Document:

Exhibit 4.1

 

Execution
Copy

 

INDENTURE

 

among

 

FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES
2005-2,

 

Issuer

 

WELLS FARGO BANK, N.A.,

 

Trust Administrator

 

and

 

HSBC BANK USA, NATIONAL ASSOCIATION,

 

Indenture Trustee

 

 

Dated as of July 1, 2005

 

 

TABLE OF CONTENTS

 

	
  ARTICLE ONE

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Definitions

  	
   

  
	
  Section 1.02.

  	
  Incorporation by Reference of Trust
  Indenture Act

  	
   

  
	
  Section 1.03.

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  
	
   

  	
   

  	
   

  
	
  THE NOTES

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Form

  	
   

  
	
  Section 2.02.

  	
  Execution, Authentication and Delivery

  	
   

  
	
  Section 2.03.

  	
  Limitation on Transfer of Notes

  	
   

  
	
  Section 2.04.

  	
  Registration; Registration of Transfer and
  Exchange

  	
   

  
	
  Section 2.05.

  	
  Mutilated, Destroyed, Lost or Stolen Notes

  	
   

  
	
  Section 2.06.

  	
  Persons Deemed Owners

  	
   

  
	
  Section 2.07.

  	
  Payment of Principal and Interest

  	
   

  
	
  Section 2.08.

  	
  Cancellation

  	
   

  
	
  Section 2.09.

  	
  Release of Collateral

  	
   

  
	
  Section 2.10.

  	
  Book-Entry
  Notes

  	
   

  
	
  Section 2.11.

  	
  Notices to Clearing Agency

  	
   

  
	
  Section 2.12.

  	
  Definitive
  Notes

  	
   

  
	
  Section 2.13.

  	
  Tax
  Treatment

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  
	
   

  
	
  COVENANTS

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Payment of Principal and Interest

  	
   

  
	
  Section 3.02.

  	
  Maintenance of Office or Agency

  	
   

  
	
  Section 3.03.

  	
  Money for Payments to be Held in Trust

  	
   

  
	
  Section 3.04.

  	
  Existence

  	
   

  
	
  Section 3.05.

  	
  Protection of Collateral

  	
   

  
	
  Section 3.06.

  	
  Opinions as to Collateral

  	
   

  
	
  Section 3.07.

  	
  Performance of Obligations

  	
   

  
	
  Section 3.08.

  	
  Negative Covenants

  	
   

  
	
  Section 3.09.

  	
  Annual Statement as to Compliance

  	
   

  
	
  Section 3.10.

  	
  Treatment of Notes as Debt for Tax Purposes

  	
   

  
	
  Section 3.11.

  	
  [Reserved]

  	
   

  
	
  Section 3.12.

  	
  No Other Business

  	
   

  
	
  Section 3.13.

  	
  No Borrowing

  	
   

  
	
  Section 3.14.

  	
  [Reserved]

  	
   

  

 

 

	
  Section 3.15.

  	
  Guarantees, Loans, Advances and Other
  Liabilities

  	
   

  
	
  Section 3.16.

  	
  Capital Expenditures

  	
   

  
	
  Section 3.17.

  	
  Removal of Trust Administrator

  	
   

  
	
  Section 3.18.

  	
  Restricted Payments

  	
   

  
	
  Section 3.19.

  	
  Notice of Events of Default

  	
   

  
	
  Section 3.20.

  	
  Further Instruments and Acts

  	
   

  
	
  Section 3.21.

  	
  Covenants of the Issuer

  	
   

  
	
  Section 3.22.

  	
  Representations and Warranties of the
  Issuer

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  
	
   

  
	
  SATISFACTION
  AND DISCHARGE

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Satisfaction and Discharge of Indenture

  	
   

  
	
  Section 4.02.

  	
  Application of Trust Money

  	
   

  
	
  Section 4.03.

  	
  Repayment of Moneys Held by Paying Agent

  	
   

  
	
  Section 4.04.

  	
  Trust Money Received by Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  
	
   

  	
   

  	
   

  
	
  REMEDIES

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Events of Default

  	
   

  
	
  Section 5.02.

  	
  Acceleration of Maturity; Rescission and
  Annulment

  	
   

  
	
  Section 5.03.

  	
  Collection of Indebtedness and Suits for
  Enforcement by Indenture Trustee

  	
   

  
	
  Section 5.04.

  	
  Remedies; Priorities

  	
   

  
	
  Section 5.05.

  	
  Optional Preservation of the Collateral

  	
   

  
	
  Section 5.06.

  	
  Limitation of Suits

  	
   

  
	
  Section 5.07.

  	
  Unconditional Rights of Noteholders To
  Receive Principal and Interest

  	
   

  
	
  Section 5.08.

  	
  Restoration of Rights and Remedies

  	
   

  
	
  Section 5.09.

  	
  Rights and Remedies Cumulative

  	
   

  
	
  Section 5.10.

  	
  Delay or Omission Not a Waiver

  	
   

  
	
  Section 5.11.

  	
  Control by Noteholders

  	
   

  
	
  Section 5.12.

  	
  Waiver of Past Defaults

  	
   

  
	
  Section 5.13.

  	
  Undertaking for Costs

  	
   

  
	
  Section 5.14.

  	
  Waiver of Stay or Extension Laws

  	
   

  
	
  Section 5.15.

  	
  Action on Notes

  	
   

  
	
  Section 5.16.

  	
  Performance and Enforcement of Certain
  Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  
	
   

  	
   

  	
   

  
	
  THE INDENTURE TRUSTEE

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Duties of Indenture Trustee

  	
   

  
	
  Section 6.02.

  	
  Rights of Indenture Trustee

  	
   

  
	
  Section 6.03.

  	
  Individual Rights of Indenture Trustee

  	
   

  
	
  Section 6.04.

  	
  Indenture Trustee’s Disclaimer

  	
   

  

 

i

 

	
  Section 6.05.

  	
  Notice of Defaults

  	
   

  
	
  Section 6.06.

  	
  Reports by Indenture Trustee to Holders

  	
   

  
	
  Section 6.07.

  	
  Compensation and Indemnity

  	
   

  
	
  Section 6.08.

  	
  Replacement of Indenture Trustee

  	
   

  
	
  Section 6.09.

  	
  Successor Indenture Trustee by Merger

  	
   

  
	
  Section 6.10.

  	
  Appointment of Co-Indenture Trustee or
  Separate Indenture Trustee

  	
   

  
	
  Section 6.11.

  	
  Eligibility; Disqualification

  	
   

  
	
  Section 6.12.

  	
  Representations and Warranties

  	
   

  
	
  Section 6.13.

  	
  Preferential Collection of Claims Against Issuer

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  
	
   

  	
   

  	
   

  
	
  NOTEHOLDERS’
  LISTS AND REPORTS

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

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

  	
   

  
	
  Section 7.02.

  	
  Preservation of Information: Communications
  to Noteholders

  	
   

  
	
  Section 7.03.

  	
  Reports by Issuer

  	
   

  
	
  Section 7.04.

  	
  Reports by Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  
	
   

  	
   

  	
   

  
	
  ACCOUNTS,
  DISBURSEMENTS AND RELEASES

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Collection of Money

  	
   

  
	
  Section 8.02.

  	
  Collection Account

  	
   

  
	
  Section 8.03.

  	
  Release of Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  
	
   

  	
   

  	
   

  
	
  SUPPLEMENTAL INDENTURES

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Supplemental Indentures Without Consent of
  Noteholders

  	
   

  
	
  Section 9.02.

  	
  Supplemental Indentures with Consent of
  Noteholders

  	
   

  
	
  Section 9.03.

  	
  Execution of Supplemental Indentures

  	
   

  
	
  Section 9.04.

  	
  Effect of Supplemental Indenture

  	
   

  
	
  Section 9.05.

  	
  Conformity with Trust Indenture Act

  	
   

  
	
  Section 9.06.

  	
  Reference in Notes to Supplemental
  Indentures

  	
   

  
	
  Section 9.07.

  	
  Opinion of Counsel

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  
	
   

  	
   

  	
   

  
	
  REDEMPTION OF NOTES

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Redemption

  	
   

  
	
  Section 10.02.

  	
  Form of Redemption Notice

  	
   

  
	
  Section 10.03.

  	
  Notes Payable on Redemption Date

  	
   

  

 

(iii

 

	
  ARTICLE ELEVEN

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Compliance Certificates and Opinions, etc.

  	
   

  
	
  Section 11.02.

  	
  Form of Documents Delivered to
  Indenture Trustee

  	
   

  
	
  Section 11.03.

  	
  Acts of Noteholders

  	
   

  
	
  Section 11.04.

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

  	
   

  
	
  Section 11.05.

  	
  Notices to Noteholders; Waiver

  	
   

  
	
  Section 11.06.

  	
  Conflict with Trust Indenture Act

  	
   

  
	
  Section 11.07.

  	
  Effect of Headings and Table of Contents

  	
   

  
	
  Section 11.08.

  	
  Successors and Assigns

  	
   

  
	
  Section 11.09.

  	
  Severability

  	
   

  
	
  Section 11.10.

  	
  Benefits of Indenture and Consents of
  Noteholders

  	
   

  
	
  Section 11.11.

  	
  Legal Holidays

  	
   

  
	
  Section 11.12.

  	
  Governing Law

  	
   

  
	
  Section 11.13.

  	
  Counterparts

  	
   

  
	
  Section 11.14.

  	
  Recording of Indenture

  	
   

  
	
  Section 11.15.

  	
  Trust Obligations

  	
   

  
	
  Section 11.16.

  	
  No Petition

  	
   

  
	
  Section 11.17.

  	
  Inspection

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Forms of Notes

  	
   

  
	
  EXHIBIT B

  	
  [Reserved]

  	
   

  
	
  EXHIBIT C

  	
  Form of ERISA Transfer Affidavit

  	
   

  
				

 

(iv

 

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

 

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

 

GRANTING CLAUSE

 

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

 

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

 

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

 

 

ARTICLE ONE

DEFINITIONS AND
INCORPORATION BY REFERENCE

 

Section 1.01.                             Definitions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Clearstream:  Clearstream Banking Luxembourg, and any
successor thereto.

 

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

 

Commission:  The Securities and Exchange Commission.

 

2

 

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

 

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

 

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

 

Depository
Institution: 
Any depository institution or trust company, including the Indenture
Trustee, that (a) is incorporated under the laws of the United States of
America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has
outstanding unsecured commercial paper or other short-term unsecured debt
obligations that are rated in the highest rating category by each Rating
Agency, or is otherwise acceptable to each Rating Agency.

 

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

 

Event of
Default:  The
meaning specified in Section 5.01.

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Note Register:  The meaning specified in Section 2.04.

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Commission”
means the Securities and Exchange Commission.

 

“indenture
securities” means the Notes.

 

“indenture
security holder” means a Noteholder.

 

“indenture to
be qualified” means this Indenture.

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

(iii)                               “or” is not exclusive;

 

(iv)                              “including” means
including without limitation;

 

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

 

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

 

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

 

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

 

8

 

ARTICLE TWO

THE NOTES

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  Class

  	
   

  	
  Class Principal Amount

  	
   

  
	
  1-Al

  	
   

  	
  $

  	
  267,522,000

  	
   

  
	
  l-A2

  	
   

  	
  $

  	
  66,880,000

  	
   

  
	
  2-Al

  	
   

  	
  $

  	
  196,414,000

  	
   

  
	
  2-A2

  	
   

  	
  $

  	
  189,876,000

  	
   

  
	
  2-A3

  	
   

  	
  $

  	
  24,608,000

  	
   

  
	
  A-IO(1)

  	
   

  	
  $

  	
  435,000,000

  	
   

  
	
  Ml

  	
   

  	
  $

  	
  36,250,000

  	
   

  
	
  M2

  	
   

  	
  $

  	
  33,350,000

  	
   

  
	
  M3

  	
   

  	
  $

  	
  21,750,000

  	
   

  
	
  M4

  	
   

  	
  $

  	
  16,433,000

  	
   

  
	
  M5

  	
   

  	
  $

  	
  16,433,000

  	
   

  
	
  M6

  	
   

  	
  $

  	
  14,983,000

  	
   

  
	
  M7

  	
   

  	
  $

  	
  15,466,000

  	
   

  
	
  M8

  	
   

  	
  $

  	
  11,116,000

  	
   

  
	
  M9

  	
   

  	
  $

  	
  11,116,000

  	
   

  
	
  M10

  	
   

  	
  $

  	
  36,250,000

  	
   

  

 

9

 

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

 

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

 

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

 

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

 

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

 

10

 

Section 2.03.                             Limitation
on Transfer of Notes.

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

Section 2.07.                             Payment of Principal and Interest.

 

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

 

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

 

14

 

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

 

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

 

Section 2.09.                             Release
of Collateral.

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

ARTICLE THREE

 

COVENANTS

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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.

 

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

 

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

 

19

 

 

Section 3.04.          Existence.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

Section 3.07.          Performance
of Obligations.

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

Section 3.11.          [Reserved]

 

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

 

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

 

Section 3.14.          [Reserved].

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

ARTICLE FOUR

SATISFACTION AND DISCHARGE

 

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

 

(A)          either

 

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

 

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

 

(a)         have become due and payable,

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

ARTICLE FIVE

REMEDIES

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 5.04.          Remedies;
Priorities.

 

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

 

32

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

Section 5.16.          Performance and Enforcement of
Certain Obligations.

 

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

 

37

 

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

 

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

 

ARTICLE SIX

THE INDENTURE TRUSTEE

 

Section 6.01.          Duties
of Indenture Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

38

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

39

 

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

 

Section 6.02.          Rights
of Indenture Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

40

 

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

 

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

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

43

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

44

 

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

 

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

 

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

 

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

 

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

 

ARTICLE SEVEN

 

NOTEHOLDERS’ LISTS AND REPORTS

 

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

 

Section 7.02.          Preservation of Information:  Communications to Noteholders.

 

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

 

45

 

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

 

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

 

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

 

Section 7.03.          Reports
by Issuer.

 

(a)           The
Issuer shall:

 

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

 

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

 

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

 

46

 

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

 

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

 

ARTICLE EIGHT

ACCOUNTS, DISBURSEMENTS
AND RELEASES

 

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

 

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

 

Section 8.03.          Release
of Collateral.

 

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

 

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

 

47

 

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

 

ARTICLE NINE

SUPPLEMENTAL INDENTURES

 

Section 9.01.          Supplemental Indentures Without
Consent of Noteholders.

 

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

 

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

 

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

 

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

 

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

 

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

 

48

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

49

 

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

 

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

 

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

 

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

 

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

 

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

 

50

 

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

 

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

 

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

 

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

 

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

 

ARTICLE TEN

REDEMPTION OF NOTES

 

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

 

51

 

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

 

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

 

All notices of redemption shall state:

 

(i)            the
Redemption Date;

 

(ii)           the
Redemption Price; and

 

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

 

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

 

52

 

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

 

ARTICLE ELEVEN

MISCELLANEOUS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

53

 

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

 

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

 

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

 

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

 

Section 11.03.        Acts of
Noteholders.

 

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

 

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

 

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

 

54

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

56

 

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

 

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

 

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

 

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

 

Section 11.15.        Trust
Obligations.

 

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

 

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

 

57

 

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

 

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

 

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

 

58

 

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

 

	
   

  	
  FIELDSTONE MORTGAGE INVESTMENT

  TRUST, SERIES 2005-2, as Issuer

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  U.S. BANK TRUST
  NATIONAL

  ASSOCIATION, not in its individual

  capacity but solely as Owner Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Charles F. Pedersen

  	
   

  
	
   

  	
   

  	
  Name: Charles F. Pedersen

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

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

  individual capacity but solely as Trust

  Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Amy Doyle

  	
   

  
	
   

  	
   

  	
  Name: Amy Doyle

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC BANK USA,
  NATIONAL

  ASSOCIATION, not in its individual
  capacity but

  solely as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
    /s/ Elena Zheng

  	
   

  
	
   

  	
   

  	
  Name: Elena Zheng

  
	
   

  	
   

  	
  Title: Assistant Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
  Solely for purposes of Section 5.04,
  Section 9.01

  	
   

  
	
  and Section 9.02, accepted and agreed
  to by:

  	
   

  
	
   

  	
   

  
	
  MORGAN STANLEY
  CAPITAL SERVICES INC.,

  	
   

  
	
  as Swap Counterparty

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
    /s/ Nina C. Simmons

  	
   

  	
   

  
	
   

  	
   Name: 
  Nina C. Simmons

  	
   

  
	
   

  	
   Title:  Vice President

  	
   

  
										

 

[Signature Page to Fieldstone 2005-2 Indenture]

 

 

EXHIBIT A

 

FORMS OF NOTES

 

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

 

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

 

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

 

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

 

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

 

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

 

A-1

 

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

 

A-2

 

FIELDSTONE MORTGAGE INVESTMENT
TRUST, SERIES 2005-[  ]

 

CLASS NOTES

 

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

  	
   

  	
  [Class Principal Amount of this Note:
  $]

  
	
   

  	
   

  	
   

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

  	
   

  	
  [Class Notional Amount of this Note:
  $]

  
	
   

  	
   

  	
   

  
	
  Interest Rate: 

  	
   

  	
  Initial Cut-off Date: July 1, 2005

  
	
   

  	
   

  	
   

  
	
  Number:

  	
   

  	
  CUSIP No.:

  

 

A-3

 

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

 

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

 

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

 

A-4

 

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

 

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

 

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

 

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

 

A-5

 

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

 

	
   

  	
  FIELDSTONE MORTGAGE
  INVESTMENT

  TRUST, SERIES 2005-2

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  U.S. BANK TRUST
  NATIONAL

  ASSOCIATION, not in its individual

  capacity but solely as Owner Trustee under

  the Trust Agreement

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
  , 2005

  
						

 

TRUST ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
   

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

  individual capacity but solely as Trust

  Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
  , 2005

  
					

 

A-6

 

FIELDSTONE MORTGAGE INVESTMENT
TRUST, SERIES 2005-2

 

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

 

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

 

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

 

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

 

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

 

A-7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

A-8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

A-9

 

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

 

A-10

 

ASSIGNMENT

 

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

 

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

 

	
   

  
	
  (name and address of assignee)

  

 

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

 

	
  Dated:

  	
   

  	
  */

  	
   

  
	
   

  	
   

  
	
  Signature
  Guaranteed:

  	
   

  
	
   

  	
   

  
	
   

  	
  */

  	
   

  

 

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

 

A-11

 

EXHIBIT B

 

[RESERVED]

 

B-1

 

EXHIBIT C

 

FORM OF ERISA TRANSFER
AFFIDAVIT

 

 

	
   

  	
   

  
	
   

  	
  date

  

 

	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF NEW YORK

  	
  )

  

 

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

 

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

 

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

 

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

 

C-1

 

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

 

 

	
   

  	
   

  
	
   

  	
  [Investor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  STATE OF

  	
  )

  	
   

  	
   

  	
   

  
	
   

  	
  )

  	
  ss.:

  	
   

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  	
   

  	
   

  
						

 

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

 

Subscribed and sworn before me this      
day of            20  .

