exv4w1



 






Exhibit 4.1




 





FBR SECURITIZATION TRUST 2005-3,

as Issuer




WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Securities Administrator




and




HSBC BANK USA, NATIONAL ASSOCIATION,

as Indenture Trustee




 






INDENTURE




Dated as of October 1, 2005




 






FBR Securitization Trust 2005-3

Callable Mortgage-Backed Notes, Series 2005-3




 















 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	2	 
	 
	 	 	 	 	 	 
	SECTION 1.1
	 	Definitions	 	 	2	 
	SECTION 1.2
	 	Incorporation by Reference of Trust Indenture Act	 	 	6	 
	SECTION 1.3
	 	Rules of Construction	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE II THE NOTES	 	 	8	 
	 
	 	 	 	 	 	 
	SECTION 2.1
	 	Form	 	 	8	 
	SECTION 2.2
	 	Execution, Authentication and Delivery	 	 	8	 
	SECTION 2.3
	 	Limitation on Transfer of Notes	 	 	9	 
	SECTION 2.4
	 	Registration; Registration of Transfer and Exchange	 	 	11	 
	SECTION 2.5
	 	Mutilated, Destroyed, Lost or Stolen Notes	 	 	12	 
	SECTION 2.6
	 	Persons Deemed Noteholders	 	 	13	 
	SECTION 2.7
	 	Payment of Principal and Interest	 	 	14	 
	SECTION 2.8
	 	Cancellation	 	 	15	 
	SECTION 2.9
	 	Book-Entry Notes	 	 	15	 
	SECTION 2.10
	 	Notices to Depository	 	 	16	 
	SECTION 2.11
	 	Definitive Notes	 	 	16	 
	SECTION 2.12
	 	Tax Treatment	 	 	17	 
	 
	 	 	 	 	 	 
	ARTICLE III COVENANTS	 	 	17	 
	 
	 	 	 	 	 	 
	SECTION 3.1
	 	Payment of Principal and Interest	 	 	17	 
	SECTION 3.2
	 	Maintenance of Office or Agency	 	 	17	 
	SECTION 3.3
	 	Money for Payments to be Held in Trust	 	 	18	 
	SECTION 3.4
	 	Existence	 	 	20	 
	SECTION 3.5
	 	Protection of Trust Fund	 	 	20	 
	SECTION 3.6
	 	Opinions as to Trust Fund	 	 	21	 
	SECTION 3.7
	 	Performance of Obligations	 	 	21	 
	SECTION 3.8
	 	Negative Covenants	 	 	22	 
	SECTION 3.9
	 	Annual Statement as to Compliance	 	 	23	 
	SECTION 3.10
	 	No Other Business	 	 	23	 
	SECTION 3.11
	 	No Borrowing	 	 	23	 
	SECTION 3.12
	 	Guarantees, Loans, Advances and Other Liabilities	 	 	23	 
	SECTION 3.13
	 	Capital Expenditures	 	 	23	 
	SECTION 3.14
	 	[Reserved]	 	 	24	 
	SECTION 3.15
	 	Restricted Payments	 	 	24	 
	SECTION 3.16
	 	Notice of Events of Default	 	 	24	 
	SECTION 3.17
	 	Further Instruments and Acts	 	 	24	 
	SECTION 3.18
	 	Covenants of the Issuer	 	 	24	 
	SECTION 3.19
	 	Representations and Warranties of the Issuer	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE IV SATISFACTION AND DISCHARGE	 	 	26	 
	 
	 	 	 	 	 	 
	SECTION 4.1
	 	Satisfaction and Discharge of Indenture	 	 	26	 
	SECTION 4.2
	 	Application of Trust Money	 	 	28	 
	SECTION 4.3
	 	Reserved	 	 	28	 
	SECTION 4.4
	 	Trust Money Received by Indenture Trustee	 	 	28	 






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TABLE OF CONTENTS





	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE V EVENTS OF DEFAULT; REMEDIES	 	 	28	 
	 
	 	 	 	 	 	 
	SECTION 5.1
	 	Indenture Events of Default	 	 	28	 
	SECTION 5.2
	 	Acceleration of Maturity; Rescission and Annulment	 	 	29	 
	SECTION 5.3
	 	Collection of Indebtedness and Suits for Enforcement by Indenture Trustee	 	 	30	 
	SECTION 5.4
	 	Remedies; Priorities	 	 	32	 
	SECTION 5.5
	 	Optional Preservation of the Trust Fund	 	 	33	 
	SECTION 5.6
	 	Limitation of Suits	 	 	33	 
	SECTION 5.7
	 	Unconditional Rights of Noteholders To Receive Principal and Interest	 	 	34	 
	SECTION 5.8
	 	Restoration of Rights and Remedies	 	 	34	 
	SECTION 5.9
	 	Rights and Remedies Cumulative	 	 	34	 
	SECTION 5.10
	 	Delay or Omission Not a Waiver	 	 	34	 
	SECTION 5.11
	 	Control by Noteholders	 	 	35	 
	SECTION 5.12
	 	Waiver of Past Defaults	 	 	35	 
	SECTION 5.13
	 	Undertaking for Costs	 	 	36	 
	SECTION 5.14
	 	Waiver of Stay or Extension Laws	 	 	36	 
	SECTION 5.15
	 	Action on Notes	 	 	36	 
	SECTION 5.16
	 	Performance and Enforcement of Certain Obligations	 	 	37	 
	 
	 	 	 	 	 	 
	ARTICLE VI THE INDENTURE TRUSTEE	 	 	37	 
	 
	 	 	 	 	 	 
	SECTION 6.1
	 	Duties of Indenture Trustee	 	 	37	 
	SECTION 6.2
	 	Rights of Indenture Trustee	 	 	39	 
	SECTION 6.3
	 	Individual Rights of Indenture Trustee	 	 	40	 
	SECTION 6.4
	 	Indenture Trustee’s Disclaimer	 	 	40	 
	SECTION 6.5
	 	Notice of Indenture Defaults	 	 	40	 
	SECTION 6.6
	 	Reserved	 	 	40	 
	SECTION 6.7
	 	Compensation and Indemnity	 	 	40	 
	SECTION 6.8
	 	Replacement of Indenture Trustee	 	 	41	 
	SECTION 6.9
	 	Successor Indenture Trustee by Merger	 	 	42	 
	SECTION 6.10
	 	Appointment of Co-Indenture Trustee or Separate Indenture Trustee	 	 	43	 
	SECTION 6.11
	 	Eligibility; Disqualification	 	 	44	 
	SECTION 6.12
	 	Representations and Warranties	 	 	44	 
	SECTION 6.13
	 	Preferential Collection of Claims Against Issuer	 	 	45	 
	 
	 	 	 	 	 	 
	ARTICLE VII NOTEHOLDERS’ LISTS AND REPORTS	 	 	45	 
	 
	 	 	 	 	 	 
	SECTION 7.1
	 	Note Registrar To Furnish to the Indenture Trustee the Names and Addresses of Noteholders	 	 	45	 
	SECTION 7.2
	 	Preservation of Information; Communications to Noteholders	 	 	45	 
	SECTION 7.3
	 	Reports by Issuer	 	 	46	 
	SECTION 7.4
	 	Reports by Indenture Trustee	 	 	46	 
	 
	 	 	 	 	 	 
	ARTICLE VIII COLLECTIONS AND RELEASES	 	 	47	 
	 
	 	 	 	 	 	 
	SECTION 8.1
	 	Collection of Money	 	 	47	 
	SECTION 8.2
	 	Release of Trust Fund	 	 	47	 






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TABLE OF CONTENTS





	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE IX SUPPLEMENTAL INDENTURES	 	 	48	 
	 
	 	 	 	 	 	 
	SECTION 9.1
	 	Supplemental Indentures Without Consent of Noteholders	 	 	48	 
	SECTION 9.2
	 	Supplemental Indentures with Consent of Noteholders	 	 	50	 
	SECTION 9.3
	 	Execution of Supplemental Indentures	 	 	51	 
	SECTION 9.4
	 	Effect of Supplemental Indenture	 	 	51	 
	SECTION 9.5
	 	Conformity with Trust Indenture Act	 	 	51	 
	SECTION 9.6
	 	Reference in Notes to Supplemental Indentures	 	 	51	 
	 
	 	 	 	 	 	 
	ARTICLE X REDEMPTION OF NOTES	 	 	52	 
	 
	 	 	 	 	 	 
	SECTION 10.1
	 	Redemption	 	 	52	 
	SECTION 10.2
	 	Form of Redemption Notice	 	 	52	 
	SECTION 10.3
	 	Notes Payable on Redemption Date	 	 	52	 
	 
	 	 	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 	53	 
	 
	 	 	 	 	 	 
	SECTION 11.1
	 	Compliance Certificates and Opinions, etc	 	 	53	 
	SECTION 11.2
	 	Form of Documents Delivered	 	 	53	 
	SECTION 11.3
	 	Acts of Noteholders	 	 	54	 
	SECTION 11.4
	 	Notices, etc., to the Indenture Trustee, the Securities Administrator, the Issuer and the Rating Agencies	 	 	55	 
	SECTION 11.5
	 	Notices to Noteholders; Waiver	 	 	55	 
	SECTION 11.6
	 	Conflict with Trust Indenture Act	 	 	56	 
	SECTION 11.7
	 	Effect of Headings and Table of Contents	 	 	56	 
	SECTION 11.8
	 	Successors and Assigns	 	 	56	 
	SECTION 11.9
	 	Severability	 	 	56	 
	SECTION 11.10
	 	Benefits of Indenture and Consents of Noteholders	 	 	56	 
	SECTION 11.11
	 	Legal Holidays	 	 	57	 
	SECTION 11.12
	 	Governing Law	 	 	57	 
	SECTION 11.13
	 	Counterparts	 	 	57	 
	SECTION 11.14
	 	Recording of Indenture	 	 	57	 
	SECTION 11.15
	 	Trust Obligations	 	 	57	 
	SECTION 11.16
	 	No Petition	 	 	58	 
	SECTION 11.17
	 	Inspection	 	 	58	 
	 
	 	 	 	 	 	 
	EXHIBITS
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	EXHIBIT A-1
	 	Form of Offered Notes	 	 	 	 
	EXHIBIT A-2
	 	Form of Class N Notes	 	 	 	 
	EXHIBIT B
	 	Form of ERISA Transfer Affidavit	 	 	 	 
	EXHIBIT C-1
	 	Form of Transferor Certificate for Transfers of Class N Notes	 	 	 	 
	EXHIBIT C-2
	 	Form of Transfereee Certificate for Transfers of Class N Notes	 	 	 	 






iii









 






     This INDENTURE, dated as of October 1, 2005, is by and among FBR SECURITIZATION TRUST 2005-3,
a Delaware statutory trust, as issuer (the “Issuer”), WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association, as Securities Administrator (the “Securities Administrator”), and
HSBC BANK USA, NATIONAL ASSOCIATION, a national banking association, as indenture trustee (the
“Indenture Trustee”).



     Each party agrees as follows for the benefit of the other party, and for the equal and ratable
benefit of the Noteholders:



GRANTING CLAUSE




     The Issuer hereby Grants to the Indenture Trustee on the Closing Date, as trustee for the
benefit of the Noteholders, all of the Issuer’s right, title and interest, whether now owned or
hereafter acquired, in and to:



     (a) the Mortgage Loans and all interest, principal and applicable Prepayment Premiums due and
received thereon or with respect thereto after the Cut-off Date to the extent not applied in
computing the Cut-off Date Balance thereof;



     (b) the Accounts, and all amounts deposited therein pursuant to the Transfer and Servicing
Agreement;



     (c) the property that secures each Mortgage Loan, including the Mortgaged Properties that have
been acquired by foreclosure, deed-in-lieu of foreclosure or otherwise;



     (d) any other assets and all interest and principal received on or with respect to each
Mortgage Loan after the Cut-off Date to the extent not applied in computing the Cut-off Date
Balance thereof;



     (e) 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 Originators or the Seller to
repurchase Mortgage Loans from the Issuer), and, to the extent they relate to the Mortgage Loans,
the Purchase Agreements;



     (f) the Issuer’s rights and benefits but none of its obligations under the Custodial
Agreement;



     (g) the Mortgage Insurance Policy issued by Mortgage Guaranty Insurance Corporation;



     (h) the Issuer’s rights and benefits but none of its obligations under the Cap Agreement; and



     (i) all present and future claims, demands and causes of action in respect of the foregoing
and all payments on or under and all proceeds of every kind and nature whatsoever in respect 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,



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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 ((a) through (i), collectively, the “Trust Fund”).




     The foregoing Grant is made in trust to secure (a) the payment of principal of and interest on
the Notes, as well as any other amounts owing in respect thereof in accordance with their terms and
(b) the payment of all other sums payable under the Indenture with respect to the Notes, all of
which is to be done in compliance with the provisions of this Indenture.



     The Indenture Trustee, on behalf of the Noteholders, acknowledges such Grant, accepts the
trusts under this Indenture in accordance with the provisions hereof and agrees to perform its
duties as Indenture Trustee as required herein.



ARTICLE I




DEFINITIONS AND INCORPORATION BY REFERENCE




     SECTION 1.1 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: As defined in Section 11.3.



     Applicants: As defined in Section 7.2.



     Beneficial Noteholder: One or more persons owning an interest in a Book-Entry Note.



     Book-Entry Notes: Beneficial interests in Notes, the ownership and transfer of which shall be
evidenced or made through book entries by a Depository as described in Section 2.9; provided,
however, that after the occurrence of a condition whereupon Definitive Notes are to be issued to
Noteholders, such Book-Entry Notes shall no longer be “Book-Entry Notes.”



     Certificate: The certificate evidencing the ownership interest in the Issuer.



