Document:

Exhibit
4.5

 

FIELDSTONE MORTGAGE INVESTMENT
CORPORATION,

as Depositor,

 

 

[                              ],

as Master Servicer and Trust Administrator,

 

 

FIELDSTONE MORTGAGE COMPANY,

as Seller,

 

 

and

 

 

[                              ],

 

 

as Trustee

 

 

TRUST AGREEMENT

 

Dated as of [            ], 2005

 

 

 

FIELDSTONE MORTGAGE INVESTMENT
TRUST 2005-[     ]

MORTGAGE-BACKED CERTIFICATES
SERIES 2005-[     ]

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Definitions

  	
   

  
	
  Section 1.02

  	
  Calculations
  Respecting Mortgage Loans

  	
   

  
	
  Section 1.03

  	
  Calculations
  Respecting Accrued Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  DECLARATION OF TRUST; ISSUANCE OF
  CERTIFICATES

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Creation
  and Declaration of Trust Fund: Conveyance of Mortgage Loans

  	
   

  
	
  Section 2.02

  	
  Acceptance
  of Trust Fund by Trustee: Review of Documentation for Trust Fund

  	
   

  
	
  Section 2.03

  	
  Representations
  and Warranties of the Depositor and the Seller

  	
   

  
	
  Section 2.04

  	
  Discovery
  of Breach

  	
   

  
	
  Section 2.05

  	
  Repurchase,
  Purchase or Substitution of Mortgage Loans

  	
   

  
	
  Section 2.06

  	
  Grant
  Clause

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  	
   

  
	
  THE CERTIFICATES

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  The
  Certificates

  	
   

  
	
  Section 3.02

  	
  Registration

  	
   

  
	
  Section 3.03

  	
  Transfer
  and Exchange of Certificates

  	
   

  
	
  Section 3.04

  	
  Cancellation
  of Certificates

  	
   

  
	
  Section 3.05

  	
  Replacement
  of Certificates

  	
   

  
	
  Section 3.06

  	
  Persons
  Deemed Owners

  	
   

  
	
  Section 3.07

  	
  Temporary
  Certificates

  	
   

  
	
  Section 3.08

  	
  Appointment
  of Paving Agent

  	
   

  
	
  Section 3.09

  	
  Book-Entry
  Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  ADMINISTRATION OF THE TRUST FUND

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Collection
  Account

  	
   

  
	
  Section 4.02

  	
  Application
  of Funds in the Collection Account

  	
   

  
	
  Section 4.03

  	
  Reports
  to Certificateholders

  	
   

  

 

i

 

	
  ARTICLE V

  
	
   

  
	
  DISTRIBUTIONS TO HOLDERS OF CERTIFICATES

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Distributions
  Generally

  	
   

  
	
  Section 5.02

  	
  Distributions
  from the Collection Account

  	
   

  
	
  Section 5.03

  	
  Allocation
  of Losses

  	
   

  
	
  Section 5.04

  	
  Advances
  by Master Servicer, Servicer, Subservicer and Trust Administrator

  	
   

  
	
  Section 5.05

  	
  Compensating
  Interest Payments

  	
   

  
	
  Section 5.06

  	
  Basis
  Risk Reserve Fund

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  CONCERNING THE TRUSTEE AND THE TRUST
  ADMINISTRATOR; EVENTS OF DEFAULT

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Duties
  of Trustee and Trust Administrator

  	
   

  
	
  Section 6.02

  	
  Certain
  Matters Affecting the Trustee and the Trust Administrator

  	
   

  
	
  Section 6.03

  	
  Trustee
  and Trust Administrator Not Liable for Certificates

  	
   

  
	
  Section 6.04

  	
  Trustee
  and the Trust Administrator May Own Certificates

  	
   

  
	
  Section 6.05

  	
  Eligibility
  Requirements for Trustee and Trust Administrator

  	
   

  
	
  Section 6.06

  	
  Resignation
  and Removal of Trustee and the Trust Administrator

  	
   

  
	
  Section 6.07

  	
  Successor
  Trustee and Successor Trust Administrator

  	
   