 

	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  
	
   

  	
   

  
	
   

  	
  My commission expires the

  
	
   

  	
   

  	
  day of 

  	
   

  	
  ,20

  	
   

  	
  .

  

 

C-2Exhibit 4.2

 

Execution Copy

 

 

AMENDED AND RESTATED TRUST AGREEMENT

 

 

among

 

 

FIELDSTONE MORTGAGE INVESTMENT CORPORATION,

as Depositor,

 

 

U.S. BANK TRUST NATIONAL ASSOCIATION,

as Owner Trustee

 

 

and

 

 

WELLS FARGO BANK, N.A.,

as Trust Administrator

 

 

Dated as of August 4, 2005

 

 

Fieldstone Mortgage Investment Trust, Series 2005-2

Mortgage-Backed Notes

 

 

TABLE OF CONTENTS

 

	
   

  	
  ARTICLE I

  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Definitions

  	
   

  
	
  Section 1.02.

  	
  Other
  Definitional Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE II

  ORGANIZATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Name

  	
   

  
	
  Section 2.02.

  	
  Office

  	
   

  
	
  Section 2.03.

  	
  Purpose and
  Powers

  	
   

  
	
  Section 2.04.

  	
  Appointment of
  the Owner Trustee

  	
   

  
	
  Section 2.05.

  	
  Initial Capital
  Contribution; Declaration of Trust

  	
   

  
	
  Section 2.06.

  	
  Issuance of
  Initial Certificates

  	
   

  
	
  Section 2.07.

  	
  Liability of the
  Ownership Certificate Holder

  	
   

  
	
  Section 2.08.

  	
  Situs of Trust

  	
   

  
	
  Section 2.09.

  	
  Title to Trust
  Property

  	
   

  
	
  Section 2.10.

  	
  Representations
  and Warranties of the Depositor

  	
   

  
	
  Section 2.11.

  	
  Tax Treatment

  	
   

  
	
  Section 2.12.

  	
  Investment
  Company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE III

  THE CERTIFICATES AND TRANSFERS OF INTERESTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  The Certificates

  	
   

  
	
  Section 3.02.

  	
  Execution,
  Authentication and Delivery of the Certificates

  	
   

  
	
  Section 3.03.

  	
  Registration of
  and Limitations on Transfers and Exchanges of the Certificates

  	
   

  
	
  Section 3.04.

  	
  Lost, Stolen,
  Mutilated or Destroyed Certificate

  	
   

  
	
  Section 3.05.

  	
  Persons Deemed
  Certificateholders

  	
   

  
	
  Section 3.06.

  	
  Access to List of
  Certificateholders’ Names and Addresses

  	
   

  
	
  Section 3.07.

  	
  [Reserved]

  	
   

  
	
  Section 3.08.

  	
  Maintenance of
  Office or Agency

  	
   

  
	
  Section 3.09.

  	
  Certificate
  Paying Agent

  	
   

  
	
  Section 3.10.

  	
  Initial
  Beneficiary

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IV

  APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Collection
  Account

  	
   

  
	
  Section 4.02.

  	
  Application of
  Trust Funds

  	
   

  
	
  Section 4.03.

  	
  Method of Payment

  	
   

  
	
  Section 4.04.

  	
  [Reserved]

  	
   

  
	
  Section 4.05.

  	
  Segregation of Moneys;
  No Interest

  	
   

  
				

 

i

 

	
   

  	
  ARTICLE V

  AUTHORITY AND DUTIES OF THE OWNER TRUSTEE; ACTION BY

  CERTIFICATEHOLDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  General Authority

  	
   

  
	
  Section 5.02.

  	
  General Duties

  	
   

  
	
  Section 5.03.

  	
  Action Upon
  Instruction

  	
   

  
	
  Section 5.04.

  	
  No Duties Except
  as Specified under Specified Documents or in Instructions

  	
   

  
	
  Section 5.05.

  	
  Restrictions

  	
   

  
	
  Section 5.06.

  	
  Prior Notice to
  the Certificateholders with Respect to Certain Matters

  	
   

  
	
  Section 5.07.

  	
  Action by the
  Holder with Respect to Bankruptcy

  	
   

  
	
  Section 5.08.

  	
  Restrictions on
  the Ownership Certificate Holder’s Power

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VI

  CONCERNING THE OWNER TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Acceptance of
  Trusts and Duties

  	
   

  
	
  Section 6.02.

  	
  Furnishing of
  Documents

  	
   

  
	
  Section 6.03.

  	
  Books and Records

  	
   

  
	
  Section 6.04.

  	
  Representations
  and Warranties

  	
   

  
	
  Section 6.05.

  	
  Reliance; Advice
  of Counsel

  	
   

  
	
  Section 6.06.

  	
  Not Acting in
  Individual Capacity

  	
   

  
	
  Section 6.07.

  	
  Owner Trustee Not
  Liable for Certificates or Collateral

  	
   

  
	
  Section 6.08.

  	
  Owner Trustee May Own
  Notes

  	
   

  
	
  Section 6.09.

  	
  Licenses

  	
   

  
	
  Section 6.10.

  	
  Doing Business in
  Other Jurisdictions

  	
   

  
	
  Section 6.11.

  	
  Sarbanes-Oxley
  Act Certification

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VII

  INDEMNIFICATION AND COMPENSATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Trust Expenses

  	
   

  
	
  Section 7.02.

  	
  Indemnification

  	
   

  
	
  Section 7.03.

  	
  Compensation

  	
   

  
	
  Section 7.04.

  	
  Lien on Trust
  Estate

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE VIII

  TERMINATION OF AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Termination of
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE IX

  SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Eligibility
  Requirements for Owner Trustee

  	
   

  
	
  Section 9.02.

  	
  Resignation or
  Removal of Owner Trustee

  	
   

  
	
  Section 9.03.

  	
  Successor Owner
  Trustee

  	
   

  
	
  Section 9.04.

  	
  Merger or
  Consolidation of Owner Trustee

  	
   

  
				

 

ii

 

	
  Section 9.05.

  	
  Appointment of
  Co-Trustee or Separate Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE X

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Supplements and
  Amendments

  	
   

  
	
  Section 10.02.

  	
  No Legal Title to
  Trust Estate in Certificateholders

  	
   

  
	
  Section 10.03.

  	
  Pledge of
  Collateral by Owner Trustee is Binding

  	
   

  
	
  Section 10.04.

  	
  Limitations on
  Rights of Others

  	
   

  
	
  Section 10.05.

  	
  Notices

  	
   

  
	
  Section 10.06.

  	
  Severability

  	
   

  
	
  Section 10.07.

  	
  Separate
  Counterparts

  	
   

  
	
  Section 10.08.

  	
  Successors and
  Assigns

  	
   

  
	
  Section 10.09.

  	
  Headings

  	
   

  
	
  Section 10.10.

  	
  Governing Law

  	
   

  
	
  Section 10.11.

  	
  No Petition

  	
   

  
	
  Section 10.12.

  	
  No Recourse

  	
   

  
	
  Section 10.13.

  	
  Customer
  Identification

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ARTICLE XI

  OFFICERS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Appointment of
  Officers

  	
   

  
	
  Section 11.02.

  	
  Officers to
  Provide Information to the Owner Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Forms of Certificates

  	
   

  
	
  Exhibit B

  	
  [Reserved]

  	
   

  
	
  Exhibit C

  	
  Form of Certificate of Trust

  	
   

  
	
  Exhibit D-1

  	
  Form of Rule 144A Investment Letter

  	
   

  
	
  Exhibit D-2

  	
  Form of Non-Rule 144A Investment Letter

  	
   

  
	
  Exhibit E

  	
  Form of Certificate of Beneficial Owner

  	
   

  
	
  Exhibit F

  	
  Form of Representation and Warranty Regarding Transferee’s
  Status as a REIT or Qualified REIT Subsidiary

  	
   

  
				

 

iii

 

This TRUST AGREEMENT, dated as of August 4, 2005,
is by and among FIELDSTONE MORTGAGE INVESTMENT CORPORATION, a Maryland
corporation (the “Depositor”), U.S. BANK TRUST NATIONAL ASSOCIATION, a national
banking association, as Owner Trustee (the “Owner Trustee”), and WELLS FARGO
BANK, N.A., a national banking association, as Trust Administrator (the “Trust
Administrator”).

 

WHEREAS, pursuant to the Transfer and Servicing
Agreement, the Depositor intends to sell, transfer and assign to a Delaware
statutory trust created hereunder certain Mortgage Loans and related assets
(collectively, the “Collateral”), which statutory trust would then pledge such
Collateral under an indenture in order to secure the issuance of its
Mortgage-Backed Notes, Series 2005-2 (the “Securities”) and its
obligations under the Swap Agreement, the net proceeds of which would be
applied toward the purchase of the Collateral.

 

WHEREAS, the Depositor and the Owner Trustee entered
into a Trust Agreement dated July 26, 2005 (the “Original Trust Agreement”),
and filed with the Secretary of State of the State of Delaware a Certificate of
Trust on July 26, 2005, creating Fieldstone Mortgage Investment Trust, Series 2005-2
(the “Trust”).

 

WHEREAS, the Depositor, the Owner Trustee and the
Trust Administrator desire to enter into this Amended and Restated Trust
Agreement in order to amend and restate in its entirety the Original Trust
Agreement and to provide for the operation of the Trust upon the terms and
conditions more particularly set forth herein.

 

NOW THEREFORE, in consideration of the premises and
mutual agreements herein contained, the parties hereto hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.01.                             Definitions.  For all purposes of this Agreement, the
following terms shall have the meanings set forth below.

 

Actual Knowledge:  With respect to (i) the Owner Trustee,
any officer within the Corporate Trust Office of the Owner Trustee responsible
for administering the Trust hereunder, or under the Operative Agreements, who
has actual knowledge of an action taken or an action not taken with regard to
the Trust.  Actions taken or actions not
taken of which the Owner Trustee should have had knowledge, or has constructive
knowledge, do not meet the definition of Actual Knowledge hereunder.  With respect to the Trust Administrator, any
Responsible Officer of the Trust Administrator who has actual knowledge of an
action taken or an action not taken with regard to the Trust.  Actions taken or actions not taken of which
the Trust Administrator should have had knowledge, or has constructive
knowledge, do not meet the definition of Actual Knowledge hereunder.

 

Agreement or Trust Agreement:  This Amended and Restated Trust Agreement and
any amendments or modifications hereof.

 

Authorized Officer:  With respect to the Trust, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Trust and who is identified on

 

 

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

 

Bank:  U.S. Bank Trust National Association, in its
individual capacity and not as Owner Trustee under this Agreement.

 

Certificate:  Any Ownership Certificate issued pursuant to
this Agreement.

 

Certificate of Trust:  The Certificate of Trust to be filed by the
Owner Trustee for the Trust pursuant to Section 3810(a) of the
Delaware Trust Statute in the form of Exhibit C hereto.

 

Certificate Paying Agent:  Initially, the Trust Administrator, in its
capacity as Certificate Paying Agent, or any successor to the Trust
Administrator in such capacity.

 

Certificate Register:  The register maintained by the Certificate
Registrar in which the Certificate Registrar shall provide for the registration
of the Certificates and of transfers and exchanges of such Certificates.

 

Certificate Registrar:   Initially, the Trust Administrator, in its
capacity as Certificate Registrar, or any successor to the Trust Administrator
in such capacity.

 

Certificateholder or Holder:  The Person in whose name a Certificate is
registered in the Certificate Register.

 

Code:  The Internal Revenue Code of 1986, as
amended.

 

Collateral:  As defined in the Indenture.

 

Corporate Trust Office:  With respect to (i) the Owner Trustee,
the corporate trust administration office of the Owner Trustee located at U.S.
Bank Corporate Trust Services, 60 Livingston Avenue, St. Paul, Minnesota 55107,
or at such other address as the Owner Trustee may designate by notice to the
Trust Administrator, or the principal office of any successor Owner Trustee
(the address (which shall be in the State of Delaware) of which the successor
owner trustee will notify the Certificateholders); (ii) the Trust
Administrator, the principal corporate trust office of the Trust Administrator
at which, at any particular time, its corporate trust business shall be
administered, which office at the date hereof for purposes of transfers and
exchanges and for presentment and surrender of the Certificates and for payment
thereof is located at Wells Fargo Bank, N.A., Sixth Street and Marquette
Avenue, Minneapolis, Minnesota 55479, Attention:  Corporate Trust Group (Fieldstone 2005-2),
and for all other purposes is located at Wells Fargo Bank, N.A., P.O. Box
98, Columbia, Maryland 21046, Attention: 
Corporate Trust Group (Fieldstone 2005-2) (or for overnight deliveries,
at 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention:  Corporate Trust Group (Fieldstone 2005-2));
and

 

2

 

(iii) the
Certificate Registrar, the principal office of the Certificate Registrar at
which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Agreement is
located at the Corporate Trust Office of the Trust Administrator, or at such
other address as the Certificate Registrar may designate from time to time by
notice to the Securityholders and the Trust, or the principal corporate trust
office of any successor Certificate Registrar at the address designated by such
successor Certificate Registrar by notice to the Securityholders and the Trust.

 

Delaware Trust Statute:  Chapter 38 of Title 12 of the Delaware Code,
12 Del.C. Section 3801 et seq., as the
same may be amended from time to time.

 

Depositor:  Fieldstone Mortgage Investment Corporation, a
Maryland corporation.

 

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

 

Expenses:  The meaning specified in Section 7.02.

 

Indenture:  The indenture dated as of July 1, 2005,
between the Issuer and the Indenture Trustee, as such may be amended or
supplemented from time to time.

 

Indenture Trustee:  HSBC Bank USA, National Association, not in
its individual capacity but solely as Indenture Trustee, or any successor in
interest.

 

Initial Holder:  Fieldstone Mortgage Ownership Corp., or any
successor in interest, in the case of the Ownership Certificate.

 

Master Servicer:  Wells Fargo Bank, N.A., or any successor in
interest.

 

Net Proceeds from the Notes:  The proceeds received by the Trust from time
to time from the issuance and sale of its Notes, less the costs and expenses
incurred in connection with the issuance and sale of such Notes.

 

Non-U.S. Person:  Any person other than a “United States person”
as defined in Section 7701(a)(30) of the Code.

 

Note:  Any of the Class 1-A1, Class 1-A2, Class 2-A1,
Class 2-A2, Class 2-A3, Class A-IO, Class M1, Class M2,
Class M3, Class M4, Class M5, Class M6, Class M7, Class M8,
Class M9 or Class M10 Notes issued pursuant to the Indenture.

 

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

 

Officer:  Those officers of the Trust referred to in Article XI.

 

Opinion of Counsel:  One or more written opinions of counsel who
may, except as otherwise expressly provided in this Agreement, be employees of
or counsel to the Depositor and who shall be satisfactory to the Owner Trustee
and the Trust Administrator, which opinion shall be addressed to the Owner
Trustee, the Trust Administrator and each Swap Counterparty.

 

3

 

Original Trust Agreement:  As defined in the recitals hereof.

 

Ownership Certificate:  An equity certificate representing a 100%
undivided beneficial interest in the Trust in substantially the form annexed
hereto as part of Exhibit A.

 

Owner Trustee:  U.S. Bank Trust National Association, a
national banking association, and any successor in interest, not in its
individual capacity, but solely as owner trustee under the Trust Agreement.

 

Percentage Interest:  With respect to any Ownership Certificate,
the percentage set forth on the face thereof.

 

Proposer:  The Certificateholder making a written
request pursuant to Section 5.07.

 

Prospective Holder:  Each prospective purchaser and any subsequent
transferee of the Ownership Certificate.

 

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

 

REIT:  A real estate investment trust within the
meaning of Sections 856 and 857 of the Code.