     Class Principal Amount: As defined in the Transfer and Servicing Agreement.



     Clearstream: Clearstream Banking, société anonyme, or any successor thereto.



     Closing Date: November 9, 2005.



     Definitive Notes: The meaning specified in Section 2.9.



     Depositor: FBR Securitization, Inc., or any successor thereto.



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



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



     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 Notes: As defined in Section 2.1.



     Grant: To 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 Trust Fund 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
Trust Fund 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.



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



     Indenture Event of Default: The meaning specified in Section 5.1.



     Independent Certificate: A certificate or opinion to be delivered to the Indenture Trustee
under the circumstances described in Section 11.1, 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 and satisfies the
definition of “Independent” in the Transfer and Servicing Agreement.



     Issuer: FBR Securitization Trust 2005-3, or any successor and, for purposes of any provision
contained herein and required by the TIA, each other obligor on the Notes.



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



     Master Servicer: Wells Fargo Bank, National Association, or any successor thereto.



     Mortgage Insurance Policy: The Mortgage Insurance Policy issued by Mortgage Guaranty
Insurance Corporation.



     Note or Notes: The Class A, Class M and Class N Notes, the forms of which are attached hereto
as Exhibits A-1 (with respect to the Offered Notes) and A-2 (with respect to the
Class N Notes).



3









 





     Noteholder: The Person that is the registered holder of a Note as reflected in the Note
Register.



     Note Register: As defined in Section 2.4.



     Note Registrar: The initial Note Registrar shall be the Securities Administrator.



     Officer’s Certificate: A certificate signed by any Authorized Officer of the Issuer under the
circumstances described in Section 11.1 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.



     Originators: Fremont Investment & Loan and its successors in interest and assigns.



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




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




     (b) Notes the payment for which money in the necessary amount has been theretofore
deposited with the Securities Administrator or any Paying Agent in trust for the
Noteholders; 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 Securities Administrator; and




     (c) 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 Noteholders representing the requisite percentage of the
then-outstanding Notes by aggregate Class Principal Amount have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any Operative Agreement,
those Notes owned by the Issuer, any other obligor upon the Notes, the Depositor, the Owner
Trustee, the Indenture Trustee, the Master Servicer, the Securities Administrator, the Servicer,
the Seller, the Originators or any Affiliate of any of the foregoing Persons shall be disregarded
and deemed not to be Outstanding. 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 the Noteholders representing 100% of the
aggregate Class Principal Amount of the Notes and the Notes representing 100% of the aggregate
Class Principal Amount of the Notes are 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, the Securities
Administrator, the Servicer, the Seller, the Originators, or any Affiliate of any of the foregoing
Persons.




4









 








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



     Permitted Transferee: Means (i) a single entity for federal income tax purposes that
qualifies as (a) a REIT, (b) a Qualified REIT Subsidiary, or (c) an entity that is disregarded for
federal income tax purposes that is wholly owned by a REIT or a Qualified REIT Subsidiary or (ii) a
lender or repurchase agreement counterparty in a repurchase agreement or secured lending
transaction that qualifies as a borrowing for federal income tax purposes.



     Plan: As defined in Section 2.3(a).



     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 2.5 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.



     Prohibited Transaction Class Exemption or PTCE: Prohibited Transaction Class Exemption
(“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 or other similar applicable
exemption.



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



     Qualified REIT Subsidiary: A direct or indirect 100% owned subsidiary of a REIT that
satisfies the requirements of Section 856(i) of the Code.



     QIB: A “qualified institutional buyer” as defined in Rule 144A under the Securities Act.



     Record Date: As to any Payment Date for any Book-Entry Notes, the last Business Day preceding
such Payment Date, and as to any Payment Date for any Definitive Notes, the last Business Day of
the month preceding each Payment Date.



     Redemption Date: In the case of a redemption of the Notes pursuant to Section 10.1, the
Payment Date specified by the Indenture Trustee in the notice delivered pursuant to Section 10.2.



     Retained Notes: Those certain Classes, or portions of Classes, of Notes that are held by the
Certificateholder or one of its affiliates.



     REIT: A real estate investment trust within the meaning of Section 856 of the Code.



     Securities Act: The Securities Act of 1933, as amended, including any rules or regulations
enacted thereunder.



     Seller: MHC I, Inc., or any successor thereto.



5









 





     Servicer: Wells Fargo Bank, National Association, or any successor thereto, will service the
mortgage loans from and after the servicing transfer date, expected to occur as of January 1, 2006.
From the Closing Date until the servicing transfer date, Fremont Investment & Loan will service
the mortgage loans.



     Similar Law: As defined in Section 2.3(a).



     STAMP: As defined in Section 2.4 hereof.



     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 October
1, 2005, among the Issuer, the Depositor, the Seller, the Credit Risk Manager, the Servicer, the
Master Servicer, the Securities Administrator and the Indenture Trustee, as such may be amended or
supplemented from time to time.



     Trust Fund: As defined in the Granting Clause of this Indenture.



     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 or the Owner Trust Agreement, as applicable.



     SECTION 1.2 Incorporation by Reference of Trust Indenture Act.



     (a) 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; and



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



     (b) 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.



6









 





     SECTION 1.3 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.



7









 





ARTICLE II



THE NOTES




     SECTION 2.1 Form.



     The Notes shall be designated as the “FBR Securitization Trust 2005-3 Callable Mortgage-Backed
Notes, Series 2005-3.” The Class A and Class M Notes shall be in substantially the same form as
set forth in Exhibit A-1 and the Class N Notes shall be in substantially the same form as
set forth in Exhibit A-2, in each case 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 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 notes representing the Book-Entry Notes (the “Global
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-1 and Exhibit A-2 are part of the terms of this Indenture.



     SECTION 2.2 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 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 Note Registrar 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	 	Initial Class	 	Maturity
	Designation	 	Principal Amount	 	Date
	AV1
	 	$	352,580,000	 	 	October 2035
	AV2-1
	 	 	173,830,000	 	 	October 2035
	AV2-2
	 	 	85,480,000	 	 	October 2035
	AV2-3
	 	 	107,180,000	 	 	October 2035
	AV2-4
	 	 	75,250,000	 	 	October 2035
	M-1
	 	 	30,550,000	 	 	October 2035






8









 






	 	 	 	 	 	 	 
	Class	 	Initial Class	 	Maturity
	Designation	 	Principal Amount	 	Date
	M-2	 	 	30,060,000	 	 	October 2035
	M-3	 	 	19,390,000	 	 	October 2035
	M-4	 	 	14,540,000	 	 	October 2035
	M-5	 	 	12,600,000	 	 	October 2035
	M-6	 	 	9,690,000	 	 	October 2035
	M-7	 	 	9,690,000	 	 	October 2035
	M-8	 	 	9,690,000	 	 	October 2035
	M-9	 	 	9,690,000	 	 	October 2035
	M-10	 	 	9,776,000	 	 	October 2035
	N-1	 	 	25,200,000	 	 	October 2035
	N-2	 	 	4,000,000	 	 	October 2035






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



     The Notes will be issued in minimum principal amount denominations of $100,000 and integral
multiples of $1 in excess thereof.



     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 Securities 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.



     SECTION 2.3 Limitation on Transfer of Notes.



     (a) No Definitive Note shall be transferred unless the Note Registrar shall have received a
representation from the transferee of such Note, satisfactory to the Note Registrar (such
requirement is satisfied only by the Note Registrar’s receipt of a transfer affidavit from the
transferee substantially in the form of Exhibit B hereto), to the effect that:




     (i) such transferee is not an employee benefit plan or other plan or arrangement
subject to Title I of ERISA or Section 4975 of the Code or a governmental plan (as defined
in Section 3(32) of ERISA) or a church plan (as defined in Section 3(33) of ERISA) or other
employee benefit plan or arrangement that is subject to any federal, state or local law
materially similar to the foregoing provisions of ERISA or the Code (“Similar Law”) (each, a
“Plan”) or any Person who is directly or indirectly purchasing such Note or interest therein
on behalf of or with “plan assets” (as defined under the Department of Labor Regulation (the
“DOL Regulations”) at 29 C.F.R. Section 2510.3-101) or corresponding provisions of Similar
Law) of a Plan; or




     (ii) the acquisition and holding of the Note or any interest therein will not give rise
to a nonexempt prohibited transaction under ERISA, the Code or 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



9









 







Registrar by the transferee’s acceptance of such Note that is also a Book-Entry Note (or the
acceptance by a Beneficial Noteholder of the beneficial interest in such Note).



     None of the Issuer, the Indenture Trustee, the Note Registrar, the Securities Administrator 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 2.3(a) or for the Indenture Trustee or the Securities
Administrator (or any Paying Agent on their behalf) making any payments due on such Note to its
Noteholder thereof or taking any other action with respect to such Noteholder 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 Issuer, the Indenture Trustee, the Note
Registrar, the Securities Administrator 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 Issuer, the Indenture Trustee, the Note Registrar, the Securities
Administrator 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 2.3, 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, the Note Registrar or any intermediary. The Securities
Administrator shall not make any payments on such Note for as long as such Person is the Noteholder
of such Note.



     The Issuer shall cause each Note to contain a legend substantially similar to the applicable
legend provided in Exhibit A-1 and Exhibit A-2 hereto stating that the 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 2.3 shall be void ab initio and shall not be given effect for any purpose hereunder.



     (c) Any Retained Notes will be subject to the same transfer restrictions applicable to the
Certificate as set forth in section 3.3 of the Owner Trust Agreement unless either (a) the Retained
Notes are sold to a party that is a taxable REIT subsidiary or is not affiliated with the owner of
the Certificate and at the time of such sale: (i) the owner of the Certificate is a Permitted
Transferee; (ii) no modifications have been made to the transaction documents; (iii) the respective
ratings of the Retained Notes as of the date of such sale is not lower than the rating of 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
opinion or (b) the holder of the Retained Notes otherwise receives a “will be debt” tax opinion
from a law firm generally recognized to be qualified to opine concerning the tax aspects of asset
securitization. For purposes of this Section 2.3(c), in determining whether a holder of Retained
Notes complies with the provisions of Section 3.3 of the Owner Trust Agreement, such holder will be
deemed to be the Certificateholder.



     (d) None of the Issuer, the Note Registrar, the Securities Administrator or the Indenture
Trustee will have the ability, duty or obligation to monitor transfers of the Notes while



10









 







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 2.3.



     (e) No transfer, sale, pledge or other disposition of any Class N Note or interest therein
shall be made unless that transfer, sale, pledge or other disposition is exempt from the
registration and/or qualification requirements of the Securities Act and any applicable state
securities laws, or is otherwise made in accordance with the Securities Act and such state
securities laws. If a transfer of any Class N Note is to be made without registration under the
Securities Act (other than in connection with the initial issuance thereof or a transfer thereof by
the Depositor or one of its Affiliates), then the Note Registrar shall refuse to register such
transfer unless it receives (and upon receipt, may conclusively rely upon) a certificate from the
Noteholder desiring to effect such transfer substantially in the form attached as Exhibit
C-1 hereto (which in the case of Book-Entry Notes, the Note Owner will be deemed to have
represented such certification) and a certificate from such Noteholder’s prospective transferee
substantially in the form attached as Exhibit C-2 hereto (which in the case of the
Book-Entry Notes, the Note Owner’s prospective transferee will be deemed to have represented such
certification). None of the Issuer, the Depositor, the Indenture Trustee or the Note Registrar is
obligated to register or qualify any Notes under the Securities Act or any other securities law or
to take any action not otherwise required under this Indenture to permit the transfer of any Note
or interest therein without registration or qualification. Any Noteholder desiring to effect a
transfer of Notes or interests therein shall, and does hereby agree to, indemnify the Issuer, the
Depositor, the Securities Administrator, the Owner Trustee, the Indenture Trustee and the Note
Registrar against any liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.



     (f) Notwithstanding the foregoing, neither an Opinion of Counsel nor a certification will be
required in connection with the initial transfer of any Class N Note by the Depositor to an
Affiliate of the Depositor or by an Affiliate to another Affiliate (in which case, the Depositor or
any Affiliate thereof shall be deemed to have represented that such Affiliate is not a Plan or any
Person investing “plan assets” of any Plan) and the Note Registrar shall be entitled to
conclusively rely upon a representation (which, upon the request of the Note Registrar, shall be a
written representation) from the Depositor of the status of such transferee as an Affiliate of the
Depositor.



     SECTION 2.4 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 the Note Registrar 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 Securities Administrator shall be the initial Note
Registrar. 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 or the Securities Administrator is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee and the Securities
Administrator prompt written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register.



11









 





     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 Noteholders and the principal amounts and number of such Notes.



     Subject to Section 2.3, upon surrender for registration of transfer of any Note at the office
of the Note Registrar to be maintained as provided in Section 3.2, the Issuer shall execute, and
the Note Registrar shall authenticate upon receipt of an Issuer Order 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 Noteholder, 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 upon receipt of an Issuer Order and
the Noteholder shall be entitled to obtain from the Note Registrar, 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 (a) duly
endorsed by the Noteholder thereof, or accompanied by a written instrument of transfer satisfactory
to the Note Registrar and (b) duly executed by the Noteholder thereof or such Noteholder’s attorney
duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution”
meeting the Note Registrar’s requirements, including membership or participation in the Securities
Transfer Agent’s Medallion Program (“STAMP”) or another “signature guarantee program” as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP.



     No service charge shall be made to a Noteholder 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, other than exchanges pursuant to this Section 2.4 not involving any
transfer.



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



     SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.



