note set forth on the reverse hereof, which shall have the same effect
as though fully set forth on the face of this Note.


 


Unless the certificate of authentication
hereon has been executed by the Trust Administrator whose name appears below by
manual signature, this Note shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof, or be valid or obligatory for any
purpose.


 


A-5





















 


IN WITNESS WHEREOF, the Issuer has caused
this instrument to be signed, manually or in facsimile, by its Authorized
Officer, as of the date set forth below.


 


	
   

  	
  FIELDSTONE MORTGAGE
  INVESTMENT

  TRUST, SERIES 2005-2

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  U.S. BANK TRUST
  NATIONAL

  ASSOCIATION, not in its individual

  capacity but solely as Owner Trustee under

  the Trust Agreement

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
  , 2005

  
						



 


TRUST ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION


 


This is one of the Notes designated above and
referred to in the within-mentioned Indenture.


 


	
   

  	
  WELLS FARGO BANK,
  N.A., not in its

  individual capacity but solely as Trust

  Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
  , 2005

  
					



 


A-6





















 


FIELDSTONE MORTGAGE INVESTMENT
TRUST, SERIES 2005-2


 


This Note is one of a duly authorized issue
of Notes of the Issuer, all issued under the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for, a statement
of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. 
To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supersede such contradictory or inconsistent
provision herein.  This Note is subject
to all terms of the Indenture.


 


The Class 1-Al, Class 1-A2, Class 2-A1,
Class 2-A2, Class 2-A3 and Class A-IO Notes (the “Senior Notes”)
are, and will be, equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture. 
The rights of the Holders of the Class M1, Class M2, Class M3,
Class M4, Class M5, Class M6, Class M7, Class M8, Class M9
and Class M10 Notes (the “Subordinate Notes”) to receive payments or
distribution of interest and principal are, and will be, subordinate to the
rights of the Holders of the Senior Notes to receive payments of interest and
principal, respectively, as provided in the Indenture.


 


Payments to each Noteholder shall be made (i) by
check mailed to the Person whose name appears as the Registered Holder of this
Note (or one or more Predecessor Notes) on the books of the Note Registrar and
Paying Agent as of the close of business on each Record Date or (ii) upon
written request made to the Note Registrar and Paying Agent at least five
Business Days prior to the related Record Date by the Holder of a Note having
an initial Note Principal Amount of not less than $2,500,000, by wire transfer
in immediately available funds to an account specified in writing by such
Noteholder.  The final payment in
retirement of this Note shall be made only upon surrender of this Note to the
Note Registrar and Paying Agent at the office thereof specified in the notice
to Noteholders of such final payment mailed prior to the Payment Date on which
the final payment is expected to be made to the Holder thereof.


 


As provided in the Indenture and subject to
certain limitations set forth therein, the transfer of this Note may be registered
by the Note Registrar upon surrender of this Note for registration of transfer
at the office or agency designated by the Issuer pursuant to the Indenture,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Note Registrar duly executed by, the Holder hereof or such
Holder’s attorney duly authorized in writing, with such signature guaranteed by
an “eligible guarantor institution” meeting the requirements of the Note
Registrar, which requirements include membership or participation in the
Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature
guarantee program” as may be determined by the Note Registrar in addition to,
or in substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees.  No
service charge will be charged for any registration of transfer or exchange of
this Note, but the transferor may be required to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
such registration of transfer or exchange.


 


The Class 1-Al, Class l-A2, Class 2-Al,
Class 2-A2 and Class 2-A3 Notes will be issued in minimum
denominations of $25,000 in original principal amount and in integral multiples
of


 


A-7





















 


$1 in excess
thereof.  The Class A-IO Notes will
be issued in minimum denominations of $1,000,000 in original notional amount
and in integral multiples of $1,000 in excess thereof.  The Class Ml, Class M2, Class M3,
Class M4, Class M5, Class M6, Class M7, Class M8, Class M9
and Class M10 Notes will be issued in minimum denominations of $100,000 in
original principal amount and integral multiples of $1,000 in excess thereof.


 


The Notes are subject to optional redemption
in accordance with the Indenture and the Transfer and Servicing Agreement.


 


Each Noteholder and Note Owner, by acceptance
of a Note or, in the case of a Note Owner, a beneficial interest in a Note,
covenants and agrees that no recourse may be taken, directly or indirectly,
with respect to the obligations of the Issuer, the Owner Trustee or the
Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Indenture
Trustee, or the Owner Trustee in their respective individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture Trustee or
the Owner Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.


 


Each Noteholder and Note Owner, by acceptance
of a Note or, in the case of a Note Owner, a beneficial interest in a Note,
covenants and agrees by accepting the benefits of the Indenture that such
Noteholder or Note Owner will not at any time institute against the Depositor
or the Issuer, or join in any institution against the Depositor or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
other Operative Agreements.


 


Each Noteholder and Note Owner, by acceptance
of a Note or, in the case of a Note Owner, a beneficial interest in a Note,
consents to and agrees to be bound by the terms and conditions of the
Indenture.


 


The Issuer has entered into the Indenture and
this Note is issued with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Notes will qualify as
indebtedness of the Issuer secured by the Collateral.  Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for all federal, state and local income tax purposes as
indebtedness (except that any Note held by a person that, for federal income
tax purposes, owns or is treated as owning a 100% Percentage Interest of the
Ownership Certificate shall not be treated as outstanding indebtedness).