  
	
  Section 6.08

  	
  Merger
  or Consolidation of Trustee or the Trust Administrator

  	
   

  
	
  Section 6.09

  	
  Appointment
  of Co-Trustee, Separate Trustee or Custodian

  	
   

  
	
  Section 6.10

  	
  Authenticating
  Agents

  	
   

  
	
  Section 6.11

  	
  Indemnification
  of Trustee and Trust Administrator

  	
   

  
	
  Section 6.12

  	
  Fees
  and Expenses of Trust Administrator, Trustee and Custodian

  	
   

  
	
  Section 6.13

  	
  Collection
  of Monies

  	
   

  
	
  Section 6.14

  	
  Events
  of Default; Trustee To Act; Appointment of Successor

  	
   

  
	
  Section 6.15

  	
  Additional
  Remedies of Trustee Upon Event of Default

  	
   

  
	
  Section 6.16

  	
  Waiver
  of Defaults

  	
   

  
	
  Section 6.17

  	
  Notification
  to Holders

  	
   

  
	
  Section 6.18

  	
  Directions
  by Certificateholders and Duties of Trustee During Event of Default

  	
   

  
	
  Section 6.19

  	
  Action
  Upon Certain Failures of the Master Servicer and Upon Event of Default

  	
   

  
	
  Section 6.20

  	
  Preparation
  of Tax Returns and Other Reports

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  
	
  PURCHASE OF MORTGAGE LOANS AND TERMINATION
  OF THE TRUST FUND

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Purchase
  of Mortgage Loans; Termination of Trust Fund Upon Purchase or Liquidation of
  All Mortgage Loans

  	
   

  
	
  Section 7.02

  	
  Procedure
  Upon Termination of Trust Fund

  	
   

  
	
  Section 7.03

  	
  Additional
  Trust Fund Termination Requirements

  	
   

  
	
  Section 7.04

  	
  Optional
  Repurchase Right

  	
   

  

 

ii

 

	
  ARTICLE VIII

  
	
   

  
	
  RIGHTS OF CERTIFICATEHOLDERS

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Limitation
  on Rights of Holders

  	
   

  
	
  Section 8.02

  	
  Access
  to List of Holders

  	
   

  
	
  Section 8.03

  	
  Acts
  of Holders of Certificates

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  
	
  ADMINISTRATION AND SERVICING OF MORTGAGE
  LOANS BY THE MASTER SERVICER

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Duties
  of the Master Servicer

  	
   

  
	
  Section 9.02

  	
  Master
  Servicer Fidelity Bond and Master Servicer Errors and Omissions Insurance
  Policy

  	
   

  
	
  Section 9.03

  	
  Master
  Servicer’s Financial Statements and Related Information

  	
   

  
	
  Section 9.04

  	
  Power
  to Act; Procedures

  	
   

  
	
  Section 9.05

  	
  Enforcement
  of Servicer’s and Master Servicer’s Obligations

  	
   

  
	
  Section 9.06

  	
  Termination
  of the Servicing Agreement; Successor Servicers

  	
   

  
	
  Section 9.07

  	
  Master
  Servicer Liable for Enforcement

  	
   

  
	
  Section 9.08

  	
  No
  Contractual Relationship Between the Servicer, the Subservicer and Trustee or
  Depositor

  	
   

  
	
  Section 9.09

  	
  Assumption
  of Servicing Agreement by Trust Administrator

  	
   

  
	
  Section 9.10

  	
  Due-on-Sale
  Clauses; Assumption Agreements

  	
   

  
	
  Section 9.11

  	
  Release
  of Mortgage Files

  	
   

  
	
  Section 9.12

  	
  Documents,
  Records and Funds in Possession of Master Servicer To Be Held for Trustee

  	
   

  
	
  Section 9.13

  	
  Representations
  and Warranties of the Master Servicer

  	
   

  
	
  Section 9.14

  	
  Opinion

  	
   

  
	
  Section 9.15

  	
  Standard
  Hazard and Flood Insurance Policies

  	
   

  
	