     If (a) any mutilated Note is surrendered to the Note Registrar, or the Note Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any Note, and (b) there is
delivered to the Note Registrar such security or indemnity as may be required by it to hold the
Issuer and the Note Registrar harmless, then, in the absence of actual notice to the Issuer, Note



12









 







Registrar or Indenture Trustee that such Note has been acquired by a protected purchaser, and
upon certification provided by the Noteholder of such Note that the requirements of Section 8-405
of the UCC are met, the Issuer shall execute, and upon its request the Indenture Trustee 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 protected purchaser of the
original Note in lieu of which such replacement Note was issued presents for payment such original
Note, the Issuer, the Indenture Trustee 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, the Indenture Trustee or the Note Registrar 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 Noteholder 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 or the
Note Registrar) 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.



     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 2.6 Persons Deemed Noteholders. 



     Prior to due presentment for registration of transfer of any Note, the Issuer, the Note
Registrar, the Indenture Trustee and any of their agents may treat the Person in whose name any
Note is registered (as of the day of determination) as the Noteholder 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 Note Registrar, the
Indenture Trustee or any of their agents shall be affected by notice to the contrary.



13









 





     SECTION 2.7 Payment of Principal and Interest.



     (a) On each Payment Date, the Indenture Trustee, or the Paying Agent on its behalf, will be
required to make payments of principal and interest on the Notes from amounts available therefor in
accordance with Section 7.7 of the Transfer and Servicing Agreement.



     (b) 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 related 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 Paying Agent at least five Business Days prior to the related Record Date, by the
Noteholder having an initial Class 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 2.11, with
respect to Notes registered on such Record Date in the name of the nominee of the Depository
(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 10.1), which shall be payable as provided below. The funds represented by any
such checks returned undelivered shall be held in accordance with Section 3.3.



     (c) Each class of Notes shall accrue interest at the Note Interest Rate as set forth in the
Transfer and Servicing Agreement, and such interest shall be payable on each Payment Date, subject
to Section 3.1.



     (d) Interest shall be computed on each class of Offered Notes on the basis of a 360-day year
and the actual number of days elapsed in each Interest Accrual Period. Interest shall be computed
on the Class N Notes on the basis of a 360-day year consisting of twelve 30-day months, regardless
of the actual number of days elapsed. With respect to each class of Offered Notes then
Outstanding, the Securities Administrator shall determine LIBOR for each applicable Interest
Accrual Period on the second LIBOR 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
pro rata by Percentage Interest to the Noteholders of such Class entitled thereto.



     (e) The principal of the Notes shall be payable in installments on each Payment Date as
provided herein and in accordance with Section 7.7 of the Transfer and Servicing Agreement. The
entire unpaid principal amount of the Notes shall be due and payable, if not previously paid, on
the date on which an Indenture Event of Default shall have occurred and be continuing if the
Indenture Trustee or the Noteholders representing not less than a majority of the then-outstanding
Notes by aggregate Class Principal Amount have declared the Notes to be immediately due and payable
in the manner provided in Section 5.2. All principal payments on a class of Notes shall be made
pro rata by Percentage Interest to the Noteholders of such Class entitled thereto.



14









 





     (f) The Note Registrar 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 10.2.



     SECTION 2.8 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 Note Registrar and
shall be promptly cancelled by the Note Registrar. 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 Note Registrar. 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 Note Registrar.



     SECTION 2.9 Book-Entry Notes.



     (a) Each class of Notes will be issued in the form of typewritten Notes or Global Notes
representing the Book-Entry Notes, to be delivered to the initial Depository or to the Securities
Administrator as custodian for the initial Depository 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 Depository, and no Noteholder thereof will receive a Definitive Note
representing such Noteholder’s interest in such Note, except as provided in Section 2.11.



     (b) Unless and until definitive, fully registered Notes (the “Definitive Notes”) have been
issued to such Noteholders in exchange for the Global Notes representing the Book-Entry Notes
pursuant to Section 2.11:




     (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
Depository for all purposes of this Indenture (including the payment of principal of and
interest on the Book-Entry Notes and the giving of instructions or directions hereunder) as
the sole holder of the Book-Entry Notes, and shall have no obligation to the Noteholders;




     (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; and



15









 






     (iv) the rights of the Beneficial Noteholders shall be exercised only through the
Depository and shall be limited to those established by law and agreements between such
Beneficial Noteholders and the Depository and/or the Depository Participants.



     (c) Unless and until Definitive Notes are issued in exchange for the Global Notes representing
the Book-Entry Notes pursuant to Section 2.11:




     (i) the Note Registrar shall not register any transfer of a beneficial interest in a
Book-Entry Note;




     (ii) the initial Depository will make book-entry transfers among the Depository
Participants and receive and transmit payments of principal of and interest on the Notes to
such Depository Participants; and




     (iii) whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Noteholders evidencing a specified percentage of the
then-outstanding Notes by aggregate Class Principal Amount, the Depository shall be deemed
to represent such percentage only to the extent that it has received instructions to such
effect from the Beneficial Noteholders and/or Depository Participants owning or
representing, respectively, such required percentage of the beneficial interest in the Notes
and has delivered such instructions to the Indenture Trustee.



     SECTION 2.10 Notices to Depository.



     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 Noteholders pursuant to Section
2.11, the Securities Administrator shall give all such notices and communications specified herein
to be given to the Beneficial Noteholders to the Depository, and shall have no obligation to such
Noteholders.



     SECTION 2.11 Definitive Notes.



     (a) Definitive Notes for Book-Entry Notes. If (i) the Depository 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 Indenture Event
of Default, the Beneficial Noteholders representing beneficial interests aggregating at least a
majority of the then-outstanding Book-Entry Notes by aggregate Class Principal Amount advise the
Depository in writing that the continuation of a book-entry system through the Depository is no
longer in the best interests of such Beneficial Noteholders, then the Depository shall notify all
Noteholders, the Beneficial Noteholders, the Note Registrar, the Securities Administrator and the
Indenture Trustee of the occurrence of any such event and of the availability of Definitive Notes
to the Beneficial Noteholders requesting the same. Upon surrender to the Securities Administrator
of the typewritten Notes representing the Book-Entry Notes by the Depository, accompanied by
registration instructions, the Issuer shall execute and upon receipt of an Issuer Order the Note
Registrar shall authenticate the Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar 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



16









 







Indenture Trustee and the Note Registrar shall recognize the former Beneficial Noteholders as
holders of the Definitive Notes and as Noteholders.



     SECTION 2.12 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 and franchise tax purposes, the Notes will qualify as
indebtedness of the Issuer secured by the Trust Fund. The Issuer, by entering into this Indenture,
and each Noteholder, by its acceptance of a Note (and each Noteholder by its acceptance of an
interest in the applicable Book-Entry Note), agree to treat the Notes for federal, state and local
income and franchise tax purposes as indebtedness of the Issuer, except that any Retained Notes
shall not be treated as issued and outstanding indebtedness for federal income tax purposes.



ARTICLE III



COVENANTS




     SECTION 3.1 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, the Transfer and
Servicing Agreement and this Indenture. 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. In order to receive
payments free from or at a reduced rate of withholding, each Noteholder, Beneficial Noteholder and
any transferees thereof agree and acknowledges that no legal or beneficial interest in all or any
portion of any Note may be obtained or transferred unless such person provides to the Note
Registrar a duly executed Internal Revenue Service (“IRS”) Form W-9, IRS Form W-8BEN, IRS Form
W-8IMY (together with all appropriate attachments), or IRS Form W-8ECI (or in each case the
appropriate successor form) claiming complete exemption from, or a reduced rate of, United States
federal withholding tax. Each such form must be signed under penalties of perjury and replaced
every three years (or earlier of there is a change in information) or as required by law.



     The Notes shall be non-recourse obligations of the Issuer and shall be limited in right of
payment to amounts available from the Trust Fund as provided in this Indenture. The Issuer shall
not otherwise be liable for payments of the Notes, and none of the owners, agents, officers,
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 3.1, the provisions
of this Section 3.1 shall control.



     SECTION 3.2 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.



17









 





     SECTION 3.3 Money for Payments to be Held in Trust.



     (a) As provided in Section 2.7, all payments of amounts due and payable with respect to any
Notes that are to be made from amounts withdrawn from the Payment Account and paid pursuant to the
Transfer and Servicing Agreement shall be made on behalf of the Issuer by the Indenture Trustee or
by the Paying Agent, and no amounts so withdrawn from such account for payments with respect to the
Notes shall be paid over to the Issuer except as provided in this Section.



     (b) Any Paying Agent shall be appointed by Issuer Order with written notice thereof to the
Indenture Trustee; provided that the Securities Administrator is appointed hereby as the initial
Paying Agent. 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 Securities Administrator or the Indenture Trustee) which is not, at
the time of such appointment, an institution:




     (i) that has:




          (A) commercial paper, short-term debt obligations, or other short-term
deposits are rated at least “A-1” or long-term unsecured debt obligations
are rated at least “A-” by S&P (or assigned comparable ratings by the other
Rating Agencies), if the amounts on deposit are to be held in the account
for no more than 365 days; or




          (B) commercial paper, short-term debt obligations, demand deposits, or
other short-term deposits are rated at least “A-1” by S&P, if the amounts on
deposit are to be held in the account for no more than 30 days and are not
intended to be used as credit enhancement; or




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



     (c) The Issuer shall cause each Paying Agent other than the Indenture Trustee and the initial
Paying Agent (who hereby makes the covenants set forth below) 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 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 pay such sums to such Persons
as herein provided;




     (ii) give the Indenture Trustee 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;



18









 






     (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.



     (d) 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.



     (e) 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 Order; and the Noteholder thereof
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 give notice to the remaining Noteholders to surrender their Notes for cancellation
and 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 notice, 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 Noteholders
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 Noteholder).



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     SECTION 3.4 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 Trust Fund and each other instrument or agreement
included in the Trust Fund.



     (b) Any successor to the Owner Trustee appointed pursuant to Section 9.2 of the Owner 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 Owner 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 3.5 Protection of Trust Fund.



     (a) The Issuer, from time to time, will 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 Trust Fund; or




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



     (b) The Issuer hereby designates the Indenture Trustee 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 3.5 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 3.5.



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     SECTION 3.6 Opinions as to Trust Fund.



     On the Closing Date, the Issuer shall furnish to the Securities 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 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 3.7 Performance of Obligations.



     (a) The Issuer will not take any action and will use commercially reasonable 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 Trust Fund 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 any other Operative 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.



     (c) The Issuer will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Operative Agreements, the Note Insurance Agreements and in the
instruments and agreements included in the Trust Fund, 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, the Transfer and Servicing Agreement and any other Operative Agreement
or Note Insurance 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 Indenture Event of Default under the Transfer and Servicing
Agreement, the Issuer shall promptly notify the Indenture Trustee 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 9.1(a) of the Transfer and Servicing
Agreement, the Indenture Trustee shall proceed in accordance with Section 9.1 and 9.2 of the
Transfer and Servicing Agreement.



     (f) The Issuer agrees:




     (i) that it will not, without the prior written consent of the Indenture Trustee, or
the Noteholders representing at least a majority of the then-outstanding Notes by aggregate
Class Principal Amount affected thereby, amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement,



21









 






termination, waiver or surrender of, the terms of the Trust Fund or the Operative
Agreements (except to the extent otherwise provided in any such Operative Agreement), or
waive timely performance or observance by the Master Servicer, the Securities Administrator,
the Servicer or the Depositor of their respective duties under the Transfer and Servicing
Agreement; and




     (ii) that any 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 Noteholders
representing the aforesaid percentage of the then-outstanding Notes by Class Principal
Amount affected thereby.



     If any such amendment, modification, supplement or waiver shall be so consented to by the
Indenture Trustee or such Noteholders, the Issuer agrees 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 3.8 Negative Covenants.



     So long as any Notes are Outstanding, the Issuer shall not:



     (a) except as expressly permitted by this Indenture 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 Trust Fund, unless directed to do so by the Indenture Trustee;



     (b) 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 Trust Fund;



     (c) (i) 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, (ii) 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 Trust Fund 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 Trust Fund and arising
solely as a result of an action or omission of a mortgagor or as otherwise permitted in the
Transfer and Servicing Agreement) or (iii) 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 Trust Fund;



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



22









 





     (e) except with the prior written consent of the Noteholders, take any action described in
Section 5.6 of the Owner Trust Agreement; or



     (f) take any action or fail to take any action that would result in an entity level tax on the
Trust.



     SECTION 3.9 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 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.



     SECTION 3.10 No Other Business.



     The Issuer shall not engage in any business other than financing, purchasing, owning, selling
and managing the Trust Fund in the manner contemplated by this Indenture and the Operative
Agreements and activities incidental thereto.



     SECTION 3.11 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 3.12 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 3.13 Capital Expenditures.



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



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     SECTION 3.14 [Reserved]



     SECTION 3.15 Restricted Payments.



     The Issuer shall not, directly or indirectly, (a) 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 holder of a beneficial interest in the Issuer or otherwise with respect
to any Certificate or equity interest or security in or of the Issuer, (b) redeem, purchase, retire
or otherwise acquire for value any such Certificate or equity interest or security or (c) 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, this Indenture or the other
Operative Agreements. The Issuer will not, directly or indirectly, make payments to or from the
Payment Account except in accordance with this Indenture and the Operative Agreements.



     SECTION 3.16 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, the Securities Administrator and each Rating Agency written notice of
each Indenture Event of Default hereunder, and each default on the part of the Master Servicer, the
Depositor or the Servicer 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 3.17 Further Instruments and Acts.



     Upon request of the Indenture Trustee or the Securities 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 3.18 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 Owner Trust Agreement will be, entering into this Indenture on behalf of
the Issuer solely as Owner Trustee under the Owner 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 3.19 Representations and Warranties of the Issuer.