 

Responsible Officer:  With respect to (i) the Owner Trustee,
any officer within the Corporate Trust Office of the Owner Trustee with direct
responsibility for the administration of the Trust and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer’s knowledge of, and familiarity with, the particular subject; and (ii) the
Trust Administrator, any officer within the Corporate Trust Office of the Trust
Administrator with direct responsibility for the administration of the Trust
and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer’s knowledge of, and familiarity
with, the particular subject.

 

Secretary of State:  The Secretary of State of the State of
Delaware.

 

Security:  Any of the Certificates or Notes.

 

Securityholder:  Any Certificateholder or Noteholder.

 

Seller:  Fieldstone Investment Corporation, a Maryland
corporation.

 

Transfer and Servicing Agreement:  The Transfer and Servicing Agreement dated as
of July 1, 2005, by and among the Trust, the Depositor, the Trust
Administrator, the Master Servicer, Fieldstone Servicing Corp., as servicer,
JPMorgan Chase Bank, National Association, as subservicer, the Seller and the
Indenture Trustee, as such may be amended or supplemented from time to time.

 

Trust:  The trust established pursuant to this
Agreement which shall carry on its business operations under the name of “Fieldstone
Mortgage Investment Trust, Series 2005-2.”

 

4

 

Trust Administrator:  Wells Fargo Bank, N.A., or any successor in
interest.

 

Section 1.02.                             Other
Definitional Provisions.

 

Capitalized terms used herein and not defined herein shall
have the same meanings assigned to them in the Transfer and Servicing Agreement
or in the Indenture, as applicable.

 

(a)                                  All
terms defined in this Agreement shall have the defined meanings when used in
any certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.

 

(b)                                 As
used in this Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document
to the extent not defined, shall have the respective meanings given to them
under generally accepted accounting principles. 
To the extent that the definitions of accounting terms in this Agreement
or in any such certificate or other document are inconsistent with the meanings
of such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.

 

(c)                                  The
words “hereof,” “herein,” “hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term “including” shall mean “including
without limitation.”

 

(d)                                 The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as the feminine
and neuter genders of such terms.

 

(e)                                  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.

 

ARTICLE II

ORGANIZATION

 

Section 2.01.                             Name.  The trust established under this Agreement
shall be referred to as “Fieldstone Mortgage Investment Trust, Series 2005-2,”
in which name the Owner Trustee and the Officers may conduct the activities
contemplated hereby, including the making and executing of contracts and other
instruments on behalf of the Trust and sue and be sued.

 

Section 2.02.                             Office.  The principal office of the Trust shall be in
care of the Owner Trustee, at its Corporate Trust Office.  The Trust shall also have an office in care
of the Trust Administrator at its Corporate Trust Office.

 

5

 

Section 2.03.                             Purpose
and Powers.  The Trust shall have the
power and authority to engage in any of the following activities:

 

(a)                                  to
issue the Notes pursuant to the Indenture and the Certificates pursuant to this
Agreement and to sell, transfer and exchange such Notes and Certificates;

 

(b)                                 with
the proceeds of the sale of the Notes and the Certificates, to pay the
organizational, start-up and transactional expenses of the Trust and to pay the
balance of the Net Proceeds from the Notes to the Depositor in consideration of
the transfer to the Trust of the Collateral;

 

(c)                                  to
assign, grant, transfer, pledge, mortgage and convey the Trust Estate pursuant
to the Indenture and to hold, manage and distribute to the Certificateholders
pursuant to the terms of the Transfer and Servicing Agreement any portion of
the Collateral released from the lien of, and remitted to the Trust pursuant
to, the Indenture;

 

(d)                                 to
enter into and perform its obligations under the Operative Agreements and the
Swap Agreement to which it is to be a party;

 

(e)                                  to
engage in those activities, including entering into agreements, that are
necessary, suitable or convenient to accomplish the foregoing or are incidental
thereto or connected therewith; and

 

(f)                                    subject
to compliance with the Operative Agreements, to engage in such other activities
as may be required in connection with conservation of the Trust Estate and the
making of distributions and payments to the Certificateholders and the
Noteholders.

 

The Trust is hereby authorized to engage in the
foregoing activities.  The Trust shall
not engage in any activity other than in connection with the foregoing or other
than as required or authorized by the terms of this Agreement or the Operative
Agreements.

 

Section 2.04.                             Appointment
of the Owner Trustee.  The Depositor
hereby appoints the Bank to act as owner trustee (the “Owner Trustee”) of the
Trust effective as of the date hereof to have all the rights, powers and duties
set forth herein with respect to accomplishing the purposes of the Trust.

 

The Owner Trustee is hereby authorized to execute this
Agreement, the Indenture, the Transfer and Servicing Agreement and any other
Operative Agreement on behalf of the Trust. 
The Owner Trustee is hereby authorized to take all actions required or
permitted to be taken by it in accordance with the terms of this Agreement.

 

Section 2.05.                             Initial
Capital Contribution; Declaration of Trust.

 

(a)                                  The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Trust,
as of the date hereof, the sum of $1. 
The Owner Trustee hereby acknowledges receipt in trust from the
Depositor, as of the Closing Date, of the foregoing contribution, which shall
constitute the initial corpus of the Trust Estate.  The Depositor shall pay organizational
expenses of the

 

6

 

Trust as they may arise or shall, upon the request of the Owner
Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the
Owner Trustee.

 

(b)                                 The
Owner Trustee hereby declares that it will hold the Trust Estate in trust upon
and subject to the conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the Operative
Agreements.  It is the intention of the
parties hereto that the Trust constitute a statutory trust under the Delaware
Trust Statute and that this Agreement constitute the governing instrument of
such statutory trust.  No later than the
Closing Date, the Owner Trustee shall cause the filing of the Certificate of
Trust with the Secretary of State. 
Except as otherwise provided in this Agreement, the rights of the
Certificateholders will be those of beneficial owners of the Trust.

 

Section 2.06.                             Issuance
of Initial Certificates.  Upon the
formation of the Trust by the initial contribution by the Depositor pursuant to
Section 2.05, the Owner Trustee will issue the Certificates to the Initial
Holders.

 

Section 2.07.                             Liability
of the Ownership Certificate Holder. 
The Ownership Certificate Holder shall be liable directly to and shall
indemnify any injured party for all losses, claims, damages, liabilities and
expenses of the Trust (including Expenses, to the extent not paid out of the
Trust Estate); provided, however, that the Ownership Certificate
Holder shall not be liable for payments required to be made to or for any
losses incurred by a Noteholder in the capacity of an investor in the
Notes.  In addition, any third party
creditors of the Trust (other than in connection with the obligations described
in the following sentence for which the Ownership Certificate Holder shall be
liable) shall be deemed third party beneficiaries of this paragraph.  The Ownership Certificate Holder shall be
liable for any entity level taxes imposed on the Trust.  The obligations of the Ownership Certificate Holder
under this paragraph shall be evidenced by the Ownership Certificate.

 

Section 2.08.                             Situs
of Trust.  The Trust will be located
in the State of Delaware.  All bank
accounts maintained by the Owner Trustee on behalf of the Trust shall be
located in the States of Delaware, New York or the jurisdiction where the Trust
Administrator maintains bank accounts with respect to collections on the
Collateral.  The only office of the Trust
will be as described in Section 2.02 hereof.  The Trust shall not have any employees; provided, however,
that nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware.  Payments will be received by the Trust only
in Delaware, New York, the jurisdiction in which the Trust Administrator
maintains the Collection Account or such other jurisdiction designated by the
Depositor, and payments will be made by the Trust only from the Collection
Account or from Delaware, New York or such other jurisdiction designated by the
Depositor.

 

Section 2.09.                             Title
to Trust Property.

 

(a)                                  Subject
to the Indenture, title to all of the Trust Estate shall be vested at all times
in the Trust as a separate legal entity until this Agreement terminates
pursuant to Article VIII hereof; provided,
however, that if the laws of any
jurisdiction require that title to any part of the Trust Estate be vested in
the trustee of the Trust, then title to that part of the Trust Estate shall be

 

7

 

deemed to be vested in the Owner Trustee or any co-trustee or separate
trustee, as the case may be, appointed pursuant to Article IX of this
Agreement.

 

(b)                                 The
Certificateholders shall have beneficial but not legal title to any part of the
Trust Estate.  No transfer by operation
of law or otherwise of any interest of the Certificateholders shall operate to
terminate this Agreement or the trusts created hereunder or entitle any
transferee to an accounting or to the transfer to it of any part of the Trust
Estate.

 

Section 2.10.                             Representations
and Warranties of the Depositor.  The
Depositor hereby represents and warrants to the Owner Trustee, the Swap
Counterparty and the Trust Administrator as of the Closing Date, as follows:

 

(a)                                  The
Depositor is duly organized and validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties are currently
owned and such business is presently conducted and had at all relevant times,
and now has, power, authority and the legal right to acquire and own the
Mortgage Loans.

 

(b)                                 The
Depositor is duly qualified to do business as a foreign corporation in good
standing and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business shall require such qualifications.

 

(c)                                  The
Depositor has the power and authority to execute and deliver any Operative
Agreement to which it is a party and to carry out its terms; the Depositor has
full power and authority to sell and assign the Collateral to be sold and
assigned to and deposited with the Trust and the Depositor has duly authorized
such assignment and deposit to the Trust by all necessary corporate action; and
the execution, delivery and performance of this Agreement or any other
Operative Agreement to which it is a party has been duly authorized by the
Depositor by all necessary corporate action and, assuming the due
authorization, execution and delivery of each such agreement by the other
parties thereto, each such agreement constitutes a valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance with its
terms, except as enforcement thereof may be subject to or limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
relating to or affecting creditors’ rights generally and by general equitable
principles.

 

(d)                                 The
consummation of the transactions contemplated by this Agreement and the fulfillment
of the terms hereof and thereof do not conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or without notice or
lapse of time) a default under, the certificate of incorporation or by-laws of
the Depositor, or any indenture, agreement or other instrument to which the
Depositor is a party or by which it is bound; nor result in the creation or
imposition of any lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to the
Operative Agreements); nor violate any law or, to the best of the Depositor’s
knowledge, any order, rule or regulation applicable to the Depositor of
any court or of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Depositor or
its properties.

 

8

 

(e)                                  There
are no proceedings or investigations, pending or, to the best knowledge of the
Depositor, threatened before any court, regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Depositor or
its properties:  (i) asserting the
invalidity of this Agreement or any other Operative Agreement to which the
Depositor is a party, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or any other Operative
Agreement to which the Depositor is a party or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement or any other Operative Agreement to which the
Depositor is a party.

 

(f)                                    The
representations and warranties of the Depositor made pursuant to the Transfer
and Servicing Agreement are true and correct.

 

(g)                                 This
Agreement is not required to be qualified under the Trust Indenture Act of
1939, as amended, and the Trust is not required to be registered as an “investment
company” under the Investment Company Act of 1940, as amended.

 

Section 2.11.                             Tax
Treatment.  The Depositor, the Owner
Trustee and the Initial Holder intend that the Trust be treated for federal
income tax purposes as a Qualified REIT Subsidiary and agree to take no action
inconsistent with such treatment.  The
Trust Administrator will perform the calculation of accrual of original issue
discount and the amortization of premium on the Securities.  The Seller will prepare and file the Trust’s
income tax returns and will make any other necessary tax filings under the
Code.

 

Section 2.12.                             Investment
Company.  Neither the Depositor nor
any holder of a Certificate shall take any action which would cause the Trust
to become an “investment company” which would be required to register under the
Investment Company Act of 1940, as amended.

 

ARTICLE III

THE CERTIFICATES AND TRANSFERS OF INTERESTS

 

Section 3.01.                             The
Certificates.  The Ownership
Certificate shall initially be issued as a single certificate in definitive,
fully registered form and shall initially be registered in the name of the
applicable Initial Holder.  No Ownership
Certificate shall be issued in authorized denominations of less than a 100%
Percentage Interest in such Certificate. 
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an Authorized Officer of the Owner Trustee and
authenticated in the manner provided in Section 3.02.  Each Certificate bearing the manual
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall be validly
issued and entitled to the benefit of this Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
authentication and delivery of each such Certificate or did not hold such
offices at the date of authentication and delivery of each such
Certificate.  A Person shall become a
Certificateholder and shall be entitled to the rights and subject to the obligations
of a Certificateholder hereunder upon such Person’s acceptance of a Certificate
duly registered in such Person’s name pursuant to Section 3.03.

 

9

 

Section 3.02.                             Execution,
Authentication and Delivery of the Certificates.  Concurrently with the sale of the Collateral
to the Trust pursuant to the Transfer and Servicing Agreement, the Owner
Trustee shall cause the Certificates issued hereunder to be executed and
authenticated on behalf of the Trust and authenticated and delivered to or upon
the written order of the Depositor, signed by its chairman of the board, its
president or any vice president, without further corporate action by the
Depositor.  No Certificate shall entitle
its Holder to any benefit under this Agreement or be valid for any purpose
unless there shall appear on such Certificate a certificate of authentication
substantially in the form set forth as part of Exhibit A hereto, executed
by the Owner Trustee or the Certificate Registrar, as the Owner Trustee’s
authenticating agent, by manual signature; such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated
and delivered hereunder.  All
Certificates shall be dated the date of their authentication.

 

Section 3.03.                             Registration
of and Limitations on Transfers and Exchanges of the Certificates.  The Certificate Registrar shall keep or cause
to be kept, at the office or agency maintained pursuant to Section 3.08, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Certificate Registrar shall provide for the registration of the
Certificates and of transfers and exchanges of the Certificates as set forth
herein; provided, however, that no Ownership Certificate
shall be issued in any such transfer and exchange representing less than a 100%
Percentage Interest in such Certificate, and provided,
further, that no Ownership
Certificate shall be issued in any such transfer and exchange except in
accordance with the provisions and conditions set forth below in this Section 3.03.  The Trust Administrator shall be the initial
Certificate Registrar.  If the
Certificate Registrar resigns or is removed, the Owner Trustee, with the
consent of the Depositor, shall appoint a successor Certificate Registrar.

 

Subject to satisfaction of the conditions set forth
below, upon surrender for registration of transfer of a Certificate at the
office or agency maintained pursuant to Section 3.08, the Owner Trustee
shall execute, authenticate and deliver (or cause the Trust Administrator as
its authenticating agent to authenticate and deliver), in the name of the
designated transferee, a new Certificate evidencing the Percentage Interest of
the Certificate so surrendered and dated the date of authentication by the
Owner Trustee or the Certificate Registrar.

 

Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by each Certificateholder or such
Certificateholder’s attorney duly authorized in writing.  Each Certificate surrendered for registration
of transfer or exchange shall be cancelled and subsequently disposed of by the
Certificate Registrar in accordance with its customary practice.

 

No service charge shall be made for any registration
of transfer or exchange of a Certificate, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer or
exchange of a Certificate or any other expense arising as a result of any
registration of transfer or exchange.

 

10

 

The preceding provisions of this Section notwithstanding,
the Owner Trustee shall not make and the Certificate Registrar shall not
register transfer or exchanges of a Certificate for a period of 15 days
preceding the due date for any payment with respect to such Certificate.

 

No transfer of a Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act and
any applicable state securities laws or is made in accordance with said Act and
laws.  Except in the case of an initial
transfer to an Initial Holder, in the event of any such transfer, the
Certificate Registrar or the Depositor shall prior to such transfer require the
transferee to execute (i) an investment letter (in the form attached
hereto as Exhibit D-1) certifying to the Trust, the Owner Trustee, the
Trust Administrator, the Certificate Registrar and the Depositor that such
transferee is a “qualified institutional buyer” under Rule 144A under the
Securities Act, or (ii) an investment letter (in the form attached hereto
as Exhibit D-2) certifying to the Trust, the Owner Trustee, the Trust
Administrator, the Certificate Registrar and the Depositor that such transferee
is an “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) of the Securities Act), and any expense associated with the
preparation and execution of any such investment letter shall not be an expense
of the Trust, the Owner Trustee, the Trust Administrator, the Certificate
Registrar or the Depositor.  A
Certificateholder desiring to effect the transfer of a Certificate shall, and
does hereby agree to, indemnify the Trust, the Owner Trustee, the Trust
Administrator, the Certificate Registrar and the Depositor against any and all
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

 

Except in the case of an initial transfer to an
Initial Holder, no transfer of a Certificate shall be made unless the
Certificate Registrar shall have received a representation letter (in the form
attached hereto as Exhibit D-1 or D-2) from the proposed transferee of
such Certificate to the effect that such proposed transferee is not an employee
benefit plan or other retirement arrangement subject to Section 406 of
ERISA, or Section 4975 of the Code or any substantially similar applicable
law, or a Person acting on behalf of or using the assets of any such plan,
which representation letter shall not be an expense of the Trust, the Owner
Trustee, the Trust Administrator, the Certificate Registrar or the Depositor.

 

Prior to and as a condition of the registration of any
transfer, sale or other disposition of the Ownership Certificate, each Initial
Holder of an Ownership Certificate and each Prospective Holder of an Ownership
Certificate shall represent and warrant in writing, in the case of each Initial
Holder, in substantially the form set forth in Exhibit E hereto, and in
the case of each Prospective Holder, in substantially the form set forth in Exhibit F
hereto, to the Owner Trustee, the Trust Administrator and the Certificate
Registrar and any of their respective successors that:

 

(i)                                     Such
Person is duly authorized to purchase the Ownership Certificate and its
purchase of investments having the characteristics of the Ownership Certificate
is authorized under, and not directly or indirectly in contravention of, any
law, charter, trust instrument or other operative document, investment
guidelines or list of permissible or impermissible investments that is
applicable to the investor;

 

(ii)                                  Such
Person understands that each holder of an Ownership Certificate, by virtue of
its acceptance thereof, assents to the terms, provisions and conditions of the
Agreement; and

 

11

 

(iii)                               Such
Person is a REIT, a Qualified REIT Subsidiary, or an entity that is disregarded
for federal income tax purposes that is wholly owned by a REIT or a Qualified
REIT Subsidiary.