  Section 9.16

  	
  Presentment
  of Claims and Collection of Proceeds

  	
   

  
	
  Section 9.17

  	
  [Reserved]

  	
   

  
	
  Section 9.18

  	
  Trustee
  To Retain Possession of Certain Insurance Policies and Documents

  	
   

  
	
  Section 9.19

  	
  [Reserved]

  	
   

  
	
  Section 9.20

  	
  Compensation
  to the Master Servicer

  	
   

  
	
  Section 9.21

  	
  REO
  Property

  	
   

  
	
  Section 9.22

  	
  [Reserved]

  	
   

  
	
  Section 9.23

  	
  Reports
  to the Trustee

  	
   

  
	
  Section 9.24

  	
  Annual
  Officer’s Certificate as to Compliance

  	
   

  
	
  Section 9.25

  	
  Annual
  Independent Accountants’ Servicing Report

  	
   

  
	
  Section 9.26

  	
  Merger
  or Consolidation

  	
   

  
	
  Section 9.27

  	
  Resignation
  of Master Servicer

  	
   

  
	
  Section 9.28

  	
  Assignment
  or Delegation of Duties by the Master Servicer

  	
   

  
	
  Section 9.29

  	
  Limitation
  on Liability of the Master Servicer and Others

  	
   

  
	
  Section 9.30

  	
  Indemnification;
  Third-Party Claims

  	
   

  
	
  Section 9.31

  	
  Special
  Servicing of Delinquent Mortgage Loans

  	
   

  

 

iii

 

	
  Section 9.32

  	
  Alternative
  Index

  	
   

  
	
  Section 9.33

  	
  [Reserved]

  	
   

  
	
  Section 9.34

  	
  [Reserved]

  	
   

  
	
  Section 9.35

  	
  [Reserved]

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
   

  
	
  REMIC ADMINISTRATION

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  REMIC Administration

  	
   

  
	
  Section 10.02

  	
  Prohibited Transactions and Activities

  	
   

  
	
  Section 10.03

  	
  Indemnification with Respect to Certain Taxes and Loss of REMIC
  Status

  	
   

  
	
  Section 10.04

  	
  REO Property

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  
	
   

  
	
  MISCELLANEOUS PROVISIONS

  
	
   

  	
   

  	
   

  
	
  Section 11.01

  	
  Binding Nature of Agreement; Assignment

  	
   

  
	
  Section 11.02

  	
  Entire Agreement

  	
   

  
	
  Section 11.03

  	
  Amendment

  	
   

  
	
  Section 11.04

  	
  Voting Rights

  	
   

  
	
  Section 11.05

  	
  Provision of Information

  	
   

  
	
  Section 11.06

  	
  Governing Law

  	
   

  
	
  Section 11.07

  	
  Notices

  	
   

  
	
  Section 11.08

  	
  Severability of Provisions

  	
   

  
	
  Section 11.09

  	
  Indulgences; No Waivers

  	
   

  
	
  Section 11.10

  	
  Headings Not To Affect Interpretation

  	
   

  
	
  Section 11.11

  	
  Benefits of Agreement

  	
   

  
	
  Section 11.12

  	
  Special Notices to the Rating Agencies and
  any NIMS Insurer

  	
   

  
	
  Section 11.13

  	
  Conflicts

  	
   

  
	
  Section 11.14

  	
  Counterparts

  	
   

  
	
  Section 11.15

  	
  Transfer of Servicing

  	
   

  
	
  Section 11.16

  	
  Option to Contribute Derivative Instrument

  	
   

  
	
  Section 11.17

  	
  Ability to Exercise Discretion with Respect
  to Defaulted Loans

  	
   

  

 

iv

 

	
  ATTACHMENTS

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Forms of Certificates

  	
   

  
	
  Exhibit B-1

  	
  Form of Initial Certification

  	
   

  
	
  Exhibit B-2

  	
  Form of Interim Certification

  	
   

  
	
  Exhibit B-3

  	
  Form of Final Certification

  	
   

  
	
  Exhibit B-4

  	
  Form of Endorsement

  	
   

  
	