     (a) 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
UCC) in the Mortgage Notes in favor of the Indenture Trustee, which security



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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 the Custodian), as set forth in the Transfer and Servicing
Agreement;




     (vi) The Issuer has received a written acknowledgement from the Indenture Trustee (or
the 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 current or terminated financing statements against the Issuer
that include a description of the collateral covering the Mortgage Notes, other than a
financing statement relating to the security interest granted to the Indenture Trustee
hereunder. 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 it has
been pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee.



     (b) With respect to the Contract Rights, the Issuer represents and warrants that:




     (i) This Indenture creates a valid and continuing security interest (as defined in the
applicable UCC) in the Issuer’s rights and benefits in the Transfer and Servicing Agreement,
the Custodial Agreement, the Purchase Agreements and the Cap Agreement (collectively, the
“Contract Rights”) in favor of the Indenture Trustee, which security interest is prior to
all other liens, and is enforceable as such as against creditors of and purchasers from the
Issuer;




     (ii) The Contract Rights constitute “general intangibles” within the meaning of the
applicable UCC;




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



25









 






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




     (v) The Issuer has caused or will have caused, within ten days, the filing of all
appropriate financing statements in the proper filing office in the appropriate jurisdiction
under the applicable law in order to perfect the security interest in the Contract Rights
granted to the Indenture Trustee hereunder;




     (vi) 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 Contract Rights. The Issuer has not authorized the filing of
and is not aware of any financing statements against the Issuer that include a description
of collateral covering the Contract Rights other than any 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 filing against the Issuer.



     (c) The representations and warranties set forth in this Section 3.19 shall survive the
Closing Date and shall not be waived.



ARTICLE IV



SATISFACTION AND DISCHARGE




     SECTION 4.1 Satisfaction and Discharge of Indenture.



     This Indenture shall cease to be of further effect with respect to the Notes, except as to (a)
rights of registration of transfer and exchange, (b) substitution of mutilated, destroyed, lost or
stolen Notes, (c) rights of Noteholders to receive payments of principal thereof and interest
thereon, (d) the rights and immunities of the Indenture Trustee and the Securities Administrator
(including in respect of its other capacities) under the Transfer and Servicing Agreement and
hereunder (including the rights of the Indenture Trustee under Section 6.7) and the obligations of
the Indenture Trustee and the Securities Administrator under Sections 3.3 and 4.2), and (e) the
rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the
Securities Administrator 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:



     (a) the Transfer and Servicing Agreement has been terminated pursuant to Section 9.1 thereof;



     (b) either:



26









 






     (A) all Notes theretofore authenticated and delivered (other than (1)
Notes that have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.5 and (2) 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 3.3) have been delivered to the Note Registrar for
cancellation; or




     (B) all Notes not theretofore delivered to the Note Registrar for
cancellation




     (1) have become due and payable,




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




     (3) are to be called for redemption within one year under
arrangements satisfactory to the Securities Administrator for the
giving of notice of redemption by the Securities Administrator in the
name and at the expense of the Issuer,




and the Issuer, in the case of (1), (2) or (3) above, has irrevocably
deposited or caused to be irrevocably deposited with the Securities
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 Securities Administrator for
cancellation when due to the Maturity Date or Redemption Date (if the
Notes are called for redemption pursuant to Section 10.1 hereof), as
the case may be;



     (c) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer;



     (d) the Issuer has delivered to the Indenture Trustee and the Securities Administrator an
Officer’s Certificate and an Opinion of Counsel at the Issuer’s expense, and, if required by the
TIA, the Indenture Trustee or the Securities Administrator, an Independent Certificate from a firm
of Accountants, each meeting the applicable requirements of Section 11.1 hereof and, subject to
Section 11.2 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



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



27









 





     SECTION 4.2 Application of Trust Money.



     All moneys deposited with the Securities Administrator pursuant to Sections 3.3 and 4.1 shall
be held in trust and applied by the Securities Administrator in accordance with the provisions of
the Notes, the Transfer and Servicing Agreement and this Indenture to the payment, either directly
or through any Paying Agent, as the Securities Administrator may determine, to the Noteholders of
the particular Notes for the payment or redemption of which such moneys have been deposited with
the Securities Administrator, of all sums due and to become due thereon for principal and interest.
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 4.3 Reserved.



     SECTION 4.4 Trust Money Received by Indenture Trustee.



     If the Indenture Trustee receives any moneys in respect of the Trust Fund (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 Securities Administrator.



ARTICLE V



EVENTS OF DEFAULT; REMEDIES




     SECTION 5.1 Indenture Events of Default.



     An “Indenture Event of Default” shall be deemed to occur upon any one of the following events
(whatever the reason for such Indenture 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):



     (a) default in the payment of any Current Interest on the Offered Notes when the same becomes
due and payable under Section 7.7 of the Transfer and Servicing Agreement, and such default
continues for a period of five days, or default in the payment of the Interest Payment Amount in
respect of the Class N Notes when the same becomes due and payable under Section 7.7 of the
Transfer and Servicing Agreement, and such default continues for six consecutive Payment Dates;



     (b) failure to pay the entire principal, and interest due in respect of the Class N Notes, of
any Note when the same becomes due and payable on a Payment Date or on the applicable Maturity
Date;



     (c) 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



28









 







the Issuer made in this Indenture or in any certificate or other writing delivered pursuant
hereto or in connection herewith proving to have been incorrect 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 30 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 Noteholders representing at least 25% of the then-outstanding Notes by aggregate Class Principal
Amount, 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 Indenture Default
hereunder;



     (d) 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 Trust Fund 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 Trust Fund, 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;



     (e) the Trust becomes subject to United States federal income tax at the entity level;



     (f) the Trust becomes an investment company required to be registered under the Investment
Company Act of 1940, as amended; or



     (g) 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 Trust Fund, 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, 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 Indenture Event of Default under clause (c), its
status and what action the Issuer is taking or proposes to take with respect thereto.



     SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.



     (a) If an Indenture Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee may, or at the direction of the Noteholders representing a majority of
the then-outstanding Notes by aggregate Class Principal Amount shall, declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee if
given by the 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.



29









 





     (b) 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
provided hereinafter in this Article V, the Noteholders representing a majority of the
then-outstanding Notes by aggregate Class Principal Amount, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences if:




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




     (A) all payments of principal of and interest on all affected Notes and
all other amounts that would then be due hereunder or upon such Notes if the
Indenture 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 their agents and counsel; and




     (ii) all Indenture 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.



     SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee.



     (a) In case the Issuer shall fail forthwith to pay amounts upon such demand, the Indenture
Trustee, in its own name and as trustee of an express trust, may, in its discretion, or shall, at
the direction of the Noteholders representing not less than a majority of the then-outstanding
Notes by aggregate Class Principal Amount 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.



     (b) If an Indenture Event of Default occurs and is continuing, the Indenture Trustee may, in
its discretion, or shall, at the direction of the Noteholders representing not less than a majority
of the then-outstanding Notes by aggregate Class Principal Amount, as more particularly provided in
Section 5.4, 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.



30









 





     (c) 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 Trust Fund, 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
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 or bad faith), and
of the Noteholders allowed in such Proceedings;




     (ii) unless prohibited by applicable law and regulations, to vote on behalf of the
Noteholders 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 Noteholders 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. In the
event that the Indenture Trustee shall consent to the making of payments directly to such
Noteholders, any trustee, receiver, liquidator, custodian or other similar official in any such
Proceeding is authorized 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 or bad faith.




     (d) 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



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reorganization, arrangement, adjustment or composition affecting the Notes or the rights of
any Noteholder 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.



     (e) 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 Noteholders.



     (f) 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 Noteholders, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.



     SECTION 5.4 Remedies; Priorities.



     (a) If an Indenture Event of Default shall have occurred and be continuing, the Indenture
Trustee may, and at the direction of the Noteholders representing a majority of the
then-outstanding Notes by aggregate Class Principal Amount, do one or more of the following
(subject to Section 5.5):




     (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 Trust Fund;




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




     (iv) sell the Trust Fund 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 Trust Fund
following an Indenture Event of Default, other than an Indenture Event of Default described in
Section 5.1(a) or 5.1(b), unless (A) 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 in
respect of the Class Principal Amount and interest (including any Deferred Interest and Basis Risk
Shortfall), (B) the proceeds of such sale or liquidation are sufficient to pay all amounts due and
payable by the Issuer pursuant to the Operative Agreements; or (C) the Indenture Trustee determines
that the Trust Fund will not continue to provide sufficient funds for the payment of


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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 the Noteholders
evidencing 66-2/3% of the then-outstanding Notes by aggregate Class Principal Amount. In
determining such sufficiency or insufficiency with respect to clauses (A), (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 Trust Fund for such purpose.




     (b) If the Indenture Trustee collects any money or property pursuant to this Article V, such
money or property shall be distributed in accordance with Section 7.7(f) of the Transfer and
Servicing Agreement.



     SECTION 5.5 Optional Preservation of the Trust Fund.



     If the Notes have been declared to be due and payable under Section 5.2 following an Indenture
Event of Default and such declaration and its consequences have not been rescinded and annulled,
the Indenture Trustee may elect to maintain possession of the Trust Fund. 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 Trust Fund. In determining
whether to maintain possession of the Trust Fund, 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 Trust Fund for such purpose.



     SECTION 5.6 Limitation of Suits.



     (a) Other than as otherwise expressly provided herein in the case of an Indenture Event of
Default, no Noteholder 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 Noteholder has previously given written notice to the Indenture Trustee of a
continuing Indenture Event of Default;




     (ii) Noteholders evidencing at least 25% of the then-outstanding Notes by aggregate
Class Principal Amount have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Indenture Event of Default in its own name as Indenture
Trustee hereunder;




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




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



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     (v) no direction inconsistent with such written request has been given to the Indenture
Trustee during such 60-day period by Noteholders evidencing a majority of the
then-outstanding Notes by aggregate Class Principal Amount.



     (b) It is understood and intended that no one or more Noteholders 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 Noteholders or to obtain or to seek to obtain priority or
preference over any other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided.



     (c) In the event the Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Noteholders, each representing less than a majority of the
then-outstanding Notes by aggregate Class Principal Amount, the Indenture Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding any other provisions
of this Indenture.



     SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal and Interest.



     Notwithstanding any other provisions in this Indenture, any Noteholder 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 Noteholder.



     SECTION 5.8 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 5.9 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 Noteholder to exercise any right or
remedy accruing upon any Indenture Default or Indenture Event of Default shall impair any such



34









 







right or remedy or constitute a waiver of any such Indenture Default or Indenture Event of
Default or an acquiescence therein. Every right and remedy given by this Article V 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.



     (a) Except as otherwise provided in Section 5.2, the Noteholders evidencing a majority of the
then-outstanding Notes by aggregate Class Principal Amount, 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) in the case of the Noteholders exercising such right and subject to the express
terms of Section 5.4, any direction to the Indenture Trustee to sell or liquidate the Trust
Fund must be submitted by the Noteholders representing not less than 66-2/3% of the
then-outstanding Notes by aggregate Class Principal Amount; and




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



     (b) Notwithstanding the rights of the Noteholders set forth in Section 5.11(a) subject to
Section 6.1(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 5.2, the Noteholders evidencing at least a majority of the then-outstanding Notes by
aggregate Class Principal Amount may waive, in writing, any past Indenture Default or Indenture
Event of Default and its consequences except an Indenture 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 each Noteholder. In the case of any such waiver, the
Issuer, the Indenture Trustee, and the Noteholders shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any subsequent or other
Indenture Default or impair any right consequent thereto.



     Upon any such waiver, such Indenture Default shall cease to exist and be deemed to have been
cured and not to have occurred, and any Indenture 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 Indenture Default or Indenture 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 Noteholder by such Noteholder’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. 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 then-outstanding Notes by
aggregate Class Principal Amount 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 Trust Fund 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 7.7(f) of the
Transfer and Servicing Agreement.



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     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 Credit Risk Manager, the Depositor, the Master Servicer, the
Servicer, the Securities Administrator, as applicable, of each of their obligations to the Issuer
under or in connection with the 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 Credit Risk Manager, the Servicer, the Securities Administrator or the Master Servicer, as
applicable, under the Transfer and Servicing Agreement and the institution of legal or
administrative actions or proceedings to compel or secure performance by the Seller, the Credit
Risk Manager, the Depositor, the Servicer, the Securities Administrator or the Master Servicer of
each of their applicable obligations under Transfer and Servicing Agreement.



     (b) If an Indenture 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 Noteholders evidencing a majority of the then-outstanding
Notes by Class Principal Amount, shall exercise all rights, remedies, powers, privileges and claims
of the Issuer against the Seller, the Depositor, the Credit Risk Manager, the Master Servicer, the
Servicer or the Securities Administrator under or in connection with the Transfer and Servicing
Agreement, including the right or power to take any action to compel or secure performance or
observance by the Seller, the Depositor, the Master Servicer, the Credit Risk Manager, the Servicer
or the Securities Administrator, 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 VI



THE INDENTURE TRUSTEE




     SECTION 6.1 Duties of Indenture Trustee.



     (a) If an Indenture 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 Indenture Event of Default:




     (i) the Indenture Trustee undertakes to perform 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



37









 






     (ii) in the absence of bad faith on its part, the Indenture Trustee may conclusively
rely upon certificates or opinions furnished to the Indenture Trustee as to the truth of the
statements and the correctness of the opinions expressed therein; 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 or its own bad faith, except that:




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




     (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 Indenture Default or Indenture 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 Indenture Default or
Indenture 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 Indenture Default or Indenture 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.



38









 





     (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 6.1 and Section 6.2 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 Trust Fund, or to
otherwise take or refrain from taking any action under, or in connection with, any document
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.
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 Trust Fund 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
Trust Fund.



     SECTION 6.2 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 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 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.



39









 





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



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



     SECTION 6.3 Individual Rights of Indenture Trustee.