 

Notwithstanding the forgoing, any Ownership
Certificate may be pledged to secure indebtedness and may be the subject of
repurchase agreements treated as secured indebtedness for federal income tax
purposes.

 

The Owner Trustee shall cause each Certificate to
contain a legend, substantially similar to the applicable legends provided in Exhibit A
hereto, stating that transfer of such Certificate is subject to certain
restrictions and referring prospective purchasers of the Certificates to this Section 3.03
with respect to such restrictions.

 

Section 3.04.                             Lost,
Stolen, Mutilated or Destroyed Certificate. 
If (a) a mutilated Certificate is surrendered to the Certificate
Registrar, or (b) the Certificate Registrar receives evidence to its
satisfaction that a Certificate has been destroyed, lost or stolen, and there
is delivered to the Certificate Registrar proof of ownership satisfactory to
the Certificate Registrar, together with such security or indemnity as required
by the Certificate Registrar and the Owner Trustee to save each of them
harmless, then in the absence of notice to the Certificate Registrar or the
Owner Trustee that such Certificate has been acquired by a protected purchaser,
the Owner Trustee shall execute on behalf of the Trust, and the Owner Trustee
or the Certificate Registrar shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest.  In connection with the issuance of any new
Certificate under this Section 3.04, the Owner Trustee or the Certificate
Registrar may require the payment of a sum sufficient to cover any expenses of
the Owner Trustee or the Certificate Registrar (including any fees and expenses
of counsel) and any tax or other governmental charge that may be imposed in
connection therewith.  Any duplicate
Certificate issued pursuant to this Section 3.04 shall constitute
conclusive evidence of ownership in the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any time.

 

Section 3.05.                             Persons
Deemed Certificateholders.  Prior to
due presentation of a Certificate for registration of transfer, the Owner
Trustee, the Certificate Registrar or any Certificate Paying Agent may treat
any Certificateholder as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 4.02 and for all other
purposes whatsoever, and none of the Trust, the Owner Trustee, the Certificate
Registrar or any Certificate Paying Agent shall be bound by any notice to the
contrary.

 

Section 3.06.                             Access
to List of Certificateholders’ Names and Addresses.  The Certificate Registrar shall furnish or
cause to be furnished to the Depositor or the Owner Trustee, within 15 days
after receipt by the Certificate Registrar of a written request therefor from
the Depositor or the Owner Trustee, in such form as the Depositor or the Owner
Trustee, as the case may be, may reasonably require, the name and address of
each Certificateholder as of the most recent Record Date.  A Certificateholder, by receiving and holding
a Certificate, shall be deemed to have agreed not to hold any of the Trust, the
Depositor, the Certificate Registrar and the Owner Trustee accountable or
liable for damages by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.

 

12

 

Section 3.07.                             [Reserved]

 

Section 3.08.                             Maintenance
of Office or Agency.  The Certificate
Registrar on behalf of the Trust, shall maintain an office or offices or agency
or agencies where the Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Owner Trustee
in respect of the Certificates and the Operative Agreements may be served.  The Certificate Registrar shall give the
Owner Trustee prompt notice, in writing, of any such notice or demand.  The Certificate Registrar initially
designates the Corporate Trust Office of the Trust Administrator as its office
for such purposes.  The Certificate
Registrar shall give prompt written notice to the Depositor, the Owner Trustee
and the Certificateholders of any change in the location of the Certificate
Register or any such office or agency.

 

Section 3.09.                             Certificate
Paying Agent.

 

(a)                                  The
Owner Trustee may appoint, and hereby appoints, the Trust Administrator as
Certificate Paying Agent under this Agreement. 
The Certificate Paying Agent shall make distributions to each
Certificateholder from the Collection Account pursuant to Section 4.02
hereof and Sections 5.08 and 6.02 of the Transfer and Servicing Agreement and,
upon request, shall report the amounts of such distributions to the Owner
Trustee.  The Certificate Paying Agent
shall have the revocable power to withdraw funds from the Collection Account
for the purpose of making the distributions referred to above.  The Trust Administrator hereby accepts such
appointment and further agrees that it will be bound by the provisions of this
Agreement and the Transfer and Servicing Agreement relating to the Certificate
Paying Agent and shall:

 

(i)                                     hold
all sums held by it for the payment of amounts due with respect to the
Certificates in trust for the benefit of the Person entitled thereto until such
sums shall be paid to such Person or otherwise disposed of as herein provided;

 

(ii)                                  give
the Owner Trustee notice of any default by the Trust of which a Responsible
Officer of the Trust Administrator has actual knowledge in the making of any
payment required to be made with respect to the Certificates;

 

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

 

(iv)                              immediately
resign as Certificate Paying Agent and forthwith pay to the Owner Trustee on
behalf of the Trust all sums held by it in trust for the payment of the
Certificates if at any time it ceases to meet the standards under this Section 3.09
required to be met by the Certificate Paying Agent at the time of its
appointment; and

 

(v)                                 not
institute bankruptcy proceedings against the Trust in connection with this
Agreement.

 

(b)                                 In
the event that the Trust Administrator shall no longer be the Certificate
Paying Agent hereunder, the Owner Trustee, with the consent of the Depositor,
shall appoint a successor to act as Certificate Paying Agent (which shall be a
bank or trust company).  The Owner
Trustee shall cause such successor Certificate Paying Agent or any additional
Certificate Paying Agent 

 

13

 

appointed by the Owner Trustee to execute and deliver to the Owner
Trustee an instrument in which such successor Certificate Paying Agent or
additional Certificate Paying Agent shall agree with the Owner Trustee that as
Certificate Paying Agent, such successor Certificate Paying Agent or additional
Certificate Paying Agent will hold all sums, if any, held by it for payment in
trust for the benefit of each Certificateholder entitled thereto until such
sums shall be paid to such Certificateholder. 
The Certificate Paying Agent shall return all unclaimed funds to the
Owner Trustee, and upon removal of a Certificate Paying Agent, such Certificate
Paying Agent shall also return all funds in its possession to the Owner Trustee.  The provisions of Sections 5.03, 5.04, 6.01,
6.05, 6.07, 6.08, 7.01 and 7.02 shall apply to the Trust Administrator also in
its role as Certificate Paying Agent for so long as the Trust Administrator
shall act as Certificate Paying Agent and, to the extent applicable, to any
other Certificate Paying Agent appointed hereunder.  Any reference in this Agreement to the
Certificate Paying Agent shall include any co-paying agent unless the context
requires otherwise.

 

Section 3.10.                             Initial
Beneficiary.  Upon the formation of
the Trust by the contribution by the Depositor pursuant to Section 2.05
and until the issuance of the Certificates, the Depositor shall be the sole
beneficiary of the Trust.

 

ARTICLE IV

APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

 

Section 4.01.                             Collection
Account.  All of the right, title and
interest of the Trust in all funds on deposit from time to time in the
Collection Account and in all proceeds thereof shall be held for the benefit of
each Certificateholder and such other persons entitled to payments
therefrom.  Except as otherwise expressly
provided herein or in the Transfer and Servicing Agreement, the Collection
Account shall be under the sole dominion and control of the Owner Trustee for
the benefit of the Certificateholders.

 

The Collection Account shall be subject to and
established and maintained in accordance with the applicable provisions of the
Transfer and Servicing Agreement and the Indenture, including, without
limitation, the provisions of Sections 5.08 and 6.02 of the Transfer and
Servicing Agreement regarding distributions from the Collection Account.

 

Section 4.02.                             Application
of Trust Funds.

 

(a)                                  On
each Payment Date, the Owner Trustee shall direct the Certificate Paying Agent
to distribute to each Certificateholder, from amounts on deposit in the
Collection Account, the distributions as provided in Sections 5.08 and 6.02 of
the Transfer and Servicing Agreement with respect to such Payment Date.  The Owner Trustee hereby directs the
Certificate Paying Agent to distribute on each Payment Date to each
Certificateholder amounts on deposit in the Collection Account in accordance
with Sections 5.08 and 6.02 of the Transfer and Servicing Agreement and the
Certificate Paying Agent hereby acknowledges such direction.

 

(b)                                 All
payments to be made under this Agreement by the Certificate Paying Agent shall
be made only from the income and proceeds, including Net Proceeds from the
Notes, of the Trust Estate and only to the extent that the Certificate Paying
Agent has received such income or proceeds. 
The Bank shall not be liable to any Certificateholder, the Indenture
Trustee or the

 

14

 

Trust Administrator for any amounts payable pursuant to this Section 4.02
except to the extent that non-payment is due to the Owner Trustee’s acts or
omissions amounting to willful misconduct or gross negligence.

 

(c)                                  Distributions
to any Certificateholder shall be subordinated to the creditors of the Trust,
including, without limitation, the Noteholders.

 

Section 4.03.                             Method
of Payment.  Subject to Section 8.01(c),
distributions required to be made to any Certificateholder on any Payment Date
as provided in Section 4.02 shall be made to the each Person who was a
Certificateholder on the preceding Record Date either by wire transfer, in
immediately available funds, to the account of each such Certificateholder at a
bank or other entity having appropriate facilities therefor, if such respective
Certificateholder shall have provided to the Certificate Registrar appropriate
written instructions at least five Business Days prior to such Payment Date or,
if not, by check mailed to each such Certificateholder at the respective
address of such Certificateholder appearing in the Certificate Register.

 

Section 4.04.                             [Reserved]

 

Section 4.05.                             Segregation
of Moneys; No Interest.  Moneys
received by or on behalf of the Owner Trustee hereunder and deposited into the
Collection Account will be segregated except to the extent required otherwise
by law or the provisions of the Transfer and Servicing Agreement.  The Owner Trustee shall not be liable for
payment of any interest in respect of such moneys.

 

ARTICLE V

AUTHORITY AND DUTIES OF THE OWNER TRUSTEE; ACTION BY CERTIFICATEHOLDERS

 

Section 5.01.                             General
Authority.  The Owner Trustee is
authorized and directed to execute and deliver the Notes, the Certificates, the
other Operative Agreements to which the Trust is to be a party, each
certificate or other document attached as an exhibit to or contemplated by the
Operative Agreements to which the Trust is to be a party and any amendment or
other agreement or instrument described herein, all as approved by the
Depositor, as evidenced conclusively by the Owner Trustee’s execution thereof,
and, on behalf of the Trust, to direct the Trust Administrator to authenticate
the Notes.  In addition to the foregoing,
the Owner Trustee is authorized, but shall not be obligated, to take all
actions required of the Trust pursuant to the Operative Agreements.

 

Section 5.02.                             General
Duties.

 

(a)                                  It
shall be the duty of the Owner Trustee to discharge (or cause to be discharged)
all of its responsibilities pursuant to the terms of this Agreement and the
other Operative Agreements to which the Trust is a party and to administer the
Trust in the interest of the Certificateholders, subject to the Operative
Agreements and in accordance with the provisions of this Agreement.  Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Operative Agreements to the extent the Trust
Administrator has agreed in the Transfer and Servicing Agreement or this
Agreement, respectively, to perform any act or to discharge any duty of the
Owner Trustee or the

 

15

 

Trust hereunder or under any Operative Agreement, and the Owner Trustee
shall not be held liable for the default or failure of the Trust Administrator
to carry out its obligations under the this Agreement or the Transfer and
Servicing Agreement or any other Operative Agreement, respectively; and

 

(b)                                 It
shall be the duty of the Depositor under the Transfer and Servicing Agreement
to obtain and preserve the Trust’s qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of the Indenture, the Notes, the Collateral and
each other instrument and agreement included in the Trust Estate.  It shall be the duty of the Owner Trustee to
cooperate with the Depositor with respect to such matters.

 

Section 5.03.                             Action
Upon Instruction.

 

(a)                                  Subject
to Article V and in accordance with the terms of the Operative Agreements,
the Ownership Certificate Holder may by written instruction direct the Owner
Trustee in the management of the Trust, but only to the extent consistent with
the limited purpose of the Trust.  Such
direction may be exercised at any time by written instruction of the Ownership
Certificate Holder pursuant to this Article V.

 

(b)                                 Notwithstanding
the foregoing, the Owner Trustee shall not be required to take any action
hereunder or under any Operative Agreement if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any Operative Agreement or is otherwise
contrary to law.

 

(c)                                  Whenever
the Owner Trustee is unable to decide between alternative courses of action
permitted or required by the terms of this Agreement or under any other
Operative Agreement, or in the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any other Operative Agreement
or any such provision is ambiguous as to its application, or is, or appears to
be, in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Ownership Certificate Holder requesting instruction as to the course of action
to be adopted, and to the extent the Owner Trustee acts in good faith in
accordance with any written instruction of the Ownership Certificate Holder,
the Owner Trustee shall not be liable on account of such action to any
Person.  If the Owner Trustee shall not
have received appropriate instruction within 10 days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or
may be necessary under the circumstances) it may, but shall be under no duty
to, take or refrain from taking such action not inconsistent with this
Agreement or any other Operative Agreement, as it shall deem to be in the best
interests of each Certificateholder, and the Owner Trustee shall have no
liability to any Person for such action or inaction.

 

Section 5.04.                             No
Duties Except as Specified under Specified Documents or in Instructions.  The Owner Trustee shall not have any duty or
obligation to manage, make any

 

16

 

payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee or the Trust is a party, except as expressly
provided (i) in accordance with the powers granted to and the authority
conferred upon the Owner Trustee pursuant to this Agreement, and (ii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 5.03; and no implied duties or obligations shall be
read into this Agreement or any Operative Agreement against the Owner
Trustee.  Without limiting the foregoing,
unless specifically enumerated in any Operative Agreement to which the Owner
Trustee is party, the Owner Trustee (i) shall have no duty or obligation
to execute, file or deliver, or cause the preparation, filing or delivery by
other persons of, any such documents, reports, filings, instruments,
certificates or opinions as it shall be the duty of the Trust to prepare, file
or deliver pursuant to the Operative Agreements, (ii) shall have no duty
or obligation to take, or refrain from taking, any action that is the duty or
the obligation of the Trust pursuant to the Operative Agreements and (iii) shall
have no duty or obligation to monitor the Trust’s duties and obligations
pursuant to the Operative Agreements nor ensure that such duties and
obligations are fulfilled by the Trust. 
The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
the Trust or to prepare or file any Securities and Exchange Commission filing
for the Trust or to record this Agreement or any Operative Agreement or to
prepare or file any tax return for the Trust. 
The Owner Trustee nevertheless agrees that it will, at its own cost and
expense, promptly take all action as may be necessary to discharge any liens on
any part of the Trust Estate that result from actions by, or claims against the
Bank that are not related to the ownership or the administration of the Trust
Estate.

 

Section 5.05.                             Restrictions.

 

(a)                                  The
Owner Trustee shall not take any action that is inconsistent with the purposes
of the Trust set forth in Section 2.03. 
The Ownership Certificate Holder shall not direct the Owner Trustee to
take action that would violate the provisions of this Section 5.05.

 

(b)                                 The
Owner Trustee shall not, except as provided herein, convey or transfer any of
the Trust’s properties or assets, including those included in the Trust Estate,
to any person unless such conveyance or transfer shall not violate the
provisions of the Indenture.

 

Section 5.06.                             Prior
Notice to the Certificateholders with Respect to Certain Matters.  With respect to the following matters, the
Owner Trustee shall not take action unless at least 30 days before the taking
of such action, the Owner Trustee shall have notified each Certificateholder in
writing of the proposed action and each Certificateholder shall have notified
the Owner Trustee in writing prior to the 30th day after such notice is given
that each Certificateholder has consented to such action or provided
alternative direction:

 

(a)                                  The
initiation of any claim or lawsuit by the Trust (except claims or lawsuits
brought in connection with the collection of cash distributions due and owing
under the Collateral) and the compromise of any action, claim or lawsuit
brought by or against the Trust (except with respect to the aforementioned
claims or lawsuits for collection of cash distributions due and owing under the
Collateral);

 

17

 

(b)                                 the
election by the Trust to file an amendment to the Certificate of Trust (unless
such amendment is required to be filed under the Delaware Trust Statute);

 

(c)                                  the
amendment of the Indenture by a supplemental indenture or of this Agreement,
the Swap Agreement or any other Operative Agreement in circumstances where the
consent of any Noteholder is required;

 

(d)                                 the
amendment or other change of the Indenture by a supplemental indenture or of
this Agreement or any other Operative Agreement in circumstances where the
consent of any Noteholder is not required and such amendment materially
adversely affects the interests of any Certificateholder;

 

(e)                                  the
amendment of the Transfer and Servicing Agreement in circumstances where the
consent of any Securityholder is required;

 

(f)                                    the
amendment, change or modification of the Transfer and Servicing Agreement, except
to cure any ambiguity or to amend or supplement any provision in a manner or
add any provision that would not materially and adversely affect the interests
of any Certificateholder;

 

(g)                                 the
appointment pursuant to the Indenture of a successor Note Registrar, Paying
Agent or Indenture Trustee or pursuant to this Agreement of a successor
Certificate Registrar or Certificate Paying Agent or the consent to the
assignment by the Note Registrar, Paying Agent, Indenture Trustee, Certificate
Registrar or Certificate Paying Agent of its obligations under the Indenture or
this Agreement, as applicable;

 

(h)                                 the
consent to the calling or waiver of any default of any Operative Agreement;

 

(i)                                     the
consent to the assignment by the Indenture Trustee of its obligations under any
Operative Agreement;

 

(j)                                     except
as provided in Article VIII hereof, dissolve, terminate or liquidate the
Trust in whole or in part;

 

(k)                                  the
merger, conversion or consolidation of the Trust with or into any other entity,
or conveyance or transfer of all or substantially all of the Trust’s assets to
any other entity;

 

(l)                                     the
incurrence, assumption or guaranty by the Trust of any indebtedness other than
as set forth in this Agreement;

 

(m)                               the
taking of any action which conflicts with any Operative Agreement or would make
it impossible to carry on the ordinary business of the Trust or change the
Trust’s purpose and powers set forth in this Agreement;

 

(n)                                 the
confession of a judgment against the Trust;

 

(o)                                 the
possession of the Trust assets, or assignment of the Trust’s right to property,
for other than a Trust purpose; or

 

18

 

(p)                                 the
lending of funds by the Trust to any entity.