  Exhibit C

  	
  Request for Release of Documents and
  Receipt

  	
   

  
	
  Exhibit D-1

  	
  Form of Residual Certificate Transfer
  Affidavit (Transferee)

  	
   

  
	
  Exhibit D-2

  	
  Form of Residual Certificate Transfer
  Affidavit (Transferor)

  	
   

  
	
  Exhibit E

  	
  Form of Lost Note Affidavit

  	
   

  
	
  Exhibit F

  	
  Form of Rule 144A Transfer
  Certificate

  	
   

  
	
  Exhibit G

  	
  Form of Purchaser’s Letter for
  Institutional Accredited Investors

  	
   

  
	
  Exhibit H

  	
  Form of ERISA Transfer Affidavit

  	
   

  
	
  Exhibit I

  	
  Monthly Remittance Advice

  	
   

  
	
  Exhibit J

  	
  Monthly Electronic Data Transmission

  	
   

  
	
  Exhibit K

  	
  Custodial Agreement

  	
   

  
	
  Exhibit L

  	
  [Reserved]

  	
   

  
	
  Exhibit M

  	
  [Reserved]

  	
   

  
	
  Exhibit N-1

  	
  [Reserved]

  	
   

  
	
  Exhibit N-2

  	
  [Reserved]

  	
   

  
	
  Exhibit O

  	
  [Reserved]

  	
   

  
	
  Exhibit P

  	
  Interest Rate Cap Agreement

  	
   

  
	
  Schedule A

  	
  Mortgage Loan Schedule (by Mortgage
  Pool)

  	
   

  

 

v

 

This TRUST
AGREEMENT, dated as of [      ], 2005 (the “Agreement”),
is by and among FIELDSTONE MORTGAGE INVESTMENT CORPORATION, a Maryland
corporation, as depositor (the “Depositor”), [      ],
as trustee (the “Trustee”), FIELDSTONE MORTGAGE COMPANY, as seller (the “Seller”)
and [      ], as trust administrator (the “Trust
Administrator”) and as master servicer (the “Master Servicer”).

 

PRELIMINARY STATEMENT

 

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

 

As provided
herein, the Trustee shall elect that the Trust Fund (exclusive of (i) the
Basis Risk Reserve Fund, (ii) the Basis Risk Cap and (iii) the Class X
Cap) be treated for federal income tax purposes as comprising four real estate
mortgage investment conduits (each a “REMIC” or, in the alternative, REMIC 1,
REMIC 2, REMIC 3 and REMIC 4; REMIC 4 also being referred to as the “Upper Tier
REMIC”).  Each Certificate, other than
the Class X Certificate and Class R Certificate, represents ownership
of a regular interest in the Upper Tier REMIC for purposes of the REMIC
Provisions.  The Class X Certificate
represents ownership of two regular interests in the Upper Tier REMIC as
described in note 11 of the table below for such REMIC.  In addition, each Certificate, other than the
Class R, Class A-IO, and Class X Certificates, represents the
right to receive payments with respect to any Basis Risk Shortfalls and Unpaid
Basis Risk Shortfalls from the Basis Risk Reserve Fund pursuant to Section 5.06.  The Class R Certificate represents
ownership of the sole Class of residual interest in each of REMIC 1, REMIC
2, REMIC 3 and the Upper Tier REMIC for purposes of the REMIC Provisions.

 

The Upper Tier
REMIC shall hold as its assets the several Classes of uncertificated Lower Tier
Interests in REMIC 3, and each such Lower Tier Interest is hereby designated as
a regular interest in REMIC 3 for purposes of the REMIC Provisions.  REMIC 3 shall hold as its assets the several
Classes of uncertificated Lower Tier Interests in REMIC 2, and each such Lower
Tier Interest is hereby designated as a regular interest in REMIC 2.  REMIC 2 shall hold as its assets the several
Classes of uncertificated Lower Tier Interests in REMIC 1, and each such Lower
Tier Interest is hereby designated as a regular interest in REMIC 1.  REMIC 1 shall hold as its assets the property
of the Trust Fund other than the Lower Tier Interests in REMIC 1, REMIC 2 and
REMIC 3, the Basis Risk Reserve Fund, the Basis Risk Cap, and the Class X
Cap.