     (a) The Indenture Trustee in its individual or any other capacity may become the Noteholder 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 6.4 Indenture Trustee’s Disclaimer.



     (a) 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
Trust Fund. The Indenture Trustee 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 6.5 Notice of Indenture Defaults.



     If an Indenture 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.



     SECTION 6.6 Reserved.



     SECTION 6.7 Compensation and Indemnity.



     The Indenture Trustee shall be entitled, as compensation for its services, to the Indenture
Trustee Fee, 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
Payment 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, against any and all claim, loss,
liability or expense (including attorneys’ fees)



40









 







incurred by it in connection with the administration of this trust and the performance of its
duties hereunder or under any Operative Agreement. The Indenture Trustee or co-trustee, as
applicable, shall notify the Issuer and the Securities 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 Securities Administrator shall not relieve the Issuer or the
Securities 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 Payment Account. The
Issuer shall not be required to reimburse any 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 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 or discharge
of this Indenture. When the Indenture Trustee or any co-trustee incurs expenses after the
occurrence of an Indenture Default specified in Section 5.1(d) or 5.1(e) 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 6.8 Replacement of Indenture Trustee.



     (a) No resignation or removal of the Indenture Trustee and no appointment of a successor
Indenture Trustee shall become effective until the acceptance of such 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 and each Rating
Agency. The Depositor may 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.



     (b) 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.



     (c) 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.



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     (d) 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 the Noteholders. The retiring Indenture Trustee
shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture
Trustee.



     (e) 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
Noteholders evidencing a majority of the then-outstanding Notes by aggregate Class Principal Amount
may petition any court of competent jurisdiction for the appointment of a successor Indenture
Trustee.



     (f) 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 6.9 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.



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     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 Trust Fund 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, such title to the Trust Fund, 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 6.8 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 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 Trust Fund 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 VI. 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



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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:



     (a) satisfy the requirements of TIA Section 310(a);



     (b) have a combined capital and surplus of at least $100,000,000 as set forth in its most
recently published annual report of condition;



     (c) have a long-term debt rating equivalent to “A” or better by the Rating Agencies or be
otherwise acceptable to the Rating Agencies; and



     (d) 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 and warrants to the other parties hereto as of the
Closing Date or such other date as is specified, that:



     (a) The Indenture Trustee has been duly organized and is validly existing as a national
banking association in good standing under the laws of the United States of America, with full
power and authority to own its assets and conduct its business as presently being conducted.



     (b) The Indenture Trustee has the full power and authority to execute and deliver this
Indenture and to perform its obligations hereunder, and the execution, delivery and performance of
this Indenture (including all instruments of transfer to be delivered pursuant to this Indenture)
by the Indenture Trustee and the consummation of the transactions contemplated hereby have been
duly and validly authorized.



     (c) This Indenture constitutes a legal, valid and binding obligation of the Indenture Trustee,
enforceable against the Indenture Trustee in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of creditors’ rights in general and
except as such enforceability may be limited by general principles of equity (whether considered in
a proceeding at law or in equity).



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     (d) None of the execution and delivery of this Indenture, the transactions contemplated hereby
or the fulfillment of or compliance with the terms and conditions of this Indenture will conflict
with or result in a breach of any of the terms, certificate of formation or operating Indenture or
any legal restriction or any Indenture or instrument to which the Indenture Trustee is now a party
or by which it is bound, or constitute a default or result in the violation of any law, rule,
regulation, order, judgment or decree to which Indenture Trustee or its property is subject, or
impair the ability of the Trust to realize on the Mortgage Loans, or impair the value of the
Mortgage Loans.



     (e) No consent, approval, authorization or order of any court or governmental agency or body
is required for the execution, delivery and performance by the Indenture Trustee of or compliance
by the Indenture Trustee with this Indenture, or if required, such consent, approval, authorization
or order has been obtained prior to the related Closing Date.



     (f) There is no action, suit, proceeding or investigation pending or to its knowledge
threatened against the Indenture Trustee which, either individually or in the aggregate, may result
in any material adverse change in the business, operations, financial condition, properties or
assets of the Indenture Trustee, or in any material impairment of the right or ability of the
Indenture Trustee to carry on its business substantially as now conducted, or which would draw into
question the validity of this Indenture or the Mortgage Loans or of any action taken or to be
contemplated herein, or which would be likely to impair materially the ability of the Indenture
Trustee to perform under the terms 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 VII



NOTEHOLDERS’ LISTS AND REPORTS




     SECTION 7.1 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 within 30
days after receipt by the Note Registrar of a written request from the Indenture Trustee, a list of
the names and addresses of the Noteholders as of a date not more than 10 Business Days prior to the
time such list is furnished.



     SECTION 7.2 Preservation of Information; Communications to Noteholders.



     (a) The Note Registrar shall preserve, in the most current form as is reasonably practicable,
the names and addresses of the Noteholders contained in the most recent list furnished to the
Indenture Trustee as provided in Section 7.1 and the names and addresses of Noteholders received by
the Note Registrar. The Note Registrar may destroy any list furnished to it as provided in Section
7.1 upon receipt of a new list so furnished. If three or more



45









 







Noteholders, or one or more Noteholders of a class of Notes evidencing not less than 25% of
the then-outstanding Notes by aggregate Class Principal Amount thereof (hereinafter referred to as
“Applicants”) apply in writing to the Note Registrar, and such application states that the
Applicants desire to communicate with other Noteholders with respect to their rights under this
Indenture or under the Notes, then the Note Registrar shall, within five Business Days after the
receipt of such application, afford such Applicants access, during normal business hours, to the
current list of Noteholders. Every Noteholder, by receiving and holding a Note, agrees with the
Issuer, the Note Registrar and the Indenture Trustee that none of the Issuer, the Note Registrar or
the Indenture Trustee shall be held accountable by reason of the disclosure of any such information
as to the names and addresses of the Noteholders under this Indenture, regardless of the source
from which such information was derived.



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



     (c) The Issuer, the Note Registrar and the Indenture Trustee shall have the protection of TIA
Section 3l2(c).



     SECTION 7.3 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; and




     (ii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail
to all Noteholders) such summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clause (i) of this Section 7.3(a) and by rules and
regulations prescribed from time to time by the Commission.



     (b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on
December 31 of each year.



     (c) Delivery of such reports, information and documents 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).



     SECTION 7.4 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



46









 




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 the 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 VIII



COLLECTIONS AND RELEASES




     SECTION 8.1 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 Trust Fund, 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 an
Indenture Default or Indenture Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.



     SECTION 8.2 Release of Trust Fund.



     (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 Order accompanied by (i) an Officer’s Certificate,
(ii) an Opinion of Counsel, (iii) certificates in accordance with TIA Sections 314(c) and 314(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, however, that no such Independent Certificates
or Opinion of Counsel 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. All
such releases shall be subject to the payment of the Indenture Trustee Fee and expenses pursuant to
Section 6.7.



     (b) The Servicer (or if the Servicer does not, the Master Servicer), on behalf of the Issuer,
shall be entitled to obtain a release from the lien of this Indenture and the release of the
Mortgage Files from the Custodian for any Mortgage Loan and the Mortgaged Property at any time:




     (i) after a payment of the Repurchase Price of the Mortgage Loan;



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     (ii) after a Qualified Substitute Mortgage Loan is substituted for such Mortgage Loan
and payment of the Substitution Adjustment 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 9.2 of the Transfer and Servicing Agreement.



     (c) The Indenture Trustee shall, if requested by the Servicer, temporarily release to such
party the Mortgage File pursuant to the provisions of the Transfer and Servicing Agreement and 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, at such time as there are no Notes that are Outstanding and
all sums due to the Noteholders pursuant to the Transfer and Servicing Agreement and all fees and
expenses of the Indenture Trustee, the Securities Administrator, the Paying Agent, the Note
Registrar and the Master Servicer pursuant to this Indenture, the Note Insurance Agreements or any
other Operative Agreement have been paid, release any remaining portion of the Trust Fund that
secured the Notes from the lien of this Indenture and release to the Issuer or any other Person
entitled thereto any funds then on deposit in the Collateral Account. The Indenture Trustee shall
release property from the lien of this Indenture pursuant to this subsection 8.2 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 11.1 hereof.



ARTICLE IX



SUPPLEMENTAL INDENTURES




     SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.



     (a) Without the consent of any Noteholder but with prior notice to each Rating Agency, the
Issuer, the Securities Administrator, the Depositor and the Indenture Trustee, when authorized by
an Issuer Order, at any time and from time to time, may enter into one or more supplemental
indentures (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;



48









 






     (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 contained in the Notes;




     (iii) to add to the covenants of the Issuer, for the benefit of the Noteholders, 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 any Prospectus,
(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 subclause (v) shall adversely affect
in any material respect the interests of any Noteholder 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 VI; 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 acceptable to the holder of the Certificate
stating that such supplemental indenture (i) will not cause the Trust to be subject to United
States federal income tax at an entity level and (ii) will not cause the Notes to lose their status
as debt for United States federal income tax purposes.




     The Indenture Trustee and the Securities Administrator are 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 9.1 will not cause the then-current ratings on the Notes to be
qualified, reduced or withdrawn (without regard to the Note Insurance Policy) shall constitute
conclusive evidence that such amendment does not adversely affect in any material respect the
interests of the Noteholders.



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     SECTION 9.2 Supplemental Indentures with Consent of Noteholders.



     The Issuer, the Securities Administrator 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
Noteholders representing not less than 66-2/3% of the then-outstanding Notes by aggregate Class
Principal Amount, by Act of such Noteholders delivered to the Issuer and the Indenture Trustee,
enter into an indenture or supplemental indentures 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 Noteholders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Noteholder of each Note affected,
adversely affect the interests of such Noteholders by (i) reducing in any manner the amount of, or
delay the timing of, payments in respect of any Note, (ii) altering the obligations of the Servicer
or the Master Servicer to make an Advance or altering the servicing standards set forth in the
Transfer and Servicing Agreement, (iii) reducing the aforesaid percentages of Notes the Noteholders
of which are required to consent to any such supplemental indenture, without the consent of the
Noteholders of all Notes affected thereby or (iv) permitting 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 Trust Fund or,
except as otherwise permitted or contemplated herein, terminating the lien of this Indenture on any
property at any time subject hereto or depriving any Noteholder of the security provided by the
lien of this Indenture; provided, further, that no such supplemental indenture shall be entered
into unless the Indenture Trustee shall have received an Opinion of Counsel acceptable to the
holder of the Certificate stating that such supplemental indenture (i) will not cause the Trust to
be subject to United States federal income tax at the entity level and (ii) will not cause the
Notes to lose their status as debt for United States federal income tax purposes.



     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
all Noteholders, whether theretofore or thereafter authenticated and delivered hereunder.



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



50









 





     SECTION 9.3 Execution of Supplemental Indentures.



     In executing, or permitting the additional trusts created by any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created by this Indenture,
the Indenture Trustee shall be entitled to receive and shall be fully protected in relying upon, an
Opinion of Counsel to the effect provided below, in addition to the documents required under
Section 11.1. Each of the Indenture Trustee and the Securities Administrator may, but shall not be
obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s or
the Securities Administrator’s own rights, duties, liabilities or immunities under this Indenture
or otherwise.



     In connection with any supplemental indenture pursuant to this Article IX, 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
IX have been met.



     Nothing in this Section shall be construed to require that any Person obtain the consent of
the Indenture Trustee or the Securities Administrator to any amendment or waiver of 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.



     SECTION 9.4 Effect of Supplemental Indenture.



     Upon the execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and shall be 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 Noteholders 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 9.5 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 9.6 Reference in Notes to Supplemental Indentures.



     Notes authenticated and delivered after the execution of any supplemental indenture pursuant
to this Article IX may, and if required by the Indenture Trustee or the Securities Administrator
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, the Securities Administrator or the Indenture Trustee
shall so determine, new Notes so modified as to conform to any such



51









 







supplemental indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Note Registrar in exchange for Outstanding Notes.



ARTICLE X



REDEMPTION OF NOTES




     SECTION 10.1 Redemption.



     The Notes are subject to redemption pursuant to Section 9.2 of the Transfer and Servicing
Agreement. If the Notes are to be redeemed pursuant to Section 9.2 of the Transfer and Servicing
Agreement, the Certificateholder or the Servicer, as applicable, shall furnish notice of its
exercise of its option to redeem the Notes to the Indenture Trustee, the Securities Administrator
and the Master Servicer no later than 20 days prior to the Redemption Date and the Depositor or the
Servicer, as applicable, shall deposit the Redemption Price of the Notes to be redeemed no later
than the Business Day prior to the Redemption Date with the Securities Administrator in the Payment
Account, whereupon all such Notes shall be due and payable on the Redemption Date upon the
furnishing of a notice complying with Section 10.2 hereof to each Noteholder. The Issuer shall
furnish each Rating Agency notice of such redemption.



     SECTION 10.2 Form of Redemption Notice.



     (a) Notice of redemption under Section 10.1 shall be given by the Securities Administrator 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 Noteholder, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Noteholder’s address or facsimile
number appearing in the Note Register.



     (b) 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 3.2).



     (c) Notice of redemption of the Notes shall be given by the Securities Administrator in the
name and at the expense of the Issuer. Failure to give notice of redemption, or any defect
therein, to any Noteholder shall not impair or affect the validity of the redemption of any other
Note.



     SECTION 10.3 Notes Payable on Redemption Date.



     The Notes or portions thereof to be redeemed shall, following notice of redemption as required
under Section 10.2 (in the case of redemption pursuant to Section 10.1) and remittance to the
Indenture Trustee of the Redemption Price as required under Section 10.1, on the



52









 







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 XI



MISCELLANEOUS




     SECTION 11.1 Compliance Certificates and Opinions, etc.