 

In addition, the Trust shall not commingle its assets
with those of any other entity.  The
Trust shall maintain its financial and accounting books and records separate
from those of any other entity.  Except
as expressly set forth herein, the Trust shall pay its indebtedness, operating
expenses and liabilities from its own funds, and the Trust shall neither incur
any indebtedness nor pay the indebtedness, operating expenses and liabilities
of any other entity.  Except as expressly
set forth herein, the Trust shall not engage in any dissolution, liquidation,
consolidation, merger or sale of assets. 
The Trust shall maintain appropriate minutes or other records of all
appropriate actions and shall maintain its office separate from the offices of
the Depositor or any of its Affiliates. 
The Trust shall not engage in any business activity in which it is not
currently engaged other than as contemplated by the Operative Agreements and
related documentation.  The Trust shall
not form, or cause to be formed, any subsidiaries and shall not own or acquire
any asset other than as contemplated by the Operative Agreements and related
documentation.  Other than as
contemplated by the Operative Agreements and related documentation, the Trust
shall not follow the directions or instructions of the Depositor.  The Trust shall conduct its own business in
its own name.  The Trust shall observe
all formalities required under the Delaware Trust Statute.  The Trust shall not hold out its credit as
being available to satisfy the obligations of any other person or entity.  The Trust shall not acquire the obligations
or securities of its Affiliates or the Seller. 
Other than as contemplated by the Operative Agreements and related
documentation, the Trust shall not pledge its assets for the benefit of any
other person or entity.  The Trust shall
correct any known misunderstanding regarding its separate identity.  The Trust shall not identify itself as a
division of any other person or entity.

 

For accounting purposes, the Trust shall be treated as
an entity separate and distinct from each Certificateholder.  The pricing and other material terms of all
transactions and agreements to which the Trust is a party shall be
intrinsically fair to all parties thereto. 
This Agreement is and shall be the only agreement among the parties
thereto with respect to the creation, operation and termination of the Trust.

 

The Owner Trustee shall not have the power, except
upon the written direction of the Ownership Certificate Holder, and to the
extent otherwise consistent with the Operative Agreements, to (i) remove
or replace the Indenture Trustee, or (ii) institute a bankruptcy against
the Trust.  So long as the Indenture
remains in effect, to the extent permitted by applicable law, the Ownership
Certificate Holder shall have no power to commence, and shall not commence, any
bankruptcy with respect to the Trust or direct the Owner Trustee to commence
any bankruptcy with respect to the Trust.

 

(q)                                 The
Owner Trustee shall not have the power, except upon the written direction of
the Ownership Certificate Holder, to (i) remove the Trust Administrator
under the Transfer and Servicing Agreement pursuant to Section 7.10
thereof, (ii) appoint a successor Trust Administrator pursuant to Section 7.10
of the Transfer and Servicing Agreement, or (iii) except as expressly
provided in the Indenture, to sell the Collateral after the termination of the
Indenture.  The Owner Trustee shall take
the actions referred to in the preceding sentence only upon written
instructions signed and authorized by the Ownership Certificate Holder.

 

19

 

Section 5.07.                             Action
by the Holder with Respect to Bankruptcy. 
The Owner Trustee shall not have the power to commence or consent to a
bankruptcy relating to the Trust without the prior approval of the Ownership
Certificate Holder and the delivery to the Owner Trustee by the Ownership
Certificate Holder of a certificate certifying that the Ownership Certificate
Holder reasonably believes that the Trust is insolvent.  This paragraph shall survive for one year and
one day following termination of this Agreement.  So long as the Indenture remains in effect,
the Ownership Certificate Holder shall not have the power to institute, and
shall not institute, any bankruptcy with respect to the Trust or direct the
Owner Trustee to take such action.

 

Section 5.08.                             Restrictions
on the Ownership Certificate Holder’s Power.  The Ownership Certificate Holder shall not
direct the Owner Trustee to take or to refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the
Owner Trustee under this Agreement or any of the Operative Agreements or would
be contrary to Section 2.03 nor shall the Owner Trustee be obligated to
follow any such direction, if given.

 

ARTICLE VI

CONCERNING THE OWNER TRUSTEE

 

Section 6.01.                             Acceptance
of Trusts and Duties.  The Owner
Trustee accepts the trusts hereby created and agrees to perform the same but
only upon the terms of this Agreement and the terms of the Transfer and
Servicing Agreement.  The Owner Trustee
also agrees to disburse all moneys actually received by it constituting part of
the Trust Estate upon the terms of this Agreement.  The Bank shall not be answerable or
accountable hereunder or under any other Operative Agreements under any
circumstances, except (i) for its own willful misconduct, gross negligence
or bad faith, (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 6.04, (iii) for liabilities arising
from the failure by the Bank to perform obligations expressly undertaken by it
in the last sentence of Section 5.04, or (iv) for taxes, fees or
other charges based on or measured by any fees, commissions or compensation
received by the Bank in connection with any of the transactions contemplated by
this Agreement, any other Operative Agreements or the Notes.  In particular, but not by way of limitation:

 

(a)                                  The
Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer of the Owner Trustee;

 

(b)                                 The
Bank shall not be liable with respect to any action taken or omitted to be
taken by the Owner Trustee in accordance with the instructions of any
Certificateholder;

 

(c)                                  No
provision of this Agreement shall require the Bank to expend or risk funds or
otherwise incur any financial liability in the performance of any of the Owner
Trustee’s rights or powers hereunder or under any other Operative Agreements if
the Bank shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured or provided to it;

 

(d)                                 Under
no circumstance shall the Bank be liable for indebtedness evidenced by or
arising under any of the Operative Agreements, including the principal of and
interest on the Notes;

 

20

 

(e)                                  The
Bank shall not be liable with respect to any action taken or omitted to be
taken by the Depositor, the Trust Administrator, the Master Servicer, the
Indenture Trustee, any Officer or the Certificate Paying Agent under this
Agreement or any other Operative Agreement or otherwise and the Bank shall not
be obligated to perform or monitor the performance of any obligations or duties
under this Agreement or the other Operative Agreements which are to be
performed by the Certificate Paying Agent under this Agreement, the Trust
Administrator under the Transfer and Servicing, the Indenture Trustee under the
Indenture or by any other Person under any of the Operative Agreements; and

 

(f)                                    The
Bank shall not be responsible for or in respect of the recitals herein, the
validity or sufficiency of this Agreement or for the due execution hereof by
the Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Trust Estate or for or in respect of the validity or
sufficiency of the Operative Agreements, other than the certificate of
authentication on the Certificates, and the Bank shall in no event assume or
incur any liability, duty or obligation to any Noteholder, the Depositor or to
any Certificateholder, other than as expressly provided for herein.

 

Section 6.02.                             Furnishing
of Documents.  The Owner Trustee will
furnish to the Trust Administrator (for distribution to each
Certificateholder), promptly upon receipt of a written request therefor, duplicates
or copies of all reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Owner Trustee hereunder
or under the Operative Agreements unless the Trust Administrator shall have
already received the same.

 

Section 6.03.                             Books
and Records.  The Owner Trustee shall
keep or cause to be kept proper books of record and account of all the
transactions under this Agreement, including a record of the name and address
of each Certificateholder.  The Owner Trustee
shall be deemed to have complied with this Section 6.03 by the appointment
of the Trust Administrator and the Certificate Paying Agent to perform the
duties hereunder.

 

Section 6.04.                             Representations
and Warranties.

 

(a)                                  The
Bank represents and warrants to the Depositor, for the benefit of each
Certificateholder and the Swap Counterparty, as follows:

 

(i)                                     the
Bank is a national banking association, duly organized and validly existing
under the laws of the United States and has the power and authority to execute,
deliver and perform its obligations under this Agreement and (assuming due
authorization, execution and delivery of this Agreement by the Depositor and
Trust Administrator), has the power and authority as Owner Trustee to execute
and deliver the Operative Agreements and to perform its obligations thereunder
and, assuming the due authorization, execution and delivery hereof by the other
parties hereto, this Agreement constitutes a legal, valid and binding
obligation of the Bank or the Owner Trustee, as the case may be, enforceable
against the Bank or the Owner Trustee, as the case may be, in accordance with
its terms, except that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors’ rights generally and (b) the remedy of specific
performance and injunctive and

 

21

 

other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;

 

(ii)                                  the
Bank has no reason to believe that anyone authorized to act on its behalf has
offered any interest in and to the Trust for sale to, or solicited any offer to
acquire any of the same from, anyone;

 

(iii)                               the
execution, delivery and performance by the Bank, either in its individual
capacity or as Owner Trustee, as the case may be, of the Operative Agreements
will not result in any violation of, or be in any conflict with, or constitute
a default under any of the provisions of any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, lease, note or bond
purchase agreement, license, judgment, order or other agreement to which the
Bank is a party or by which it or any of its properties is bound;

 

(iv)                              the
execution and delivery by the Bank of this Agreement, and the performance of
its duties as Owner Trustee hereunder, do not require the consent or approval
of, the giving of notice to, or the registration with, or the taking of any
other action with respect to, any governmental authority or agency of the State
of Delaware (except as may be required by the Delaware Trust Statute); and

 

(v)                                 there
are no pending or, to the best of its knowledge, threatened actions or proceedings
against the Bank before any court, administrative agency or tribunal which, if
determined adversely to it, would materially and adversely affect its ability,
either in its individual capacity or as Owner Trustee, as the case may be, to
perform its obligations under this Agreement or the Operative Agreements.

 

(b)                                 Wells
Fargo Bank, N.A., as Trust Administrator, hereby represents and warrants to the
Depositor, for the benefit of each Certificateholder and the Swap Counterparty,
that:

 

(i)                                     it
is a national banking association, duly organized and validly existing in good
standing under the laws of the United States, and has the power and authority
to execute, deliver and perform its obligations under this Agreement and,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, this Agreement constitutes a legal, valid and binding
obligation of the Trust Administrator, enforceable against the Trust
Administrator in accordance with its terms, except that (a) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors’ rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought;

 

(ii)                                  it
has taken all action necessary to authorize the execution and delivery by it of
this Agreement, and this Agreement will be executed and delivered by one of its
officers who is duly authorized to execute and deliver this Agreement on its
behalf; and

 

(iii)                               neither
the execution nor the delivery by it of this Agreement nor the consummation by
it of the transactions contemplated hereby nor compliance by it with

 

22

 

any of the terms or
provisions hereof will contravene any federal, governmental rule or
regulation governing the banking or trust powers of the Trust Administrator or
any judgment or order binding on it, or constitute any default under its
charter documents or by-laws or any indenture, mortgage, contract, agreement or
instrument to which it is a party or by which any of its properties may be
bound.

 

Section 6.05.                             Reliance;
Advice of Counsel.

 

(a)                                  Except
as provided in Section 6.01, the Owner Trustee shall incur no liability to
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, certificate, report, opinion, bond or other document or paper
believed by it to be genuine and believed by it to be signed by the proper
party or parties.  The Owner Trustee may
accept a certified copy of a resolution of the board of directors or other
governing body of any corporate or partnership entity as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect.  As to any fact or
matter the manner of ascertainment of which is not specifically prescribed
herein, the Owner Trustee may for all purposes hereof rely on a certificate,
signed by the president or any vice president (or the general partner, in the
case of a partnership) and by the treasurer or any assistant treasurer or the
secretary or any assistant secretary of the relevant party, as to such fact or
matter, and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.

 

(b)                                 In
its exercise or administration of the trusts and powers hereunder, including
its obligations under Section 5.02(b), and in the performance of its
duties and obligations under this Agreement or the other Operative Agreements,
the Owner Trustee may employ agents and attorneys and enter into agreements
(including the Transfer and Servicing Agreement) with any of them, and the
Owner Trustee shall not be answerable for the default or misconduct of any such
agents or attorneys if such agents or attorneys shall have been selected by the
Owner Trustee with reasonable care.  If,
and to the extent, the Seller shall have failed to reimburse the Owner Trustee
for all reasonable expenses and indemnities incurred pursuant to this Section 6.05(b),
as provided in Section 7.01 and Section 7.02, the Owner Trustee may
seek reimbursement therefor from the Trust Estate.

 

(c)                                  In
the administration of the trusts and performance of its duties hereunder, the
Owner Trustee may consult with counsel, accountants and other skilled Persons
to be selected and employed by it, and the Owner Trustee shall not be liable
for anything done, suffered or omitted in good faith by it in accordance with
the reasonable advice or opinion of any such counsel, accountants or other
skilled Persons.  If, and to the extent,
the Seller shall have failed to reimburse the Owner Trustee for all reasonable
expenses and indemnities incurred pursuant to this Section 6.05(c), as
provided in Section 7.01 and Section 7.02, the Owner Trustee may seek
reimbursement therefor from the Trust Estate.

 

Section 6.06.                             Not
Acting in Individual Capacity. 
Except as provided in this Article VI, in accepting the trusts
hereby created the Owner Trustee acts solely as trustee hereunder and not in
its individual capacity, and all persons having any claim against the Owner
Trustee by reason of the transactions contemplated by the Operative Agreements
shall look only to the Trust Estate for payment or satisfaction thereof.

 

23

 

Section 6.07.                             Owner
Trustee Not Liable for Certificates or Collateral.  The recitals contained herein and in the
Certificates (other than the signatures and countersignatures of the Owner
Trustee on the Certificates) shall be taken as the statements of the Depositor,
and the Owner Trustee assumes no responsibility for the correctness thereof.  The Owner Trustee makes no representations as
to the validity or sufficiency of this Agreement, of any Operative Agreement or
of the Certificates (other than the signatures and countersignatures of the
Owner Trustee on the Certificates) or the Notes, or of any Collateral or
related documents.  The Owner Trustee
shall at no time have any responsibility or liability for or with respect to
the legality, validity and enforceability of any Collateral, or the perfection
and priority of any security interest created by any Collateral or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Agreement or the Noteholders under
the Indenture, including, without limitation: 
the existence, condition and ownership of any Collateral; the existence
and enforceability of any insurance thereon; the existence and contents of any
Collateral on any computer or other record thereof; the validity of the
assignment of any Collateral to the Trust or of any intervening assignment; the
completeness of any Collateral; the performance or enforcement of any
Collateral; the compliance by the Depositor with any warranty or representation
made under any Operative Agreements or in any related document or the accuracy
of any such warranty or representation or any action of the Trust Administrator
or the Indenture Trustee taken in the name of the Owner Trustee.

 

Section 6.08.                             Owner
Trustee May Own Notes.  The
Owner Trustee in its individual capacity may become an owner or pledgee of
Notes and may deal with the Depositor, the Trust Administrator and the
Indenture Trustee in banking transactions with the same rights as it would have
if it were not Owner Trustee.

 

Section 6.09.                             Licenses.  The Depositor shall cause the Trust to use
its best efforts to obtain and maintain the effectiveness of any licenses
required in connection with this Agreement and the other Operative Agreements
and the transactions contemplated hereby and thereby until such time as the
Trust shall terminate in accordance with the terms hereof.  It shall be the duty of the Owner Trustee to
cooperate with the Depositor with respect to such matters.

 

Section 6.10.                             Doing
Business in Other Jurisdictions. 
Notwithstanding anything contained herein to the contrary, neither the
Bank nor the Owner Trustee shall be required to take any action in any
jurisdiction other than in the State of Delaware if the taking of such action
will (i) require the consent or approval or authorization or order of or
the giving of notice to, or the registration with or the taking of any other
action in respect of, any state or other governmental authority or agency of
any jurisdiction other than the State of Delaware; (ii) result in any fee,
tax or other governmental charge under the laws of any jurisdiction or any
political subdivisions thereof in existence on the date hereof other than the
State of Delaware becoming payable by the Bank or the Owner Trustee; or (iii) subject
the Bank or the Owner Trustee to personal jurisdiction in any jurisdiction
other than the State of Delaware for causes of action arising from acts
unrelated to the consummation of the transactions by the Bank or the Owner
Trustee, as the case may be, contemplated hereby.  The Owner Trustee shall be entitled to obtain
advice of counsel (which advice shall be an expense of the Trust) to determine
whether any action required to be taken pursuant to this Agreement results in
the consequences described in clauses (i), (ii) and (iii) of the
preceding sentence.  In the event that
such counsel advises the Owner Trustee that

 

24

 

such action will result in such consequences, the Owner Trustee will
appoint a co-trustee pursuant to Section 9.05 hereof to proceed with such
action.