 

 

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

 

For purposes
of construing the terms of REMIC 1, REMIC 2, REMIC 3, and REMIC 4, and for
purposes of the interpreting the provisions of the Agreement concerning REMIC
administration set forth in Article X hereof, the following terms have the
meanings set forth below.

 

Adjusted Lower
Tier WAC:  For
any Distribution Date (and the related Accrual Period), the product of (i) four,
multiplied by (ii) the weighted
average of the interest rates for such Distribution Date for the Class LT3-l-A,
Class LT3-2-A1, Class LT3-2-A2, LT3-M1, Class LT3-M2, Class LT3-M3,
Class LT3-M4, Class LT3-M5, Class LT3-B, Class LT3-Pool-i-PSA,
Class LT3-Pool-1-N, Class LT3-Pool-2-PSA, Class LT3-Pool-2-N,
and Class LT3-Q Interests, determined for this purpose by first subjecting
the rate payable on the Class LT3-Pool-1-PSA, Class LT3-Pool-l-N, Class LT3-Pool-2-PSA,
Class LT3-Pool-2-N, and Class LT3-Q Interests to a cap of zero, and
subjecting the rate payable on the Class LT3- 1-A, Class LT3-2-A1, Class LT3-2-A2,
Class LT3-M1, Class LT3-M2, Class LT3-M3, Class LT3-M4, Class LT3-M5,
and Class LT3-B Interests to a cap that corresponds to the Certificate
Interest Rate for the Corresponding Class of Certificates for such
Distribution Date.

 

ARM Discount
Loan:  Any
Adjustable Rate Mortgage Loan with a minimum Net Mortgage Rate of less than [      ]%.

 

ARM Discount
Rate: With respect to any ARM Discount Loan and any
Distribution Date occurring on or before the Distribution Date in [      ],
2005, the product of (i) the Net Mortgage Rate as of the beginning of the
related Due Period multiplied by (ii) a
fraction, the numerator of which is the Scheduled Principal Balance of such ARM
Discount Loan for such Distribution Date, and the denominator of which is the
Non-PO Portion of such ARM Discount Loan for such Distribution Date.

 

Corresponding
Class:  The Class of
Certificates that corresponds to a class of Lower Tier Interests in REMIC 3 as
described in the Preliminary Statement.

 

Corresponding
REMIC 3 IO: 
With respect to each Lower Tier Interest in REMIC 2 having an “AIO-1” in
its class designation, the class of Lower Tier Interest in REMIC 3 having an “AIO-1”
in its class designation that has the same numeric designation.  With respect to each Lower Tier Interest in
REMIC 2 having an “AIO-2” in its class designation, the class of Lower Tier
Interest in REMIC 3 having an “AIO-2” in its class designation that has the
same numeric designation.

 

Discount Loan:  Any Fixed Rate Discount Loan or ARM Discount
Loan.  (Any Qualified Substitute Mortgage
Loan shall be deemed to be a Fixed Rate Discount Loan, ARM Discount Loan, or
Non-Discount Loan if the Mortgage Loan for which it was substituted was so
treated.)

 

Fixed Rate
Discount Loan: 
Any Fixed Rate Mortgage Loan with a Net Mortgage Rate of less than [      ]%.

 

2

 

Non-Discount
Loan:  Any
Mortgage Loan that is not a Discount Loan.

 

Non-PO
Percentage: With respect to any Discount Loan, the
excess of 100% over the PO Percentage for such Discount Loan.

 

Non-PO Portion:
With respect to any Discount Loan and any Distribution Date, the excess of the
Scheduled Principal Balance of such Discount Loan over the PO Portion of such
Discount Loan for such date.

 

Non-PO
Principal Distribution Amount:  For each Distribution Date and each Discount
Loan, the product of (i) the sum of (a) the Scheduled Payment of
principal with respect to such Discount Loan for the related Due Period, and (b) all
other payments that resulted in a reduction of the Scheduled Principal Balance
of such Discount Loan during the related Prepayment Period, multiplied by (ii) the Non-PO Percentage for such
Discount Loan.