     (a) Upon any application or request by the Issuer to the Indenture Trustee or the Securities
Administrator, Note Registrar or Paying Agent to take any action under any provision of this
Indenture, the Issuer shall furnish to the Indenture Trustee, Securities Administrator, the Note
Registrar or the Paying Agent, as applicable: (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 Independent 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.



     (b) 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 11.2 Form of Documents Delivered.



     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



53









 







other such Persons 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 Depositor, the Issuer, the Servicer or the Master
Servicer, stating that the information with respect to such factual matters is in the possession of
the Depositor, the Issuer, the Servicer or the Master Servicer, 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 into one instrument.



     In connection with any application or certificate or report, if the Issuer is required to
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 right of the
Indenture Trustee, the Securities Administrator, the Paying Agent or the Note Registrar to rely
upon the truth and accuracy of any statement or opinion contained in any such document as provided
in Article VI.



     SECTION 11.3 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. Except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to the Indenture Trustee and, if
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 6.1) 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.



54









 





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



     (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by
any Noteholder shall bind the Noteholder 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 11.4 Notices, etc., to the Indenture Trustee, the Securities Administrator, the
Issuer and the Rating Agencies.



     (a) Any request, demand, authorization, direction, notice, consent, waiver or Act of any
Noteholders or other documents provided or permitted by this Indenture shall be in writing. If
such request, demand, authorization, direction, notice, consent, waiver or Act of any Noteholders
is to be made upon, given or furnished to or filed with:




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




     (iii) the Issuer by the Indenture Trustee, by the Securities Administrator or by any
Noteholder, it 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.



     (b) Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee,
the Securities 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 11.5 Notices to Noteholders; Waiver.



     Where this Indenture provides for notice to Noteholders of any event, such notice shall be in
writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at such
Noteholder’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.



55









 





     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 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.



     If it shall be impractical to mail notice of any event of Noteholders due to suspension of
regular mail service as a result of a strike, work stoppage or similar activity, any manner of
giving such notice that is satisfactory to the Indenture Trustee shall be deemed to be sufficient.



     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 an Indenture Default or Indenture Event of Default.



     SECTION 11.6 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 11.7 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 11.8 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 11.9 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 and the Noteholders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.



56









 






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



     SECTION 11.11 Legal Holidays.



     If the date on which any payment is due is not a Business Day, 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 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, the Master Servicer, the Note Registrar, the Paying Agent, the
Securities Administrator 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, the Note Registrar, the Paying Agent, the Securities Administrator 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, the Securities Administrator, the Master Servicer, the Note Registrar, the
Paying Agent, or the Owner Trustee in its respective individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee, the Note Registrar, the Paying Agent, the
Securities Administrator or the Indenture Trustee or of any successor or assign of the Indenture
Trustee, the Securities Administrator, the Note Registrar, the Paying Agent or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed (it being



57









 







understood that the Indenture Trustee, the Note Registrar, the Paying Agent, the Securities
Administrator 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
V, VI and VII of the Owner Trust Agreement.



     (b) In addition, (i) this Indenture is executed and delivered by Wilmington Trust Company, 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 Wilmington Trust Company but is made and intended
for the purpose for binding only the Trust, (iii) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, 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 Wilmington Trust Company 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 and the Securities Administrator, 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 or the Securities Administrator, 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 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 or the Securities Administrator 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 or the Securities Administrator may reasonably
determine that such disclosure is consistent with its obligations hereunder.



58









 





     IN WITNESS WHEREOF, the Issuer, the Securities 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.



	 	 	 	 	 	 	 	 	 
	 	 	FBR SECURITIZATION TRUST 2005-3, as Issuer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	WILMINGTON TRUST COMPANY, not in its individual

capacity but solely as Owner Trustee	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	     /s/ Janel R. Havrilla	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Janel R. Havrilla	 	 
	 

	 	 	 	 	 	Title: Senior Financial Services Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, as

Securities Administrator	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	     /s/ Sandra Whalen	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Sandra Whalen 
Title: Vice President	 	 
	 
	 

	 	 	 	 	 	HSBC BANK USA, NATIONAL ASSOCIATION, as
Indenture Trustee	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Elena Zheng	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Elena Zheng	 	 
	 

	 	 	 	 	 	Title: Assistant Vice President	 	 






[Indenture]





 










 








EXHIBIT A-1




FBR SECURITIZATION TRUST 2005-3

CALLABLE MORTGAGE-BACKED NOTES,

SERIES 2005-3




GLOBAL CLASS [__] 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 REPRESENTS A NON-RECOURSE OBLIGATION OF THE ISSUER AND WILL BE PAID SOLELY FROM THE
COLLATERAL SECURING THIS NOTE. THIS NOTE IS NOT INSURED OR GUARANTEED BY THE ISSUER, THE
DEPOSITOR, THE SELLER, THE ORIGINATOR, THE SERVICER, THE MASTER SERVICER, THE SECURITIES
ADMINISTRATOR, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE OR ANY AFFILIATE OF ANY OF THEM AND IS NOT
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR ANY OTHER PERSON.



     PAYMENT IN REDUCTION OF THE CLASS PRINCIPAL AMOUNT OF THIS NOTE MAY BE MONTHLY AS SET FORTH IN
THE INDENTURE REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.



     THIS NOTE OR ANY INTEREST THEREIN MAY NOT BE ACQUIRED UNLESS (i) THE PURCHASER OR TRANSFEREE
IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF ERISA OR
SECTION 4975 OF THE CODE OR A GOVERNMENTAL PLAN (AS DEFINED IN SECTION 3(32) OF ERISA) OR A CHURCH
PLAN (AS DEFINED IN SECTION 3(33) OF ERISA) OR OTHER EMPLOYEE BENEFIT PLAN OR ARRANGEMENT THAT IS
SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW (“SIMILAR LAW”) MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE (EACH, A “PLAN”) OR ANY PERSON WHO IS DIRECTLY OR INDIRECTLY
PURCHASING SUCH NOTE OR INTEREST THEREIN ON BEHALF OF, OR WITH “PLAN ASSETS” (AS DEFINED UNDER THE
DEPARTMENT OF LABOR REGULATION (THE “DOL REGULATIONS”) AT 29 C.F.R. SECTION 2510.3-101) OR
CORRESPONDING PROVISIONS OF SIMILAR LAW) OF A PLAN; OR (ii) THE ACQUISITION AND HOLDING OF THE NOTE
WILL NOT GIVE RISE TO A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA, THE CODE OR SIMILAR LAW.
EACH INVESTOR IN THIS NOTE WILL BE DEEMED BY



A-1-1









 




ACQUISITION OF SUCH NOTE OR INTEREST THEREIN TO MAKE THE FOREGOING REPRESENTATIONS IN (i) OR
(ii) ABOVE.




A-1-2









 








FBR SECURITIZATION TRUST 2005-3

CALLABLE MORTGAGE-BACKED NOTES,

SERIES 2005-3



GLOBAL CLASS [___] NOTES




	 	 	 
	Aggregate Class Principal Amount of

	 	Percentage Interest
	the Class [ — ] Notes: $[ — ]

	 	of this Note: [ — ]%
	 
	 	 
	Note Interest Rate: Adjustable

	 	Cut-off Date: October 1, 2005
	 
	 	 
	Number: [ — ]

	 	CUSIP No.: [ — ]






     FBR SECURITIZATION TRUST 2005-3, 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, the principal sum of [___]($[___]) payable
on each Payment Date pursuant to the Indenture, dated as of October 1, 2005 (as amended and
supplemented from time to time, the “Indenture”), among the Issuer, HSBC Bank USA, National
Association, as indenture trustee (the “Indenture Trustee”) and Wells Fargo Bank, National
Association, as securities administrator (the “Securities Administrator”); provided, however, that
the entire unpaid principal amount of this Note shall be due and payable on the Payment Date
occurring in October 2035 (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 October 1, 2005 (as amended and
supplemented from time to time, the “Transfer and Servicing Agreement”), by and among the Issuer,
the Indenture Trustee, FBR Securitization, Inc., as depositor (the “Depositor”), the Securities
Administrator, Clayton Fixed Income Services Inc. f/k/a The Murrayhill Company, as credit risk
manager, Wells Fargo Bank, National Association, as master servicer (the “Master Servicer”) and as
servicer, and MHC I, Inc., as the seller, which agreements also contain rules as to construction
that shall be applicable herein.



     On each Payment Date until the principal of this Note is paid or made available for payment in
full, the Issuer will pay interest on this Note at a per annum rate equal to the applicable Note
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).



     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 November 2005 (each,
a “Payment Date”), to the Person in whose name this Note is registered at the close of business on
the applicable 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 paid to all the Notes of the class of Notes
represented by this Note. All sums distributable on this Note are payable in the coin or currency
of the United States of America 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.



A-1-3









 





     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 Securities
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-1-4









 





     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.



	 	 	 	 	 
	 	 	FBR SECURITIZATION TRUST 2005-3
	 
	 	 	 	 
	 

	 	By:
	 	Wilmington Trust Company, solely as owner trustee and not
in its individual capacity
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory
	 
	 	 	 	 
	 	 	Dated: November [__], 2005






CERTIFICATE OF AUTHENTICATION




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



	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, solely as Securities
Administrator and not in its individual capacity	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	Dated: November [__], 2005	 	 






A-1-5









 






FBR SECURITIZATION TRUST 2005-3

CALLABLE MORTGAGE-BACKED NOTES,

SERIES 2005-3




     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 Noteholders 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 and the Transfer and Servicing Agreement.



     Payments to each Noteholder shall be made (i) by check mailed to the Person whose name appears
as the Registered Noteholder of this Note 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 prior to the related Record Date by the Noteholder of a Note having an initial
Class 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 Noteholder 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 Noteholder hereof or such Noteholder’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 Notes are subject to optional redemption and a clean-up call in accordance with the
Indenture and the Transfer and Servicing Agreement.



     No transfer of this Note or any interest herein to a Plan subject to ERISA, Section 4975 of
the Code or any Similar Law or any Person acting directly or indirectly on behalf of any such Plan
or any Person using Plan assets to acquire this Note shall be made except in accordance with
Section 2.03(a) of the Indenture.



A-1-6









 





     Each Noteholder, by acceptance of a Note or 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, the Securities Administrator 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, the Securities Administrator 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, the
Securities Administrator or the Owner Trustee in its individual capacity, any Noteholder of a
beneficial interest in the Issuer, the Owner Trustee, the Securities Administrator or the Indenture
Trustee or of any successor or assign of the Indenture Trustee, the Owner Trustee or the Securities
Administrator 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, by acceptance of a Note or a beneficial interest in a Note, covenants and
agrees by accepting the benefits of the Indenture that such Noteholder 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, by acceptance of a Note or a beneficial interest in a Note, consents to and
agrees to be bound by the terms and conditions of the Indenture and the Transfer and Servicing
Agreement.



     The Issuer has entered into the Indenture and this Note is issued with the intention that, for
federal, state and local income, and franchise tax purposes, the Notes will qualify as indebtedness
of the Issuer secured by the Trust Fund. Each Noteholder, by acceptance of a Note or 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 Retained Note shall not be treated as issued and outstanding
indebtedness for federal income tax purposes).



     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 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 Noteholders of the Notes under the Indenture at any time by the Depositor, the Issuer
and the Indenture Trustee with the consent of the Noteholders representing not less



A-1-7









 







than 66-2/3% of the then-outstanding Notes by aggregate Class Principal Amount 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 Noteholder of this Note shall be conclusive and binding upon such Noteholder and upon all
future Noteholders 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
Noteholders 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 Securities Administrator 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 Noteholder 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 Noteholder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, 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-1-8









 





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-1-9









 








EXHIBIT A-2




FBR SECURITIZATION TRUST 2005-3

CALLABLE MORTGAGE-BACKED NOTES,

SERIES 2005-3




GLOBAL CLASS [N-1] [N-2] 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 HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES
THAT THIS NOTE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A)(1) PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER, WHOM THE HOLDER HAS INFORMED THAT THE REOFFER, RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES. BEFORE ANY INTEREST IN A CERTIFICATED NOTE MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, THE TRANSFEREE (OTHER THAN BY AN AFFILIATE OF THE ISSUER)
WILL BE REQUIRED TO PROVIDE THE INDENTURE TRUSTEE WITH AN INVESTMENT REPRESENTATION LETTER IN THE
FORM ATTACHED TO THE INDENTURE. EACH TRANSFEREE OF A BENEFICIAL INTEREST HEREIN SHALL BE DEEMED TO
MAKE THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SUCH INVESTMENT REPRESENTATION LETTER.



THIS NOTE OR ANY INTEREST HEREIN MAY NOT BE ACQUIRED UNLESS (I) THE PURCHASER OR TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN OR RETIREMENT ARRANGEMENT THAT IS SUBJECT TO TITLE I OF 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 A GOVERNMENTAL PLAN (AS DEFINED IN
SECTION 3(32) OF ERISA), OR A
CHURCH PLAN (AS DEFINED IN






A-2-1









 







SECTION 3(33) OF ERISA) THAT IS SUBJECT TO ANY FEDERAL, STATE OR LOCAL
LAW (“SIMILAR LAW”) WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (EACH, A “PLAN”) OR ANY PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF
ANY SUCH PLAN OR (II) THE ACQUISITION AND HOLDING OF THE CLASS N NOTES OR ANY INTERESTS THEREIN
WILL NOT GIVE RISE TO A NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA, THE CODE OR SIMILAR LAW.
ANY PURCHASER OR TRANSFEREE OF THE NOTE OR A BENEFICIAL INTEREST IN THE NOTE THAT IS A BOOK ENTRY
NOTE WILL BE DEEMED TO REPRESENT THAT CLAUSE (I) OR (II) APPLIES BY VIRTUE OF ITS ACQUISITION OF
SUCH NOTE.