 


Prior to the due presentment for registration
of transfer of this Note, the Issuer, the Indenture Trustee, the Note Registrar,
the Paying Agent and any agent of the Issuer or the Indenture Trustee may treat
the Person in whose name this Note (as of the day of determination


 


A-8





















 


or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes, whether or not this Note be overdue, and none of the
Issuer, the Indenture Trustee, the Note Registrar, the Paying Agent or any such
agent shall be affected by notice to the contrary.


 


The Indenture permits, with certain
exceptions as therein provided, the amendment thereof by supplemental indenture
and the modification of the rights and obligations of the Issuer and the rights
of the Holders of the Notes under the Indenture at any time by the Depositor,
the Issuer and the Indenture Trustee with the consent of the Holders of not
less than 66-2/3% of the Outstanding Balance of the Notes for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of modifying in any manner the rights of the
Noteholders.  Any such consent or waiver
by the Holder of this Note (or any one or more Predecessor Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note.  The
Indenture also permits the amendment thereof, in certain limited circumstances,
or the waiver of certain terms and conditions set forth in the Indenture,
without the consent of Holders of the Notes issued thereunder.


 


The term “Issuer” as used in this Note
includes any successor to the Issuer under the Indenture.


 


The Notes are issuable only in registered
form in denominations as provided in the Indenture, subject to certain
limitations therein set forth.


 


THIS NOTE AND THE INDENTURE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.


 


No reference herein to the Indenture and no
provision of this Note or of the Indenture shall alter or impair the obligation
of the Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or currency
herein prescribed.


 


Anything herein to the contrary
notwithstanding, except as expressly provided in the Operative Agreements, none
of the Issuer in its individual capacity, the Owner Trustee in its individual
capacity, the Indenture Trustee in its individual capacity, any owner of a
beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture.  The Holder
of this Note by its acceptance hereof agrees that, except as expressly provided
in the Operative Agreements, in the case of an Event of Default under the
Indenture, the Holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided,


 


A-9





















 


however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.


 


A-10





















 


ASSIGNMENT


 


Social Security or
taxpayer I.D.  or other identifying
number of assignee:                      


 


FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto:


 


	
   

  
	
  (name and address of assignee)

  



 


the within Note and
all rights thereunder, and hereby irrevocably constitutes and appoints                          ,
attorney, to transfer said Note on the books kept for registration thereof,
with full power of substitution in the premises.


 


	
  Dated:

  	
   

  	
  */

  	
   

  
	
   

  	
   

  
	
  Signature
  Guaranteed:

  	
   

  
	
   

  	
   

  
	
   

  	
  */

  	
   

  



 










*/ NOTICE:  The signature to this assignment must
correspond with the name of the registered owner as it appears on the face of
the within Note in every particular, without alteration, enlargement or any
change whatever.  Such signature must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Note Registrar, which requirements include membership or participation in
STAMP or such other “signature guarantee program” as may be determined by the
Note Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended


 


A-11





















 


EXHIBIT B


 


[RESERVED]


 


B-1





















 


EXHIBIT C


 


FORM OF ERISA TRANSFER
AFFIDAVIT


 


 


	
   

  	
   

  
	
   

  	
  date

  



 


	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF NEW YORK

  	
  )

  



 


Re:                               Fieldstone Mortgage Investment Trust, Series 2005-2
Mortgage-Backed Notes, Series 2005-2


 


1.             The
undersigned is the                                             
of (the “Investor”), a [corporation duly organized] and existing under the laws
of                                            ,
on behalf of which he makes this affidavit.


 


2.             The
Investor either (i) is not, and on                       
[date of transfer] will not be, acquiring the Notes for, or on behalf of, an
employee benefit plan or other retirement arrangement that is subject to Section 406
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
or to Section 4975 of the Internal Revenue Code of 1986, as amended (or to
any substantially similar law (“Similar Law”)) or any entity deemed to hold the
plan assets of the foregoing (a “Benefit Plan”) or (ii) our acquisition
and holding of the Notes for, or on behalf of, a Benefit Plan will not result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Code which is not covered under Prohibited Transaction Class Exemption
(“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 or some other
applicable exemption, and will not result in a non-exempt violation of any
Similar Law.


 


3.             The
Investor hereby acknowledges that under the terms of the Indenture among
Fieldstone Mortgage Investment Trust, Series 2005-2, as Issuer, Wells
Fargo Bank, N.A., as Trust Administrator and HSBC Bank USA, National
Association, as Indenture Trustee, dated as of July 1, 2005, no transfer
of any Note shall be permitted to be made to any person unless the Indenture
Trustee has received a certificate from such transferee in the form hereof.


 


C-1





















 


IN WITNESS WHEREOF, the Investor has caused
this instrument to be executed on its behalf, pursuant to proper authority, by
its duly authorized officer, duly attested, this        
day of               ,
20  .


 


 


	
   

  	
   

  
	
   

  	
  [Investor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  STATE OF

  	
  )

  	
   

  	
   

  	
   

  
	
   

  	
  )

  	
  ss.:

  	
   

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  	
   

  	
   

  
						



 


Personally appeared before me the above-named
                    ,
known or proved to me to be the same person who executed the foregoing
instrument and to be the                   
of the Investor, and acknowledged that he executed the same as his free act and
deed and the free act and deed of the Investor.


 


Subscribed and sworn before me this      
day of            20  .


 


	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  
	
   

  	
   

  
	
   

  	
  My commission expires the

  
	
   

  	
   

  	
  day of 

  	
   

  	
  ,20

  	
   

  	
  .

  



 


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