 

PO Percentage:  In the case of any Fixed Rate Discount Loan,
a percentage equal to a fraction, the numerator of which is the difference
between [      ]% minus
the Net Mortgage Rate for such Fixed Rate Discount Loan, and the denominator of
which is [      ]%.  In the case of any ARM Discount Loan, a
percentage equal to a fraction, the numerator of which is the difference between
[      ]% minus the
minimum Net Mortgage Rate for such ARM Discount Loan, and the denominator of
which is [      ]%.

 

PO Portion:  In the case of a Discount Loan and any date (i) the
Scheduled Principal Balance of such Discount Loan for such date multiplied by (ii) the PO Percentage for such Discount
Loan.

 

PO Principal
Distribution Amount: 
For each Distribution Date and each Discount Loan, the product of (i) the
sum of (a) the Scheduled Payment of principal with respect to such
Discount Loan for the related Due Period, and (b) all other payments that
resulted in a reduction of the Scheduled Principal Balance of such Discount
Loan during the related Prepayment Period, multiplied by (ii) the
PO Percentage for such Discount Loan.

 

REMIC Capped
Rate: With respect to any REMIC Capped Distribution
Date and: (i) any of the Class 1-A, Class 2-Al, Class 2-A2 Class M1,
Class M2, Class M3, Class M4, Class M5, Class B
Certificates, a per annum rate of zero; (ii) the A-IO(1) Component, a
per annum rate equal to the product of 6.00%, and a fraction, the numerator of
which is the aggregate of the notional balances of the LT3-1-AIO-1, Class LT3-2-AIO-l,
and Class LT3-3-AIO-1 Lower Tier Interests, and the denominator of which
is the Component Notional Amount for the A-IO(1) Component for such date; (iii) the
A-IO(2) Component, a per annum rate equal to the product of 6.00%, and a
fraction, the numerator of which is the aggregate of the notional balances of
the LT3-l-AIO-2, Class LT3-2-AIO-2, and Class LT3-3-AIO-2 Lower Tier
Interests, and the denominator of which is the Component Notional Amount for
the A-IO(2) Component for such date.

 

REMIC Capped
Distribution Date: 
Any Distribution Date: (i) that is (a) on or before the
Distribution Date in [      ], 2005, and for which
(b) the Class Principal Amount of the Class LT2-l-AIO-l or Class LT2-l-AIO-2
Interest as of the first day of the related Accrual Period is less than its
initial Class Principal Amount; (ii) that is (a) on or before
the Distribution Date in

 

3

 

September 2004, and for which (b) the Class Principal
Amount of the Class LT2-2-AIO-l or Class LT2-2-AIO-2 Interest as of
the first day of the related Accrual Period is less than its initial Class Principal
Amount; or (iii) that is (a) on or before the Distribution Date in March 2005,
and for which (b) the Class Principal Amount of the Class LT2-3-AIO-l
or Class LT2-3-AIO-2 Interest as of the first day of the related Accrual
Period is less than its initial Class Principal Amount.

 

4

 

REMIC 1

 

REMIC 1 shall
issue the following interests, with the related Class designations,
interest rates, and initial Class Principal Amounts.

 

	
  REMIC 1
  Lower

  Tier Class Designation

  	
   

  	
  REMIC 1 Lower

  Tier Interest Rate

  	
   

  	
  Initial Class

  Class Principal Amount

  	
   

  
	
  Class LT1-Fixed Discount-1

  	
   

  	
  (1)

  	
   

  	
  (2)

  	
   

  
	
  Class LT1-ARM Discount-1

  	
   

  	
  (3)

  	
   

  	
  (4)

  	
   

  
	
  Class LT1-PO-1

  	
   

  	
  (5)

  	
   

  	
  (6)

  	
   

  
	
  Class LT1-Non-Discount-1

  	
   

  	
  (7)

  	
   

  	
  (8)

  	
   

  
	