 

Section 6.11.                             Sarbanes-Oxley
Act Certification.  Notwithstanding
anything to the contrary herein or in any Operative Agreement, the Owner
Trustee shall not be required to execute, deliver or certify on behalf of the
Trust or any other Person any filings, certificates, affidavits or other
instruments in connection with certifications required under the Sarbanes-Oxley
Act of 2002.

 

ARTICLE VII

INDEMNIFICATION AND COMPENSATION

 

Section 7.01.                             Trust
Expenses.  The Seller shall pay the
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee in connection therewith.  The Seller shall also pay (or reimburse the
Bank for) all reasonable expenses of the Owner Trustee hereunder, including,
without limitation, the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Owner Trustee may
employ in connection with the exercise and performance of its rights and duties
under the Operative Agreements.

 

Section 7.02.                             Indemnification.  The Seller agrees to assume liability for,
and indemnify the Bank and its successors, assigns, officers, directors, agents
and servants, against and from, any and all liabilities, obligations, losses,
damages, taxes, claims, actions, suits, costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, “Expenses”) which may be imposed on, incurred by or asserted at
any time against the Bank (whether or not indemnified against by other parties)
in any way relating to or arising out of this Agreement, any Operative
Agreement, the Collateral, the administration of the Trust Estate or the action
or inaction of the Owner Trustee hereunder, except only that the Seller shall
not be required to indemnify the Bank for Expenses arising or resulting from
any of the matters described in the third sentence of Section 6.01.  The indemnities contained in this Section 7.02
shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement.  In the
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee’s choice of legal counsel shall be
subject to the approval of the Seller, which approval shall not be unreasonably
withheld.

 

Section 7.03.                             Compensation.  The Bank shall receive as compensation for
its services hereunder such fees as are set forth in the Fee Letter Agreement
between the Bank and the Seller.

 

Section 7.04.                             Lien
on Trust Estate.  The Bank shall have
a lien on the Trust Estate for any compensation or indemnity due hereunder,
such lien to be subject only to prior liens of the Indenture.  The Bank shall not bring any proceedings to
foreclose on such lien if and to the extent the Trust Estate is subject to the
lien of the Indenture.  Any amount paid
to the Owner Trustee pursuant to this Article VII shall be deemed not to
be part of the Trust Estate immediately after such payment.

 

25

 

ARTICLE VIII

TERMINATION OF AGREEMENT

 

Section 8.01.                             Termination
of Agreement.

 

(a)                                  This
Agreement (other than Article VII) shall terminate and the trusts created
hereby shall dissolve and terminate and the Trust Estate shall, subject to the
Indenture and Sections 4.01 and 7.04 and Section 3808 of the Delaware
Trust Statute, be distributed to the Certificateholders, and this Agreement
shall be of no further force or effect, upon the earlier of (i) the full
payment of principal and interest due on all Classes of the Notes and all
obligations under the Swap Agreement; and (ii) the sale or other final
disposition by the Indenture Trustee or the Owner Trustee, as the case may be,
of all the Trust Estate and the final distribution by the Indenture Trustee or
the Owner Trustee, as the case may be, of all moneys or other property or
proceeds of the Trust Estate in accordance with the terms of the Indenture, the
Transfer and Servicing Agreement and Section 4.02.  The bankruptcy, liquidation or dissolution of
any Certificateholder shall not operate to terminate this Agreement, nor
entitle such Certificateholder’s legal representatives to claim an accounting
or to take any action or proceeding in any court for a partition or winding up
of the Trust Estate, nor otherwise affect the rights, obligations and
liabilities of the parties hereto.

 

(b)                                 Except
as provided in Section 8.01(a), none of the Depositor or any
Certificateholder shall be entitled to revoke or terminate the Trust
established hereunder.

 

(c)                                  Notice
of any termination of the Trust, specifying the Payment Date upon which
Certificateholders shall surrender their Certificates to the Certificate Paying
Agent for payment of the final distribution and cancellation, shall be given by
the Certificate Paying Agent by letter to the Certificateholders, the Swap
Counterparty and the Rating Agencies mailed within five Business Days of receipt
of notice of the final payment on the Notes pursuant to the Transfer and
Servicing Agreement, stating (i) the Payment Date upon or with respect to
which final payment of the Certificates shall be made upon presentation and
surrender of the Certificates at the office of the Certificate Paying Agent
therein designated, (ii) the amount of any such final payment and (iii) that
the Record Date otherwise applicable to such Payment Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Certificate Paying Agent therein specified.  The Certificate Paying Agent shall give such
notice to the Owner Trustee and the Certificate Registrar at the time such
notice is given to the Certificateholders. 
Upon presentation and surrender of the Certificates, the Certificate
Paying Agent shall cause to be distributed to the applicable Certificateholder
amounts distributable on such Payment Date pursuant to Section 5.08 and Section 6.02
of the Transfer and Servicing Agreement.

 

(d)                                 Upon
the winding up of the Trust and its termination, the Owner Trustee shall upon
the written request of the Depositor cause the Certificate of Trust to be
cancelled by filing a certificate of cancellation with the Secretary of State
in accordance with the provisions of Section 3810 of the Delaware Trust
Statute.

 

26

 

 

ARTICLE IX

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

 

Section 9.01.                             Eligibility
Requirements for Owner Trustee.  The
Owner Trustee shall at all times be a corporation satisfying the provisions of Section 3807(a) of
the Delaware Trust Statute; authorized to exercise corporate powers; having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by Federal or state authorities; and having (or having a parent
which has) a short-term debt rating of at least “A-1” or the equivalent by, or
which is otherwise acceptable to, the Rating Agencies.  If such corporation shall publish reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published.  In case at
any time the Owner Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Owner Trustee shall resign immediately in the
manner and with the effect specified in Section 9.02.

 

Section 9.02.                             Resignation
or Removal of Owner Trustee.  The
Owner Trustee may at any time resign and be discharged from the trusts hereby
created by giving 30 days’ prior written notice thereof to the Depositor, the
Swap Counterparty and the Indenture Trustee. 
Upon receiving such notice of resignation, the Depositor shall promptly
appoint a successor Owner Trustee by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Owner Trustee and one
copy to the successor Owner Trustee.  If
no successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent jurisdiction for
the appointment of a successor Owner Trustee.

 

If at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of Section 9.01 and shall fail
to resign after written request therefor by the Depositor, or if at any time
the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt
or insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor may remove the Owner
Trustee.  If the Depositor shall remove
the Owner Trustee under the authority of the immediately preceding sentence,
the Depositor shall promptly appoint a successor Owner Trustee by written
instrument in duplicate, one copy of which instrument shall be delivered to the
outgoing Owner Trustee so removed and one copy to the successor Owner Trustee
and payment of all fees owed to the outgoing Owner Trustee.

 

Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section shall not become effective until acceptance of appointment by
the successor Owner Trustee pursuant to Section 9.03 and payment of all
fees and expenses owed to the outgoing Owner Trustee.  The Trust Administrator shall provide notice
of such resignation or removal of the Owner Trustee to the Rating Agencies.

 

Section 9.03.                             Successor
Owner Trustee.  Any successor Owner
Trustee appointed pursuant to Section 9.02 shall execute, acknowledge and
deliver to the Trust Administrator and to its predecessor Owner Trustee an
instrument accepting such appointment under this

 

27

 

Agreement, and thereupon the resignation or removal of the predecessor
Owner Trustee shall become effective and such successor Owner Trustee without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties, and obligations of its predecessor under this
Agreement, with like effect as if originally named as Owner Trustee.  The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Trust Administrator and the predecessor Owner Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor Owner Trustee all
such rights, powers, duties, and obligations.

 

No successor Owner Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such
successor Owner Trustee shall be eligible pursuant to Section 9.01.

 

Upon acceptance of appointment by a successor Owner
Trustee pursuant to this Section, the Trust Administrator shall mail notice of
the successor of such Owner Trustee to all Certificateholders, the Indenture
Trustee, the Noteholders, the Swap Counterparty and the Rating Agencies.  If the Trust Administrator fails to mail such
notice within 10 days after acceptance of appointment by the successor Owner
Trustee, the successor Owner Trustee shall cause such notice to be mailed at
the expense of the Trust Administrator.

 

Section 9.04.                             Merger
or Consolidation of Owner Trustee. 
Any Person into which the Owner Trustee may be merged or converted or
with which it may be consolidated or any Person resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
Person succeeding to all or substantially all of the corporate trust business
of the Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided such Person shall be eligible
pursuant to Section 9.01, without the execution or filing of any
instrument or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

 

Section 9.05.                             Appointment
of Co-Trustee or Separate Trustee. 
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Estate or any Collateral may at the time be located, and for
the purpose of performing certain duties and obligations of the Owner Trustee
with respect to the Trust and the Certificates under the Transfer and Servicing
Agreement, the Owner Trustee shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Owner Trustee to
act as co-trustee, jointly with the Owner Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Owner Trustee may consider necessary or
desirable.  No co-trustee or separate
trustee under this Agreement shall be required to meet the terms of eligibility
as a successor trustee pursuant to Section 9.01 and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 9.03.

 

28

 

The Owner Trustee hereby appoints the Trust
Administrator for the purpose of establishing and maintaining the Collection
Account and making the distributions therefrom to the Persons entitled thereto
pursuant to Section 5.08 and Section 6.02 of the Transfer and
Servicing Agreement.

 

Each separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provision and conditions:

 

(a)                                  all
rights, powers, duties and obligations conferred or imposed upon the Owner
Trustee shall be conferred upon and exercised or performed by the Owner 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
Owner 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
Owner 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 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 Owner Trustee;

 

(b)                                 no
trustee under this Agreement shall be personally liable by reason of any act or
omission of any other trustee under this Agreement; and

 

(c)                                  the
Trust Administrator and the Owner Trustee acting jointly may at any time accept
the resignation of or remove any separate trustee or co-trustee.

 

Any notice, request or other writing given to the
Owner Trustee shall be deemed to have been given to the separate trustees and
co-trustees, as if given to each of them. 
Every instrument appointing any separate trustee or co-trustee, other
than this Agreement, shall refer to this Agreement and to the conditions of
this Article.  Each separate trustee and
co-trustee, upon its acceptance of appointment, shall be vested with the
estates specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee.  Each
such instrument shall be filed with the Owner Trustee and a copy thereof given
to the Trust Administrator.

 

Any separate trustee or co-trustee may at any time
appoint the Owner Trustee as its Agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement 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
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.

 

ARTICLE X

MISCELLANEOUS

 

Section 10.01.                       Supplements
and Amendments.  This Agreement may
be amended by the Depositor, the Trust Administrator and the Owner Trustee,
with the consent of each Certificateholder and with the prior written consent
of the Swap Counterparty (but only to the

 

29

 

extent such amendment materially adversely affects the amounts,
priority or timing of payments under the Swap Agreement and the Swap Agreement
is in effect) and with prior written notice to the Rating Agencies, but without
the consent of any of the Noteholders or the Indenture Trustee, to cure any
ambiguity, to correct or supplement any provisions in this Agreement or for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions in this Agreement or of modifying in any manner the
rights of the Noteholders or each Certificateholder; provided, however,
that such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Noteholder or
Certificateholder or adversely affect the tax status of the Trust.  An amendment shall not be deemed to adversely
affect in any material respect the interests of any Noteholder or
Certificateholder and no opinion referred to in the preceding proviso shall be
required to be delivered if the Person requesting the amendment obtains a
letter from each Rating Agencies stating that the amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to each
applicable Class of Notes and Certificates.  Notwithstanding the preceding sentence, an
opinion shall be required with respect to tax matters as set forth in this
paragraph.

 

This Agreement may also be amended from time to time
by the Depositor, the Trust Administrator and the Owner Trustee, with the prior
written consent of the Rating Agencies and with the prior written consent of
the Indenture Trustee, the holders of Notes evidencing more than 66 2/3 % of
the Outstanding Balance of the Notes, the consent of each Certificateholder and
with the prior written consent of the Swap Counterparty (but only to the extent
such amendment materially adversely affects the amounts, priority or timing of
payments under the Swap Agreement and the Swap Agreement is in effect), for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of any Certificateholder; provided,
however, that no such amendment
shall, as evidenced by an Opinion of Counsel, adversely affect the tax status
of the Trust; and provided, further, that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on the Collateral or payments that shall be required to
be made for the benefit of the Noteholders or any Certificateholder or (b) reduce
the aforesaid percentage of the Outstanding Balance of the Notes required to
consent to or to waive the requirement for any Certificateholder to consent to
any such amendment, in either case of clause (a) or (b) without the
consent of the holders of all the outstanding Notes and each Certificateholder.

 

Notwithstanding the foregoing, no provision of
Sections 2.03 or 5.06 hereof may be amended in any manner unless (i) 100%
of the Outstanding Balance of the Noteholders have consented in writing
thereto, (ii) the Rating Agencies have consent in writing thereto or (iii) the
Notes have been paid in full and the Indenture has been discharged.

 

Promptly after the execution of any such amendment or
consent, the Trust Administrator shall furnish written notification of the
substance of such amendment or consent to each Certificateholder, the Indenture
Trustee and the Rating Agencies.

 

It shall not be necessary for the consent of the
Certificateholders, the Noteholders or the Indenture Trustee pursuant to this Section 10.01
to approve the particular form of any proposed amendment or consent, but it
shall be sufficient if such consent shall approve the substance

 

30

 

thereof.  The manner of obtaining such consents (and
any other consents of the Certificateholders provided for in this Agreement or
in any other Operative Agreement) and of evidencing the authorization of the
execution thereof by the Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.

 

Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.

 

Prior to the execution of any amendment to this
Agreement or the Certificate of Trust, the Owner Trustee and the Trust
Administrator shall be entitled to receive and rely upon an Opinion of Counsel,
at the expense of the Trust, stating that the execution of such amendment is
authorized or permitted by this Agreement. 
Neither the Owner Trustee nor the Trust Administrator shall be obligated
to enter into any such amendment which affects the Owner Trustee’s or Trust
Administrator’s own rights, duties or immunities under this Agreement or
otherwise.

 

Section 10.02.                       No Legal
Title to Trust Estate in Certificateholders.  The Certificateholders shall not have legal
title to any part of the Trust Estate and shall only be entitled to receive
distributions with respect to their respective undivided beneficial interest
therein pursuant to Section 4.02 once all amounts then owing with respect
to the Notes have been paid in accordance with the Indenture.  No transfer, by operation of law of any
right, title and interest of any Certificateholder in and to its undivided
beneficial interest in the Trust Estate or hereunder shall operate to terminate
this Agreement or the trusts hereunder or entitle any successor transferee to
an accounting or to the transfer to it of legal title to any part of the Trust
Estate.

 

Section 10.03.                       Pledge
of Collateral by Owner Trustee is Binding. 
The pledge of the Collateral to the Indenture Trustee by the Trust made
under the Indenture and pursuant to the terms of this Agreement shall bind each
Certificateholder and shall be effective to transfer or convey the rights of
the Trust and each Certificateholder in and to such Collateral to the extent
set forth in the Indenture.  No purchaser
or other grantee shall be required to inquire as to the authorization,
necessity, expediency or regularity of such pledge or as to the application of
any proceeds with respect thereto by the Owner Trustee.

 

Section 10.04.                       Limitations
on Rights of Others.  Nothing in this
Agreement, whether express or implied (except for Section 7.04), shall be
construed to give to any Person other than the Owner Trustee and the
Certificateholders any legal or equitable right in the Trust Estate or under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.

 

Section 10.05.                       Notices.  Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and delivered by
hand, by courier or mailed by certified mail, postage prepaid, (a) if to
the Owner Trustee or the Trust, addressed to it at the Corporate Trust Office
of the Owner Trustee or to such other address as the Owner Trustee may have set
forth in a written notice to the Certificateholders and the Depositor addressed
to it at the address set forth for such Certificateholders in the Certificate
Register; (b) if to the Trust Administrator, addressed to it at the
Corporate Trust Office of the Trust Administrator; and (c) if to the

 

31

 

Depositor, Fieldstone Mortgage Investment Corporation, 11000 Broken
Lane Parkway, Suite 600, Columbia, Maryland 21044.  Whenever any notice in writing is required to
be given by the Owner Trustee or the Trust Administrator, such notice shall be
deemed given and such requirement satisfied if such notice is mailed by
certified mail, postage prepaid, addressed as provided above.

 

Section 10.06.                       Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

Section 10.07.                       Separate
Counterparts.  This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.

 

Section 10.08.                       Successors
and Assigns.  All representations,
warranties, covenants and agreements contained herein shall be binding upon,
and inure to the benefit of, the Owner Trustee and its successors and assigns
and the Swap Counterparty, the Depositor and each Certificateholder and its respective
successors, all as herein provided.  Any
request, notice, direction, consent, waiver or other instrument or action by
any Certificateholder shall bind the successors of each such Certificateholder.  Notwithstanding anything to the contrary
herein, the Swap Counterparty is an express third party beneficiary of this
Agreement.

 

Section 10.09.                       Headings.  The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

 

Section 10.10.                       Governing
Law.  THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF DELAWARE WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.

 

Section 10.11.                       No
Petition.