EACH NOTEHOLDER, BY ACCEPTANCE OF THIS NOTE OR, IN THE CASE OF A NOTE OWNER, A BENEFICIAL INTEREST
IN THIS NOTE, COVENANTS AND AGREES THAT 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, RECEIVERSHIP OR LIQUIDATION PROCEEDING OR OTHER PROCEEDINGS UNDER ANY
UNITED STATES FEDERAL OR STATE BANKRUPTCY OR SIMILAR LAW IN CONNECTION WITH ANY OBLIGATIONS
RELATING TO THE NOTES OR THE INDENTURE.



THIS NOTE REPRESENTS A NON-RECOURSE OBLIGATION OF THE ISSUER AND WILL BE PAID SOLELY FROM THE
COLLATERAL SECURING THIS NOTE. THIS NOTE IS NOT INSURED OR GUARANTEED BY THE ISSUER, THE DEPOSITOR,
THE SELLER, THE ORIGINATOR, THE SERVICER, THE MASTER SERVICER, THE SECURITIES ADMINISTRATOR, THE
INDENTURE TRUSTEE, THE OWNER TRUSTEE OR ANY AFFILIATE OF ANY OF THEM AND IS NOT INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR BY ANY OTHER PERSON.



PAYMENTS IN REDUCTION OF THE CLASS PRINCIPAL AMOUNT OF THIS NOTE MAY BE MADE MONTHLY AS SET FORTH
IN THE INDENTURE REFERRED TO HEREIN. ACCORDINGLY, THE OUTSTANDING NOTE BALANCE HEREOF AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.




A-2-2









 








FBR SECURITIZATION TRUST 2005-3

CALLABLE MORTGAGE-BACKED NOTES, SERIES 2005-3

GLOBAL CLASS [N-1] [N-2] NOTES




	 	 	 
	Aggregate Class Principal Amount as of
the Closing Date: $[ ]

	 	Percentage Interest of this
Note:                     
	 
	 	 
	Note Interest Rate:                      % per annum

	 	Cut-off Date: October 1, 2005
	 
	 	 
	 

	 	CUSIP:                     
	 
	 	 
	Number.                     
	 	 






     FBR SECURITIZATION TRUST 2005-3, 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, the principal sum of [___] Dollars ($[ ]) payable on
each Payment Date pursuant to the Indenture, dated as of October 1, 2005 (as amended and
supplemented from time to time, the “Indenture”), among the Issuer, HSBC Bank USA, National
Association, as indenture trustee (the “Indenture Trustee”) and Wells Fargo Bank, National
Association, as securities administrator (the “Securities Administrator”); provided, however, that
the entire unpaid principal amount of this Note shall be due and payable on the Payment Date
occurring in October 2035 (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 October 1, 2005 (as amended and
supplemented from time to time, the “Transfer and Servicing Agreement”), by and among the Issuer,
the Indenture Trustee, FBR Securitization, Inc., as depositor (the “Depositor”), the Securities
Administrator, Clayton Fixed Income Services Inc. f/k/a The Murrayhill Company, as credit risk
manager, Wells Fargo Bank, National Association, as master servicer (the “Master Servicer”) and as
servicer, and MHC I, Inc., as the seller, which agreements also contain rules as to construction
that shall be applicable herein.



     On each Payment Date until the principal of this Note is paid or made available for payment in
full, the Issuer will pay interest on this Note at a per annum rate equal to the applicable Note
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)
        .



     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 November 2005 (each,
a “Payment Date”), to the Person in whose name this Note is registered at the close of business on
the applicable 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 paid to all the Notes of the class of Notes
represented by this Note. All sums distributable on this Note are payable in the coin or currency
of the United States of America which at the time of payment is legal tender for



A-2-3









 







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.



     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 Securities
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-2-4









 





     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.



	 	 	 	 	 	 	 
	 	 	FBR SECURITIZATION TRUST 2005-3	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Wilmington Trust Company, solely as owner trustee and not
in its individual capacity	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	Dated: November [__], 2005	 	 






CERTIFICATE OF AUTHENTICATION




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



	 	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, solely as Securities
Administrator and not in its individual capacity	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	Dated: November [__], 2005	 	 






A-2-5









 






FBR SECURITIZATION TRUST 2005-3

CALLABLE MORTGAGE-BACKED NOTES,

SERIES 2005-3




     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 Noteholders 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 and the Transfer and Servicing Agreement.



     Payments to each Noteholder shall be made (i) by check mailed to the Person whose name appears
as the Registered Noteholder of this Note 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 prior to the related Record Date by the Noteholder of a Note having an initial
Class 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 Noteholder 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 Noteholder hereof or such Noteholder’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.



     No transfer, sale, pledge or other disposition of this Note or interest herein shall be made
unless that transfer, sale, pledge or other disposition is exempt from the registration and/or
qualification requirements of the Securities Act and any applicable state securities laws, or is
otherwise made in accordance with the Securities Act and such state securities laws. If a transfer
of this Note is to be made without registration under the Securities Act (other than in connection
with the initial issuance thereof or a transfer thereof by the Depositor or one of its Affiliates),
then the Note Registrar shall refuse to register such transfer unless it receives (and upon
receipt, may conclusively rely upon) a certificate from the Noteholder desiring to effect such
transfer



A-2-6









 







substantially in the form attached as Exhibit C-1 to the Indenture (which in the case
of Book-Entry Notes, the Note Owner will be deemed to have represented such certification) and a
certificate from such Noteholder’s prospective transferee substantially in the form attached as
Exhibit C-2 to the Indenture (which in the case of the Book-Entry Notes, the Note Owner’s
prospective transferee will be deemed to have represented such certification). None of the Issuer,
the Depositor, the Indenture Trustee or the Note Registrar is obligated to register or qualify any
Notes under the Securities Act or any other securities law or to take any action not otherwise
required under this Indenture to permit the transfer of any Note or interest therein without
registration or qualification. Any Noteholder desiring to effect a transfer of Notes or interests
therein shall, and does hereby agree to, indemnify the Issuer, the Depositor, the Securities
Administrator, the Owner Trustee, the Indenture Trustee and the Note Registrar against any
liability that may result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.



     No transfer of this Note or any interest herein to a Plan subject to ERISA, Section 4975 of
the Code or any Similar Law or any Person acting directly or indirectly on behalf of any such Plan
or any Person using Plan assets to acquire this Note shall be made except in accordance with
Section 2.03(a) of the Indenture.



     The Notes are subject to optional redemption and a clean-up call in accordance with the
Indenture and the Transfer and Servicing Agreement.



     Each Noteholder, by acceptance of a Note or 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, the Securities Administrator 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, the Securities Administrator 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, the
Securities Administrator or the Owner Trustee in its individual capacity, any Noteholder of a
beneficial interest in the Issuer, the Owner Trustee, the Securities Administrator or the Indenture
Trustee or of any successor or assign of the Indenture Trustee, the Owner Trustee or the Securities
Administrator 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, by acceptance of a Note or a beneficial interest in a Note, covenants and
agrees by accepting the benefits of the Indenture that such Noteholder 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, by acceptance of a Note or a beneficial interest in a Note, consents to and
agrees to be bound by the terms and conditions of the Indenture and the Transfer and Servicing
Agreement.



A-2-7









 





     The Issuer has entered into the Indenture and this Note is issued with the intention that, for
federal, state and local income and franchise tax purposes, the Notes will be debt. Each
Noteholder, by acceptance of a Note or a beneficial interest in a Note, agrees to treat the Notes
for all federal, state and local income tax purposes as debt (except that any Retained Note shall
not be treated as issued and outstanding indebtedness for federal income tax purposes).



     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 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 Noteholders of the Notes under the Indenture at any time by the Depositor, the Issuer
and the Indenture Trustee with the consent of the Noteholders representing not less than 66-2/3% of
the then-outstanding Notes by aggregate Class Principal Amount 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
Noteholder of this Note shall be conclusive and binding upon such Noteholder and upon all future
Noteholders 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
Noteholders 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.



A-2-8









 





     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
Noteholder 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 Noteholder shall
have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided,
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-2-9









 





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-2-10









 








EXHIBIT B



FORM OF ERISA TRANSFER AFFIDAVIT




	 	 	 	 	 
	 

	 	 	 	 
	 
	 	 
	 	date






	 	 	 	 	 
	STATE OF NEW YORK

	 	 	)	 
	 

	 	 	) ss.:
	 
	COUNTY OF NEW YORK

	 	 	)	 







			
	     Re:	 	FBR SECURITIZATION TRUST 2005-3

Callable Mortgage-Backed Notes, Series 2005-3








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



     2. The Investor hereby confirms (i) it is not an employee benefit plan or other plan or
arrangement subject to Title I of ERISA or Section 4975 of the Code or a governmental plan (as
defined in Section 3(32) of ERISA) or a church plan (as defined in Section 3(33) of ERISA) or other
employee benefit plan or arrangement that is subject to any federal, state or local law (“Similar
Law”) materially similar to the foregoing provisions of ERISA or the Code (each, a “Plan”), or any
Person who is directly or indirectly purchasing such Note or interest therein on behalf of, or with
“plan assets” (as defined under the Department of Labor Regulation (the “DOL Regulations”) at 29
C.F.R. Section 2510.3-101) or corresponding provisions of Similar Law) of a Plan; or (ii) the
acquisition and holding of the Note or any interest therein will not give rise to a nonexempt
prohibited transaction under ERISA, the Code or Similar Law.



     3. The Investor hereby acknowledges that under the terms of the Indenture, dated as of October
1, 2005, among FBR Securitization Trust 2005-3, as Issuer, Wells Fargo Bank, National Association,
as Securities Administrator, and HSBC Bank USA, National Association, as Indenture Trustee, 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.



     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:	 	 






B-1









 





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     .	 	 






B-2









 






EXHIBIT C-1




FORM OF TRANSFEROR CERTIFICATE




FOR TRANSFERS OF THE NOTES



[DATE]



[NOTE REGISTRAR]




     Re: FBR Securitization Trust 2005-3 Notes ( the “Notes”)


Ladies and Gentlemen:




     In connection with the sale by ___(the “Transferor”) to ___
(the “Transferee”) of the Notes having an initial aggregate Note Balance as of November 9, 2005
(the “Closing Date”) of $___(the “Transferred Notes”). The Notes, including the
Transferred Notes, were issued pursuant to the Indenture, dated as of October 1, 2005 (the
“Indenture”), among FBR Securitization Trust 2005-3 (the “Issuer”), HSBC Bank USA, National
Association (the “Indenture Trustee”) and Wells Fargo Bank, National Association, as securities
administrator. All capitalized terms used but not otherwise defined herein shall have the
respective meanings set forth in the Indenture. The Transferor hereby certifies, represents and
warrants to you, as Note Registrar, and for the benefit of the Issuer, the Indenture Trustee and
the Transferee, that:




     1 The Transferor is the lawful owner of the Transferred Notes with the full right to
transfer such Notes free from any and all claims and encumbrances whatsoever.




     2 Neither the Transferor nor anyone acting on its behalf has (a) offered, transferred,
pledged, sold or otherwise disposed of any Note, any interest in any Note or any other
similar security to any person in any manner, (b) solicited any offer to buy or accept a
transfer, pledge or other disposition of any Note, any interest in any Note or any other
similar security from any person in any manner, (c) otherwise approached or negotiated with
respect to any Note, any interest in any Note or any other similar security with any person
in any manner, (d) made any general solicitation by means of general advertising or in any
other manner, or (e) taken any other action, which (in the case of any of the acts described
in clauses (a) through (e) hereof) would constitute a distribution of any Note under the
Securities Act of 1933, as amended (the “Securities Act”), or would render the disposition
of any Note a violation of Section 5 of the Securities Act or any state securities laws, or
would require registration or qualification of any Note pursuant to the Securities Act or
any state securities laws.




     3 The Transferor and any person acting on behalf of the Transferor in this matter
reasonably believe that the Transferee is a “qualified institutional buyer” as that term is
defined in Rule 144A (“Rule 144A”) under the Securities Act (a “Qualified Institutional
Buyer”) purchasing for its own account or for the account of a Qualified Institutional
Buyer. In determining whether the Transferee is a Qualified Institutional Buyer, the



C-1-1









 






Transferor and any person acting on behalf of the Transferor in this matter have relied
upon the following method(s) of establishing the Transferee’s ownership and
discretionary investments of securities (check one or more):





	___	 	(a) The Transferee’s most recent publicly available financial statements, which
statements present the information as of a date within 16 months preceding the date of
sale of the Transferred Note in the case of a U.S. purchaser and within 18 months
preceding such date of sale for a foreign purchaser; or
	 
	___	 	(b) The most recent publicly available information appearing in documents filed
by the Transferee with the Securities and Exchange Commission or another United States
federal, state, or local governmental agency or self-regulatory organization, or with a
foreign governmental agency or self-regulatory organization, which information is as of
a date within 16 months preceding the date of sale of the Transferred Note in the case
of a U.S. purchaser and within 18 months preceding such date of sale for a foreign
purchaser; or
	 
	___	 	(c) The most recent publicly available information appearing in a recognized
securities manual, which information is as of a date within 16 months preceding the
date of sale of the Transferred Note in the case of a U.S. purchaser and within 18
months preceding such date of sale for a foreign purchaser; or
	 
	___	 	(d) A certification by the chief financial officer, a person fulfilling an
equivalent function, or other executive officer of the Transferee, specifying the
amount of securities owned and invested on a discretionary basis by the Transferee as
of a specific date on or since the close of the Transferee’s most recent fiscal year,
or, in the case of a Transferee that is a member of a “family of investment companies”,
as that term is defined in Rule 144A, a certification by an executive officer of the
investment adviser specifying the amount of securities owned by the “family of
investment companies” as of a specific date on or since the close of the Transferee’s
most recent fiscal year.