 

(a)                                  The
Owner Trustee and the Trust Administrator, by entering into this Agreement,
each Certificateholder, by accepting the Certificates, and the Indenture
Trustee and each Noteholder, by accepting the benefits of this Agreement,
hereby covenant and agree that they will not at any time institute against the
Depositor or the Trust, or join in any institution against the Depositor or the
Trust of, any bankruptcy under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Certificates,
the Notes, this Agreement or any of the other Operative Agreements.

 

(b)                                 The
Depositor shall not be liable for the default or misconduct of the Trust
Administrator, the Owner Trustee, the Indenture Trustee or the Certificate
Paying Agent under

 

32

 

any of the Operative Agreements or otherwise and the Depositor shall
have no obligation or liability to perform the obligations of the Trust under
this Agreement or the Operative Agreements that are required to be performed by
the Trust Administrator under the Transfer and Servicing Agreement or the
Indenture Trustee under the Indenture.

 

Section 10.12.                       No
Recourse.  Each Certificateholder by
accepting a Certificate acknowledges that such Certificateholder’s Certificate
represents a beneficial interest in the Trust only and does not represent an
interest in or an obligation of the Depositor, the Trust Administrator, the
Owner Trustee, any co-trustee, the Bank or any Affiliate thereof (other than
the Trust) and no recourse may be had against such parties or their assets,
except as may be expressly set forth or contemplated in this Agreement, the
Certificates or the other Operative Agreements.

 

Section 10.13.                       Customer
Identification.  The Depositor’s
legal name, principal place of business, local office or other physical
location street address is Fieldstone Mortgage Investment Corporation, 11000
Broken Lane Parkway, Suite 600, Columbia, Maryland 21044, and its
government issued identification number is 20-2972688.  The Seller’s legal name, principal place of business,
local office or other physical location street address is Fieldstone Investment
Corporation, 11000 Broken Land Parkway, Suite 600, Columbia, Maryland
21044, and its government issued identification number is 54-1873198.  In connection with any federal, state or
local laws requiring financial institutions to obtain, verify and record
information that identifies each person or entity who opens an account, the
Owner Trustee may request, and the Seller and the Depositor agree to promptly
provide to the Owner Trustee, copies of documentation which substantiates the
identity of the Depositor or the Seller, as applicable.  Such documentation may include, but is not
limited to, financial statements, government licenses, certified copies of
formation documents or identification documentation of principals claiming to
represent such party.

 

ARTICLE XI

OFFICERS

 

Section 11.01.                       Appointment
of Officers.  The Trust may have one
or more Officers who are hereby empowered to take and are responsible for
performing all ministerial duties on behalf of the Trust pursuant to this
Agreement and the other Operative Agreements, including, without limitation,
the execution of the Officers’ Certificate (as defined in the Indenture), the
Trust Order (as defined in the Indenture), the Trust Request (as defined in the
Indenture), the annual compliance report required under Section 3.09 of
the Indenture, and any annual reports, documents and other reports which the
Trust is required to file with the Securities and Exchange Commission pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended.  Each of the Chairman of the
Board, the Chief Executive Officer, the President, each Senior Vice President
and each Vice President of the Depositor is hereby appointed as an Officer of
the Trust.  The Depositor shall promptly
deliver to the Owner Trustee and the Indenture Trustee a list of its officers
who shall become the Officers of the Trust pursuant to this Section 11.01.

 

Section 11.02.                       Officers
to Provide Information to the Owner Trustee.  It shall be the duty of each Officer to keep
the Owner Trustee reasonably and promptly informed as to material

 

33

 

events relating to the Trust, including, without limitation, all claims
pending or threatened against the Trust, the purchase and sale of any material
portion of the Trust Estate and the execution by such Officer on behalf of the
Trust of any material agreements or instruments.

 

34

 

IN WITNESS WHEREOF, the parties hereto have caused
this Trust Agreement to be duly executed by their respective officers hereunto
duly authorized, as of the day and year first above written.

 

	
   

  	
  FIELDSTONE MORTGAGE INVESTMENT CORPORATION,

  
	
   

  	
  as Depositor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ John C. Kendall

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John C. Kendall

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  U.S. BANK TRUST NATIONAL ASSOCIATION,

  
	
   

  	
  not in its individual capacity but solely as

  
	
   

  	
  Owner Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/ Charles F. Pedersen

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Charles F. Pedersen

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A.,

  
	
   

  	
  not in its individual capacity but solely as Trust

  
	
   

  	
  Administrator

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Amy Doyle

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Amy Doyle

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
  Acknowledged and
  Agreed, solely

  	
   

  	
   

  
	
  for purposes of
  Sections 2.11, 7.01, 7.02 and 10.13:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FIELDSTONE
  INVESTMENT CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/
  John C. Kendall

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John C. Kendall

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  	
   

  	
   

  
														

 

 

EXHIBIT A

 

FORM OF CERTIFICATES

 

THIS OWNERSHIP CERTIFICATE HAS NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE
SECURITIES LAWS OF ANY STATE.  THIS
OWNERSHIP CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR
OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF ONLY TO (A) A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE ACT, IN A
TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT PURSUANT
TO RULE 144A OR (B) AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE ACT THAT
IS ACQUIRING THE OWNERSHIP CERTIFICATE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE ACT.  NO PERSON IS
OBLIGATED TO REGISTER THIS OWNERSHIP CERTIFICATE UNDER THE ACT OR ANY STATE
SECURITIES LAWS.

 

THIS CERTIFICATE MAY NOT BE ACQUIRED BY A
TRANSFEREE FOR, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT THAT IS SUBJECT TO SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) OR ANY SUBSTANTIALLY
SIMILAR LAW, OR ANY ENTITY DEEMED TO HOLD THE PLAN ASSETS OF THE
FOREGOING.  EACH INVESTOR IN THIS
CERTIFICATE WILL BE DEEMED TO MAKE THE FOREGOING REPRESENTATIONS AND WILL FURTHER
BE DEEMED TO REPRESENT, WARRANT AND COVENANT THAT IT WILL NOT SELL, PLEDGE OR
OTHERWISE TRANSFER THIS CERTIFICATE IN VIOLATION OF THE FOREGOING.

 

THIS OWNERSHIP CERTIFICATE DOES NOT REPRESENT AN
INTEREST IN OR OBLIGATION OF THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE
TRUSTEE, THE OWNER TRUSTEE, THE TRUST ADMINISTRATOR OR ANY OF THEIR RESPECTIVE
AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE TRUST AGREEMENT OR THE OTHER
OPERATIVE AGREEMENTS.

 

THIS OWNERSHIP CERTIFICATE IS SUBORDINATE IN RIGHT OF
PAYMENT AS DESCRIBED IN THE TRANSFER AND SERVICING AGREEMENT REFERRED TO
HEREIN.

 

NO TRANSFER OF THIS OWNERSHIP CERTIFICATE SHALL BE
MADE UNLESS THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED AN AFFIDAVIT FROM THE
PROPOSED TRANSFEREE IN WHICH THE PROPOSED TRANSFEREE DECLARES THAT IT IS A REAL
ESTATE INVESTMENT TRUST (A “REIT”) WITHIN THE MEANING

 

A-1

 

OF SECTIONS 856 AND 857 OF THE CODE OR A QUALIFIED
REIT SUBSIDIARY WITHIN THE MEANING OF SECTION 856(i) OF THE CODE OR
AN ENTITY THAT IS DISREGARDED FOR UNITED STATES FEDERAL INCOME TAX PURPOSES
THAT IS WHOLLY OWNED BY A REIT OR QUALIFIED REIT SUBSIDIARY.  MOREOVER, ANY ATTEMPTED TRANSFER OF THIS
OWNERSHIP CERTIFICATE TO A PERSON OTHER THAN A REIT OR A QUALIFIED REIT
SUBSIDIARY SHALL BE VOID AB INITIO AND THE PURPORTED TRANSFEREE SHALL ACQUIRE NO
RIGHTS IN THIS OWNERSHIP CERTIFICATE.

 

A-2

 

FIELDSTONE
MORTGAGE INVESTMENT TRUST, SERIES 2005-2

 

	
  Certificate No. 1

  	
   

  	
  Percentage Interest:
  100%

  

 

First Payment Date: 
August 25, 2005

 

Evidencing a fractional undivided equity interest in
the Trust Estate, the property of which consists primarily of the Collateral in
Fieldstone Mortgage Investment Trust, Series 2005-2 (the “Trust”), a
Delaware statutory trust formed by Fieldstone Mortgage Investment Corporation,
a Maryland corporation, as depositor (the “Depositor”), pursuant to the
Agreement referred to below.

 

This certifies that FIELDSTONE
MORTGAGE OWNERSHIP CORP. is the registered owner of the Percentage
Interest referred to above.

 

The Trust was created pursuant to a Trust Agreement
(the “Agreement”) dated as of July 26, 2005, between the Depositor and
U.S. Bank Trust National Association, as owner trustee (the “Owner Trustee,”
which term includes any successor entity under the Agreement), as amended and
restated as of August 4, 2005, among the Depositor, the Owner Trustee and
Wells Fargo Bank, N.A., as trust administrator (the “Trust Administrator”), a
summary of certain of the pertinent provisions of which is set forth
hereinafter.  This Ownership Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Ownership Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound, and
the Transfer and Servicing Agreement dated as of July 1, 2005 (as amended
or supplemented from time to time, the “Transfer and Servicing Agreement”), by
and among the Trust, the Depositor, Wells Fargo Bank, N.A., as trust
administrator (in such capacity, the “Trust Administrator”) and master servicer
(in such capacity, the “Master Servicer”), Fieldstone Servicing Corporation, as
servicer, Chase Home Finance LLC, as subservicer, Fieldstone Investment
Corporation, as seller, and HSBC Bank USA, National Association, as indenture
trustee (the “Indenture Trustee”). 
Distributions on this Ownership Certificate shall be made by the Trust
Administrator, in its capacity as Certificate Paying Agent under the Agreement
and the Transfer and Servicing Agreement.

 

This Ownership Certificate is issued under the
Agreement to which reference is hereby made for a statement of the respective
rights thereunder of the Depositor, the Owner Trustee and the Holder of the
Ownership Certificate and the terms upon which the Ownership Certificate is
executed and delivered.  All terms used
in this Ownership Certificate which are defined in the Agreement shall have the
meanings assigned to them in the Agreement. 
The Trust Estate consists of the Collateral in the Fieldstone Mortgage
Investment Trust, Series 2005-2.  To
the extent not otherwise defined herein, capitalized terms used herein have the
meanings assigned to such terms in the Agreement or the Transfer and Servicing
Agreement.  The rights of the Holder are
subordinated to the rights of the Noteholders, as set forth in the Indenture
dated as of July 1, 2005, among the Trust, Trust Administrator and the
Indenture Trustee.

 

A-3

 

There will be distributed on the 25th day
of each month or, if such 25th day is not a Business Day, the next
Business Day (each, a “Payment Date”), commencing in August 2005, to the
Holder at the close of business on the last Business Day of the month preceding
the month of such Payment Date (the “Record Date”), the amount to be
distributed to Holder on such Payment Date, all as described in the Transfer
and Servicing Agreement.

 

The Holder, by its acceptance of this Ownership
Certificate, agrees that it will look solely to the funds on deposit in the
Collection Account that have been released from the lien of the Indenture for
payment hereunder and that neither the Owner Trustee, the Trust Administrator
or the Certificate Paying Agent in their individual capacities nor the
Depositor is personally liable to the Holder for any amount payable under this
Ownership Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.

 

The Holder acknowledges and agrees that its rights to
receive distributions in respect of this Ownership Certificate are subordinated
to the rights of the Noteholders as described in the Indenture.

 

The Depositor and the Holder, by acceptance of an
Ownership Certificate, agree to treat, and to take no action inconsistent with
the treatment of, the Trust as a Qualified REIT Subsidiary for federal, and any
applicable state and local income tax purposes.

 

The Holder, by its acceptance of an Ownership
Certificate, covenants and agrees that it will not at any time institute
against the Depositor or the Trust, or join in any institution against the
Depositor or the Trust 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 Ownership Certificate, the Notes, the Agreement or
any other of the Operative Agreements.

 

Distributions on this Ownership Certificate will be made
as provided in the Agreement by the Certificate Paying Agent by wire transfer
or check mailed to the Holder without the presentation or surrender of this
Ownership Certificate or the making of any notation hereon.  Except as otherwise provided in the Agreement
and notwithstanding the above, the final distribution on this Ownership
Certificate will be made after due notice by the Certificate Paying Agent of
the pendency of such distribution and only upon presentation and surrender of
this Ownership Certificate at the office or agency maintained by the
Certificate Registrar for that purpose.

 

Reference is hereby made to the further provisions of
this Ownership Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.

 

Unless the certificate of authentication hereon shall
have been executed by an authorized officer of the Owner Trustee, or an
authenticating agent by manual signature, this Ownership Certificate shall not
entitle the Holder hereof to any benefit under the Agreement or be valid for
any purpose.

 

THIS OWNERSHIP CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS

 

A-4

 

CONFLICT OF LAWS
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

A-5

 

IN WITNESS WHEREOF, the Owner Trustee, on behalf of
the Trust and not in its individual capacity, has caused this Ownership
Certificate to be duly executed.

 

	
   

  	
  FIELDSTONE
  MORTGAGE INVESTMENT

  TRUST, SERIES 2005-2

  
	
   

  	
   

  
	
   

  	
  By:  U.S. BANK TRUST NATIONAL

  ASSOCIATION,

  
	
   

  	
  not in its
  individual capacity but solely as Owner

  Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CERTIFICATE OF AUTHENTICATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  This
  is the Ownership Certificate referred to in the within-mentioned Trust
  Agreement.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO
  BANK, N.A.,

  
	
   

  	
  not in its
  individual capacity but solely as Trust

  Administrator

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  
						

 

A-6

 

FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2005-2

 

OWNERSHIP CERTIFICATE

 

The Ownership Certificate
does not represent an obligation of, or an interest in, the Depositor, the
Master Servicer, the Indenture Trustee, the Owner Trustee, the Trust
Administrator or any Affiliates of any of them and no recourse may be had
against any such parties or their assets, except as expressly set forth or
contemplated herein or in the Agreement or the other Operative Agreements.  In addition, this Ownership Certificate is
not guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect to the
Collateral, all as more specifically set forth herein.  A copy of the Agreement may be examined by
any Certificateholder upon written request during normal business hours at the
principal office of the Depositor and at such other places, if any, designated
by the Depositor.

 

The Agreement permits the
amendment thereof as specified below, provided that any amendment be
accompanied by an Opinion of Counsel to the effect that such amendment complies
with the provisions of the Agreement and would not cause the Trust to be
subject to an entity level tax.  If the
purpose of the amendment is to correct any mistake, eliminate any
inconsistency, cure any ambiguity or deal with any matter not covered, it shall
not be necessary to obtain the consent of any Noteholder or the Indenture
Trustee.  If the purpose of the amendment
is to add or eliminate or change any provision of the Agreement, other than as
specified in the preceding sentence, the amendment shall require the consent of
the Holder, the consent of Noteholders evidencing more than 662/3%
of the Outstanding Balance of the Notes and the Indenture Trustee; provided, however, that no such amendment
shall, as evidenced by an Opinion of Counsel, adversely affect the tax status
of the Trust; and provided, further,
that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on the
Collateral or distributions that shall be required to be made for the benefit
of the Noteholders or the Holder or (b) reduce the aforesaid percentage of
the Outstanding Balance of the Notes required to consent to or to waive the
requirement for the Holder to consent to any such amendment, in either case of
clause (a) or (b) without the consent of the holders of all the
outstanding Notes and the Holder.

 

As provided in the
Agreement and subject to certain limitations therein set forth, including the
limitations set forth in Section 3.03 thereof, the transfer of this
Ownership Certificate is registerable in the Certificate Register upon
surrender of this Ownership Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar, accompanied by a written
instrument of transfer in form satisfactory to the Certificate Registrar duly
executed by the Holder hereof or such Holder’s attorney duly authorized in
writing, and thereupon a new Ownership Certificate will be issued to the
designated transferee.  The initial
Certificate Registrar appointed under the Agreement is the Trust Administrator.

 

Except as provided in the
Agreement, the Ownership Certificate is issuable only in a minimum Percentage
Interest of 100%.  No service charge will
be made for any such registration of transfer or exchange, but the Owner
Trustee or the Certificate Registrar may require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith or any
expense incurred thereby.

 

A-7

 

The Owner Trustee, the
Certificate Paying Agent, the Trust Administrator, the Certificate Registrar
and any agent of the Owner Trustee, the Certificate Paying Agent, the Trust
Administrator or the Certificate Registrar may treat the Holder as the owner
hereof for all purposes, and none of the Owner Trustee, the Certificate Paying
Agent, the Trust Administrator, the Certificate Registrar or any such agent
shall be affected by any notice to the contrary.

 

The obligations and
responsibilities created by the Agreement and the Trust created thereby shall
terminate upon the payment to Certificateholders of all amounts required to be
paid to them pursuant to the Trust Agreement and the Transfer and Servicing
Agreement and the disposition of all property held as part of the Trust Estate.

 

A-8

 

ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and
assign(s) and transfer(s) unto

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

(Please print or type name and address, including
postal zip code, of assignee and social security number or employer
identification number)

 

	
   

  	
   

  
	
   

  	
   

  

 

the within Certificate stating in the names of the
undersigned in the Securities Register and does hereby irrevocably constitute
and appoint

 

	
   

  	
   

  
	
   

  	
   

  

 

to transfer such Certificate in such Securities
Register of the Trust.

 

I [we] further direct the Securities Registrar to
issue a new Certificate of the same Class of like principal to the above-named
assignee and deliver such Certificate to the following address:

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature by or on
  behalf of Assignor

  
	
   

  	
   

  	
   

  	
   

  
	
  Authorized Officer

  	
   

  	
   

  
	
   

  	
   

  	
  Signature
  Guaranteed

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name of Institution

  	
   

  	
  NOTICE: The
  signature(s) of this assignment must correspond with the name(s) on the face
  of this Certificate without alteration or any change whatsoever. The
  signature must be guaranteed by a participant in the Securities Transfer
  Agents Medallion Program, the New York Stock Exchange Medallion Signature
  Program or the Stock

  
							

 

A-9

 

	
   

  	
   

  	
  Exchanges Medallion
  Program. Notarized or witnessed signatures are not acceptable as guaranteed
  signatures.

  

 

 

 

A-10

 

DISTRIBUTION INSTRUCTIONS

 

The assignee should include the following for the
information of the Securities Registrar. 
Distributions shall be made by wire transfer in immediately available
funds to

 

	
   

  	
   

  
	
   

  	
   

  

 

for the account of 

 

	
   

  	
   

  

 

account number ___________________ or, if mailed by
check, to 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
			

 

Applicable reports and statements should be mailed to 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
			

 

	
  This
  information is provided by

  	
   

  

 

the assignee named above, or __________________________________
as its agent.

 

 

A-11

 

EXHIBIT B

 

[RESERVED]

 

B-1

 

EXHIBIT C

 

FORM OF CERTIFICATE OF TRUST OF

FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2005-2

 

THIS Certificate of Trust of Fieldstone Mortgage
Investment Trust, Series 2005-2 (the “Trust”), is being duly executed and
filed by the undersigned, as trustee, to form a statutory trust under the
Delaware Statutory Trust Act (12 DEL. CODE, Sections 3801 et seq.)
(the “Act”).

 

1.                                       NAME.   The name of the statutory trust formed
hereby is “FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2005-2.”

 

2.                                       DELAWARE
TRUSTEE.  The name and business address
of the trustee of the Trust in the State of Delaware are U.S. Bank Trust
National Association, 300 Delaware Avenue, Suite 813, Wilmington, Delaware
19801, Attention:  Corporate Trust.

 

3.                                       EFFECTIVE
DATE.  This Certificate of Trust shall be
effective on July [    ], 2005.

 

IN WITNESS WHEREOF, the undersigned, being the owner
trustee of the Trust, has executed this Certificate of Trust in accordance with
Section 3811(a) of the Act.

 

	
   

  	
  U.S. BANK TRUST NATIONAL ASSOCIATION,

  
	
   

  	
  as Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

C-1

 

EXHIBIT D-1

 

FORM OF RULE 144A INVESTMENT LETTER

 

 

                                   

Date

 

Wells Fargo Bank, N.A.,

  as
Certificate Registrar

6th Street and Marquette Avenue

Minneapolis, Minnesota 55479

 

Attention: 
Corporate Trust Department

 

	
  Re:

  	
  Fieldstone Mortgage Investment
  Trust, Series 2005-2

  
	
   

  	
  [Ownership Certificate]

  	
   

  

 

Ladies and Gentlemen:

 

In connection with our acquisition of the Fieldstone
Mortgage Investment Trust, Series 2005-2 Ownership Certificate (the “Certificate”),
we certify that (a) we understand that the Certificate has not been
registered under the Securities Act of 1933, as amended (the “Act”), or any state
securities laws and is being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investment in the
Certificate, (c) we have had the opportunity to ask questions of and
receive answers from Fieldstone Mortgage Investment Corporation (the “Depositor”)
concerning the purchase of the Certificate and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificate, (d) we have not, nor has anyone acting on our behalf,
offered, transferred, pledged, sold or otherwise disposed of the Certificate or
any interest in the Certificate, or solicited any offer to buy, transfer,
pledge or otherwise dispose of the Certificate or any interest in the
Certificate from any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action
that would constitute a distribution of the Certificate under the Act or that
would render the disposition of the Certificate a violation of Section 5
of the Act or any state securities laws or require registration pursuant thereto,
and we will not act, or authorize any person to act, in such manner with
respect to the Certificate and (e) we are a “qualified institutional buyer”
as that term is defined in Rule 144A under the Act (“Rule 144A”).  We are aware that the sale to us is being
made in reliance on Rule 144A.

 

We are acquiring the Certificate for our own account
or for resale pursuant to Rule 144A and understand that such Certificate
may be resold, pledged or transferred only (1) 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

 

D-1-1

 

transfer is being made in
reliance on Rule 144A or (2) pursuant to another exemption from
registration under the Act.

 

In addition, we hereby certify that we are not an
employee benefit plan or other retirement arrangement that is subject to Section 406
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
or to Section 4975 of the Internal Revenue Code of 1986, as amended (or to
any other substantially similar law) or any entity deemed to hold the plan
assets of the foregoing.

 

We hereby acknowledge that under the terms of the
Amended and Restated Trust Agreement among Fieldstone Mortgage Investment
Corporation, as Depositor, U.S. Bank Trust National Association, as Owner
Trustee, and Wells Fargo Bank, N.A., as Trust Administrator, dated as of August 4,
2005, no transfer of the Certificate shall be permitted to be made to any
person unless the Certificate Registrar has received a certificate from such
transferee in the form hereof.

 

We hereby indemnify the Depositor, Certificate
Registrar and the Owner Trustee against any liability that may result to either
of them if our transfer or other disposition of the Certificate (or any
interest therein) is not exempt from the registration requirements of the Act
and any applicable state securities laws or is not made in accordance with such
federal and state laws.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

D-1-2

 

EXHIBIT D-2

 

FORM OF NON-RULE 144A INVESTMENT LETTER

 

                                   

Date

 

Wells Fargo Bank, N.A.,

  as
Certificate Registrar

6th Street and Marquette Avenue

Minneapolis, Minnesota 55479

 

Attention: 
Corporate Trust Department

 

	
  Re:

  	
  Fieldstone Mortgage Investment
  Trust, Series 2005-2

  
	
   

  	
  [Ownership Certificate]

  	
   

  

 

Ladies and Gentlemen:

 

In connection with our acquisition of the Fieldstone
Mortgage Investment Trust, Series 2005-2 Ownership Certificate (the “Certificate”)
we certify that (a) we understand that the Certificate has not been
registered under the Securities Act of 1933, as amended (the “Act”), or any
state securities laws and is being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
are an “accredited investor,” as defined in Rule 501(a)(1), (2), (3) or
(7) under the Act, and have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
investment in the Certificate, (c) we have had the opportunity to ask
questions of and receive answers from the Depositor concerning the purchase of
the Certificate and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Certificate, (d) we are
acquiring the Certificate for investment for our own account and not with a
view to any distribution of such Certificate (but without prejudice to our
right at all times to sell or otherwise dispose of the Certificate in
accordance with clause (f) below), (e) we have not offered or sold
any Certificate to, or solicited offers to buy any Certificate from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action that would result in a violation of Section 5
of the Act or any state securities laws and (f) we will not sell, transfer
or otherwise dispose of any Certificate unless (1) such sale, transfer or
other disposition is made pursuant to an effective registration statement under
the Act and in compliance with any relevant state securities laws or is exempt
from such registration requirements and, if requested, we will at our expense
provide an opinion of counsel satisfactory to the addressees of this
certificate that such sale, transfer or other disposition may be made pursuant
to an exemption from the Act, (2) the purchaser or transferee of such
Certificate has executed and delivered to you a certificate to substantially
the same effect as this certificate and (3) the purchaser or transferee
has otherwise complied with any conditions for transfer set forth in the
Amended and Restated Trust Agreement dated as of August 4, 2005, among
Fieldstone

 

D-2-1

 

Mortgage Investment
Corporation, as Depositor, U.S. Bank Trust National Association, as Owner
Trustee and Wells Fargo Bank, N.A., as Trust Administrator (the “Trust
Agreement”).

 

In addition, we hereby certify that we are not an
employee benefit plan or other retirement arrangement subject to section 406
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
or to Section 4975 of the Internal Revenue Code of 1986, as amended (or to
any other substantially similar law) or any entity deemed to hold the plan
assets of the foregoing.

 

We hereby acknowledge that under the terms of the
Trust Agreement, no transfer of the Certificate shall be permitted to be made
to any person unless the Certificate Registrar has received a certificate from
such transferee in the form hereof.

 

We hereby indemnify the Owner Trustee, the Depositor
and the Certificate Registrar against any liability that may result to either
of them if our transfer or other disposition of the Certificate (or any
interest therein) is not exempt from the registration requirements of the Act
and any applicable state securities laws or is not made in accordance with such
federal and state laws.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

D-2-2

 

EXHIBIT E

 

U.S. Bank Trust National
Association

300 Delaware Avenue, Suite 813

Wilmington, Delaware
19801

Attention:  Fieldstone 2005-2

 

Wells Fargo Bank, N.A.

9062 Old Annapolis Road

Columbia, Maryland 21045

Attention: 
Fieldstone 2005-2

 

Re:  Fieldstone Mortgage Investment Trust, Series 2005-2

 

Ladies and Gentlemen:

 

This representation and warranty is delivered pursuant
to Section 3.03 of the Amended and Restated Trust Agreement dated as of August 4,
2005 (the “Agreement”), among Fieldstone Mortgage Investment Corporation, as
depositor (the “Depositor”), U.S. Bank Trust National Association, as owner
trustee (the “Owner Trustee”), and Wells Fargo Bank, N.A., as trust
administrator (the “Trust Administrator”), in connection with the transfer by
Fieldstone Mortgage Investment Trust, Series 2005-2 (the “Trust”) to the
undersigned as beneficial owner (the “Beneficial Owner”) of a 100% Percentage
Interest in the Ownership Certificate. Capitalized terms used but not defined
in this document have the meanings ascribed to them in the Agreement.

 

The Beneficial Owner hereby certifies that it has
received a copy of the Agreement and that it understands the restrictions on
transferability of the Ownership Certificate and the indemnity provisions set
forth in Section 3.03 of the Agreement. 
In connection with the transfer of the Ownership Certificate to the
Beneficial Owner, the Beneficial Owner represents and warrants that:

 

(1)                                  The
Beneficial Owner either (i) qualifies for taxation as a real estate
investment trust (a “REIT”) within the meaning of Sections 856 and 857 of the
Internal Revenue Code of 1986, as amended (the “Code”), (ii) is a
qualified REIT subsidiary within the meaning of Section 856(i) of the
Code (a “Qualified REIT Subsidiary”), or (iii) is an entity that is
disregarded for federal income tax purposes that is wholly owned by a REIT or a
Qualified REIT Subsidiary.

 

(2)                                  The
Beneficial Owner hereby agrees to be subject to the indemnification provisions
set out in Section 3.03 of the Agreement.

 

(3)                                  The
Beneficial Owner hereby agrees to be subject to the provisions governing events
of default set out in the Indenture among the Trust, as issuer, Wells Fargo
Bank, N.A., as Trust Administrator, and HSBC Bank USA, National Association, as
Indenture Trustee, dated as of July 1, 2005.

 

E-1

 

(4)                                  The
Beneficial Owner hereby agrees to notify the Trust within sixty (60) days of
the date on which the Beneficial Owner discovers that it has failed to qualify
as a REIT, a Qualified REIT Subsidiary or an entity that is disregarded for
federal income tax purposes that is wholly owned by a REIT or a Qualified REIT
Subsidiary at any time at which the Beneficial Owner owns the Ownership
Certificate.

 

(5)                                  The
Beneficial Owner is not, and on August 4, 2005, will not be, an employee
benefit plan or other retirement arrangement subject to Section 406 of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or Section 4975
of the Code or any substantially similar applicable law (collectively, a “Plan”)
or a person acting on behalf of any such Plan or investing the assets of any
such Plan to acquire the Ownership Certificate.

 

(6)                                  The
Beneficial Owner hereby acknowledges that under the terms of the Agreement, no
transfer of the Ownership Certificate shall be permitted to be made to any
person unless the Certificate Registrar has received a certificate from such
transferee to the effect that such transferee is not a Plan and is not using
the assets of any Plan to acquire the Ownership Certificate.

 

(7)                                  The
Beneficial Owner will not transfer the Ownership Certificate to any person or
entity (i) as to which the Purchaser has reason to believe does not
satisfy the requirements set forth in this affidavit, and (ii) without
obtaining from the prospective Purchaser an affidavit substantially in this
form and providing to the Certificate Registrar a written statement
substantially in the form of Exhibit F to the Agreement.

 

(8)                                  The
Holder of the Ownership Certificate will not take any action or inaction that
would cause the Trust to be subject to any United States federal income
taxation.

 

[SIGNATURE PAGE FOLLOWS]

 

E-2

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  FIELDSTONE MORTGAGE OWNERSHIP

  CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

E-3

 

EXHIBIT F

 

FORM OF REPRESENTATION AND WARRANTY REGARDING TRANSFEREE’S

STATUS AS A REIT OR QUALIFIED REIT SUBSIDIARY

 

This representation and warranty is delivered pursuant
to Section 3.03 of the Trust Agreement dated as of August 4, 2005
(the “Agreement”), among Fieldstone Mortgage Investment Corporation, as
depositor (the “Depositor”), U.S. Bank Trust National Association, as owner
trustee (the “Owner Trustee”), and Wells Fargo Bank, N.A., as trust
administrator (the “Trust Administrator”), in connection with the transfer by
[Fieldstone Mortgage Investment Trust, Series 2005-2 (the “Trust”), to the
undersigned] [the [transferor] to the undersigned] as beneficial owner (the “Beneficial
Owner”) of a 100% Percentage Interest in the Ownership Certificate.  Capitalized terms used but not defined in
this document have the meanings ascribed to them in the Agreement.

 

The Beneficial Owner hereby certifies that it has
received a copy of the Agreement and that it understands the restrictions on
transferability of the Ownership Certificate set forth in Section 3.03 of
the Agreement and the indemnity provisions set forth in Section 7.02 of
the Agreement.  In connection with the
transfer of the Ownership Certificate to the Beneficial Owner, the Beneficial
Owner represents and warrants that:

 

(1)                                  The
Beneficial Owner either (i) qualifies for taxation as a real estate
investment trust (a “REIT”) within the meaning of Sections 856 and 857 of the
Internal Revenue Code of 1986, as amended (the “Code”), (ii) is a
qualified REIT subsidiary within the meaning of Section 856(i) of the
Code (a “Qualified REIT Subsidiary”), or (iii) an entity that is
disregarded for federal income tax purposes that is wholly owned by a REIT or a
Qualified REIT Subsidiary.

 

(2)                                  The
Beneficial Owner hereby agrees to be subject to the indemnification provisions
set out in Section 7.02 of the Agreement, and hereby warrants that the
Beneficial Owner shall indemnify the Trust for any income tax imposed upon the
Trust due to the Beneficial Owner’s failure to qualify as a REIT, a Qualified
REIT Subsidiary, or an entity that is disregarded for federal income tax
purposes that is wholly owned by a REIT or a Qualified REIT Subsidiary at any
time at which such Beneficial Owner owns the Ownership Certificate.

 

(3)                                  The
Beneficial Owner hereby agrees to be subject to the provisions governing events
of default set out in the Indenture among Fieldstone Mortgage Investment Trust,
Series 2005-2 (the “Trust”), as issuer, Wells Fargo Bank, N.A., as trust
administrator and HSBC Bank USA, National Association, as indenture trustee,
dated as of July 1, 2005.

 

(4)                                  The
Beneficial Owner hereby agrees to notify the Trust within sixty (60) days of
the date on which the Beneficial Owner discovers that it has failed to qualify
as a REIT, a Qualified REIT Subsidiary, or an entity that is disregarded for
federal income tax purposes that is wholly owned by a REIT or a Qualified REIT

 

F-1

 

Subsidiary at any time at which the Beneficial Owner owns the Ownership
Certificate.

 

(5)                                  The
Beneficial Owner is not, and on               
[date of transfer] will not be, an employee benefit plan or other retirement
arrangement subject to Section 406 of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or Section 4975 of the Code or
any substantially similar applicable law (collectively, a “Plan”) or a person
acting on behalf of any such Plan or investing the assets of any such Plan to
acquire the Ownership Certificate.

 

(6)                                  The
Beneficial Owner hereby acknowledges that under the terms of the Agreement, no
transfer of the Ownership Certificate shall be permitted to be made to any
person unless the Certificate Registrar has received a certificate from such
transferee to the effect that such transferee (i) is not a Plan and is not
using the assets of any Plan to acquire the Ownership Certificate and (ii) is
a REIT, a Qualified REIT Subsidiary or an entity that is disregarded for
federal income tax purposes that is wholly owned by a REIT or a Qualified REIT
Subsidiary.

 

(7)                                  The
Beneficial Owner will not transfer the Ownership Certificate to any person or
entity (i) as to which the Purchaser has reason to believe does not
satisfy the requirements set forth in this affidavit, and (ii) without
obtaining from the prospective Purchaser an affidavit substantially in this
form and providing to the Certificate Registrar a written statement
substantially in the form of Exhibit F to the Agreement.

 

(8)                                  The
Holder of the Ownership Certificate will not take any action or inaction that
would cause the Trust to be subject to any United States federal income
taxation.

 

F-2

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