     4 The Transferor and any person acting on behalf of the Transferor understand that in
determining the aggregate amount of securities owned and invested on a discretionary basis
by an entity for purposes of establishing whether such entity is a Qualified Institutional
Buyer:




	___	 	(a) the following instruments and interests shall be excluded: securities of
issuers that are affiliated with the Transferee; securities that are part of an unsold
allotment to or subscription by the Transferee, if the Transferee is a dealer;
securities of issuers that are part of the Transferee’s “family of investment
companies”, if the Transferee is a registered investment company; bank deposit notes
and certificates of deposit; loan participations; repurchase agreements; securities
owned but subject to a repurchase agreement; and currency, interest rate and commodity
swaps;




C-1-2









 






	___	 	(b) the aggregate value of the securities shall be the cost of such securities,
except where the entity reports its securities holdings in its financial statements on
the basis of their market value, and no current information with respect to the cost
of those securities has been published, in which case the securities may be valued
at market;
	 
	___	 	(c) securities owned by subsidiaries of the entity that are consolidated with
the entity in its financial statements prepared in accordance with generally accepted
accounting principles may be included if the investments of such subsidiaries are
managed under the direction of the entity, except that, unless the entity is a
reporting company under Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, securities owned by such subsidiaries may not be included if the entity itself
is a majority-owned subsidiary that would be included in the consolidated financial
statements of another enterprise.





     5 The Transferor or a person acting on its behalf has taken reasonable steps to ensure
that the Transferee is aware that the Transferor is relying on the exemption from the
provisions of Section 5 of the Securities Act provided by Rule 144A.



     6 The Transferor or a person acting on its behalf has furnished, or caused to be
furnished, to the Transferee all information regarding (a) the Transferred Notes and
payments thereon, (b) the nature and performance of the Underlying Certificates and the
Mortgage Loans, (c) the Indenture and the Trust Estate, and (d) any credit enhancement
mechanism associated with the Transferred Notes, that the Transferee has requested.



	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Transferor)	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 






C-1-3









 






EXHIBIT C-2




FORM OF TRANSFEREE CERTIFICATE

FOR TRANSFERS OF THE NOTES



[DATE]



[NOTE REGISTRAR]




     Re: FBR Securitization Trust 2005-3 Notes ( the “Notes”)


Ladies and Gentlemen:




     ___(the “Transferee”) intends to purchase from ___(the
“Transferor”) the Notes having an initial aggregate Note Balance as of November 9, 2005 (the
“Closing Date”) of $___(the “Transferred Notes”). The Notes, including the Transferred
Notes, were issued pursuant to the Indenture dated as of October 1, 2005 (the “Indenture”), among
FBR Securitization Trust 2005-3 (the “Issuer”), HSBC Bank USA, National Association as indenture
trustee (the “Indenture Trustee”), and Wells Fargo Bank, National Association, as securities
administrator. All capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Indenture. The Transferee hereby certifies, represents and warrants to you, as
Note Registrar, and for the benefit of the Issuer, the Indenture Trustee and the Transferor, that:




     1 If the Transferee is a “qualified institutional buyer” (a “Qualified Institutional
Buyer”) as that term is defined in Rule 144A (“Rule 144A”) under the Securities Act of 1933,
as amended (the “Securities Act”), and has completed one of the forms of certification to
that effect attached hereto as Annex 1 and Annex 2. The Transferee is aware that the sale to
it of the Transferred Notes is being made in reliance on Rule 144A. The Transferee is
acquiring the Transferred Notes for its own account or for the account of a Qualified
Institutional Buyer, and understands that such Transferred Notes may be resold, pledged or
transferred only (i) to a person reasonably believed to be a Qualified Institutional Buyer
that purchases for its own account or for the account of a Qualified Institutional Buyer to
whom notice is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the Securities Act.




     2 The Transferee has been furnished with all information regarding (a) the Transferred
Notes and payments thereon, (b) the nature and performance of the Underlying Certificates
and the Mortgage Loans, (c) the Indenture, and (d) any credit enhancement mechanism
associated with the Transferred Notes, that it has requested.




     3 The Transferee represents that either (a) or (b) is satisfied, as marked below:




	 	___	 	(a) it is not an employee benefit plan or arrangement that is subject to Title
I of ERISA or Section 4975 of the Code, or a governmental plan (as defined in Section
3(32) of ERISA)
or a church plan (as defined in Section 3(33) of ERISA)




C-2-1









 






	 		 	that is subject
to any federal, state or local law (“Similar Law”) materially similar
to the foregoing provisions of ERISA or the Code (each, a “Plan”), nor any Person
who is directly or indirectly purchasing such Note or interest therein on behalf of,
or with “plan assets” of a Plan; or
	 
	 	___	 	(b) the acquisition and holding of the Note or any interest herein will not
give rise to a nonexempt prohibited transaction under ERISA, the Code or Similar Law.





     Any Person acquiring or accepting the Note or interest in the Note that is a Book-Entry Note
will be deemed to represent that clause (a) or (b) applies by virtue of its acquisition or
acceptance of such Note or interest therein.



	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	 
	 	 	(Transferee)
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






C-2-2









 






ANNEX 1 TO EXHIBIT C-2




QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A



[for Transferees other than Registered Investment Companies]




     The undersigned hereby certifies as follows to [name of Transferor] (the “Transferor”) and
[name of Note Registrar], as Note Registrar, with respect to the Notes being transferred (the
“Transferred Notes”) as described in the Transferee Certificate to which this certification relates
and to which this certification is an Annex:



     1 As indicated below, the undersigned is the chief financial officer, a person
fulfilling an equivalent function, or other executive officer of the entity purchasing the
Transferred Notes (the “Transferee”).



     2 The Transferee is a “qualified institutional buyer” as that term is defined in Rule
144A under the Securities Act of 1933, as amended (“Rule 144A”), because (i) the Transferee
owned and/or invested on a discretionary basis $___in securities
(other than the excluded securities referred to below) as of the end of the Transferee’s
most recent fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Transferee satisfies the criteria in the category marked below.




	 	___	 	Corporation, etc. The Transferee is a corporation
(other than a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
	 
	 	___	 	Bank. The Transferee (a) is a national bank or a
banking institution organized under the laws of any State, U.S. territory or
the District of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto, as of a date
not more than 16 months preceding the date of sale of the Note in the case of a
U.S. bank, and not more than 18 months preceding such date of sale for a
foreign bank or equivalent institution.
	 
	 	___	 	Savings and Loan. The Transferee (a) is a savings and
loan association, building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined by a State
or Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto, as of a




C-2-3









 






	 	 	 	date not more than 16 months preceding the date of sale of the Note in the
case of a U.S. savings and loan association, and not more than 18 months
preceding such date of sale for a foreign savings and loan association or
equivalent institution.
	 
	 	___	 	Broker-dealer. The Transferee is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934, as amended.
	 
	 	___	 	Insurance Company. The Transferee is an insurance
company whose primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a similar
official or agency of a State, U.S. territory or the District of Columbia.
	 
	 	___	 	State or Local Plan. The Transferee is a plan
established and maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political subdivisions, for the
benefit of its employees.
	 
	 	___	 	ERISA Plan. The Transferee is an employee benefit plan
within the meaning of Title I of the Employee Retirement Income Security Act of
1974.
	 
	 	___	 	Investment Advisor. The Transferee is an investment
advisor registered under the investment Advisers Act of 1940, as amended.
	 
	 	___	 	Other. (Please supply a brief description of the
entity and a cross-reference to the paragraph and subparagraph under subsection
(a)(1)
of Rule 144A pursuant to which it qualifies. Note that registered
investment companies should complete Annex 2 rather than this Annex 1.)
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 







     3 The term “securities” as used herein does not include (i) securities of issuers that
are affiliated with the Transferee, (ii) securities that are part of an unsold allotment to
or subscription by the Transferee, if the Transferee is a dealer, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Transferee, the Transferee did not include any of
the securities referred to in this paragraph.




     4 For purposes of determining the aggregate amount of securities owned and/or invested
on a discretionary basis by the Transferee, the Transferee used the cost of such securities
to the Transferee, unless the Transferee reports its securities holdings in its



C-2-4









 






financial statements on the basis of their market value, and no current information
with respect to the cost of those securities has been published, in which case the
securities were valued at market. Further, in determining such aggregate amount, the
Transferee may have included securities owned by subsidiaries of the Transferee, but only if
such subsidiaries are consolidated with the Transferee in its financial statements prepared
in accordance with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee’s direction. However, such securities were not
included if the Transferee is a majority-owned, consolidated subsidiary of another
enterprise and the Transferee is not itself a reporting company under the Securities
Exchange Act of 1934, as amended.




5 The Transferee acknowledges that it is familiar with Rule 144A and understands that
the Transferor and other parties related to the Transferred Notes are relying and will
continue to rely on the statements made herein because one or more sales to the Transferee
may be in reliance on Rule 144A.



	 	 	 	 	 	 	 
	 

	 	Yes
	 	No
	 	Will the Transferee be purchasing the Transferred Notes
only for the Transferee’s own account?







     6 If the answer to the foregoing question is “no”, then in each case where the
Transferee is purchasing for an account other than its own, such account belongs to a third
party that is itself a “qualified institutional buyer” within the meaning of Rule 144A, and
the “qualified institutional buyer” status of such third party has been established by the
Transferee through one or more of the appropriate methods contemplated by Rule 144A.




     7 The Transferee will notify each of the parties to which this certification is made of
any changes in the information and conclusions herein. Until such notice is given, the
Transferee’s purchase of the Transferred Notes will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Transferee is a bank or
savings and loan as provided above, the Transferee agrees that it will furnish to such
parties any updated annual financial statements that become available on or before the date
of such purchase, promptly after they become available.



	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Print Name of Transferee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 






C-2-5









 






ANNEX 2 to EXHIBIT C-2




QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A



[for Transferees that are Registered Investment Companies]



The undersigned hereby certifies as follows to [name of Transferor] (the “Transferor”) and [name of
Note Registrar], as Note Registrar, with respect to the Notes being transferred (the “Transferred
Notes”) as described in the Transferee Certificate to which this certification relates and to which
this certification is an Annex:





     1 As indicated below, the undersigned is the chief financial officer, a person
fulfilling an equivalent function, or other executive officer of the entity purchasing the
Transferred Certificates (the “Transferee”) or, if the Transferee is a “qualified
institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933,
as amended (“Rule 144A”), because the Transferee is part of a Family of Investment Companies
(as defined below), is an executive officer of the investment adviser (the “Adviser”).




     2 The Transferee is a “qualified institutional buyer” as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment Company Act of
1940, as amended, and (ii) as marked below, the Transferee alone owned and/or invested on a
discretionary basis, or the Transferee’s Family of Investment Companies owned, at least
$100,000,000 in securities (other than the excluded securities referred to below) as of the
end of the Transferee’s most recent fiscal year. For purposes of determining the amount of
securities owned by the Transferee or the Transferee’s Family of Investment Companies, the
cost of such securities was used, unless the Transferee or any member of the Transferee’s
Family of Investment Companies, as the case may be, reports its securities holdings in its
financial statements on the basis of their market value, and no current information with
respect to the cost of those securities has been published, in which case the securities of
such entity were valued at market.




	 	___	 	The Transferee owned and/or invested on a discretionary basis $___in
securities (other than the excluded securities referred to below) as of the end of the
Transferee’s most recent fiscal year (such amount being calculated in accordance with
Rule 144A).
	 
	 	___	 	The Transferee is part of a Family of Investment Companies which owned in the
aggregate $___in securities (other than the excluded securities referred to
below) as of the end of the Transferee’s most recent fiscal year (such amount being
calculated in accordance with Rule 144A).






     3 The term “Family of Investment Companies” as used herein means two or more registered
investment companies (or series thereof) that have the same investment adviser or investment
advisers that are affiliated (by virtue of being majority owned



C-2-6









 






subsidiaries of the same parent or because one investment adviser is a majority owned
subsidiary of the other).




     4 The term “securities” as used herein does not include (i) securities of issuers that
are affiliated with the Transferee or are part of the Transferee’s Family of Investment
Companies, (ii) bank deposit notes and certificates of deposit, (iii) loan participations,
(iv) repurchase agreements, (v) securities owned but subject to a repurchase agreement and
(vi) currency, interest rate and commodity swaps. For purposes of determining the aggregate
amount of securities owned and/or invested on a discretionary basis by the Transferee, or
owned by the Transferee’s Family of Investment Companies, the securities referred to in this
paragraph were excluded.




     5 The Transferee is familiar with Rule 144A and understands that the parties to which
this certification is being made are relying and will continue to rely on the statements
made herein because one or more sales to the Transferee will be in reliance on Rule 144A.



	 	 	 	 	 	 	 
	 

	 	 

Yes
	 	 

No
	 	Will the Transferee be purchasing the Transferred
Notes only for the Transferee’s own account?







     6 If the answer to the foregoing question is “no”, then in each case where the
Transferee is purchasing for an account other than its own, such account belongs to a third
party that is itself a “qualified institutional buyer” within the meaning of Rule 144A, and
the “qualified institutional buyer” status of such third party has been established by the
Transferee through one or more of the appropriate methods contemplated by Rule 144A.




     7 The undersigned will notify the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice, the Transferee’s
purchase of the Transferred Notes will constitute a reaffirmation of this certification by
the undersigned as of the date of such purchase.



	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Print Name of Transferee or Adviser	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	IF AN ADVISER:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Print Name of Transferee	 	 
	 
	 	 	 	 	 	 
	 

	 	Date	 	 	 	 







C-2-7