  Class LT1 -Fixed Discount-2

  	
   

  	
  (9)

  	
   

  	
  (10)

  	
   

  
	
  Class LT1-ARM Discount-2

  	
   

  	
  (11)

  	
   

  	
  (12)

  	
   

  
	
  Class LT1-PO-2

  	
   

  	
  (13)

  	
   

  	
  (14)

  	
   

  
	
  Class LT1 -Non-Discount-2

  	
   

  	
  (15)

  	
   

  	
  (16)

  	
   

  
	
  Class LT1-R

  	
   

  	
  (17)

  	
   

  	
  (17)

  	
   

  

 

(1)                                  For
each Distribution Date (and the related Accrual Period) on or before the
Distribution Date in [      ] 2005, this Lower Tier
Interest shall bear interest at a per annum rate of [      ]%.  For each Distribution Date (and related
Accrual Period) thereafter, this Lower Tier Interest shall bear interest at a
rate equal to the weighted average of the Net Mortgage Rates (as of the
beginning of the related Collection Period) of the Discount Loans in Pool 1.

 

(2)                                  The
initial Class Principal Amount of this REMIC 1 Lower Tier Interest shall
equal the sum of the Non-PO Portions of each Fixed Rate Discount Loan in Pool 1
as of the Cut-off Date.

 

(3)                                  For
each Distribution Date (and the related Accrual Period) on or before the
Distribution Date in [      ] 2005, this Lower
Tier Interest shall bear interest at a per annum rate equal to the weighted
average of the ARM Discount Rates of the ARM Discount Loans in Pool 1, weighed
on the basis of their Non-PO Portions. 
For each Distribution Date (and related Accrual Period) thereafter, this
Lower Tier Interest shall bear interest at a per annum rate equal to the
weighted average of the Net Mortgage Rates (as of the first day of the related
Collection Period) of the Discount Loans in Pool 1.

 

(4)                                  The
initial Class Principal Amount of this Lower Tier Interest shall equal the
sum of the Non-PO Portions of each ARM Discount Loan in Pool 1 as of the Cut-off
Date.

 

(5)                                  For
each Distribution Date (and the related Accrual Period) on or before the
Distribution Date in [      ] 2005, this Lower
Tier Interest shall not bear interest. 
For each Distribution Date (and the related Accrual Period) thereafter,
this Lower Tier Interest shall bear interest at a rate equal to the weighted
average of the Net Mortgage Rates (as of the beginning of the related
Collection Period) of the Discount Loans in Pool 1.

 

(6)                                  The
initial Class Principal Amount of this Lower Tier Interest shall equal the
PO Portion of each Discount Loan in Pool 1 as of the Cut-off Date.

 

(7)                                  For
each Distribution Date (and the related Accrual Period), this Lower Tier
Interest shall bear interest at a per annum rate equal to the weighted average
of the Net Mortgage Rates (as of the first day of the related Collection
Period) of the Non-Discount Mortgage Loans in Pool 1.

 

(8)                                  The
initial Class Principal Amount of this Lower Tier Interest shall equal the
sum of the Scheduled Principal Balances of each Non-Discount Mortgage Loan in
Pool 1 as of the Cut-off Date.

 

5

 

(9)                                  For
each Distribution Date (and the related Accrual Period) on or before the
Distribution Date in [      ] 2005, this Lower
Tier Interest shall bear interest at a per annum rate of [      ]%.  For each Distribution Date (and the related
Accrual Period) thereafter, this Lower Tier Interest shall bear interest at a
rate equal to the weighted average rate of the Net Mortgage Rates (as of the beginning
of the related Collection Period) of the Discount Loans in Pool 2.

 

(10)                            The
initial Class Principal Amount of this Lower Tier Interest shall equal the
sum of the Non-PO Portions of each Fixed Rate Discount Loan in Pool 2 as of the
Cut-off Date.

 

(11)                            For
each Distribution Date (and the related Accrual Period) on or before the
Distribution Date in [      ] 2005, this Lower
Tier Interest shall bear interest at a per annum rate equal to the weighted
average of the ARM Discount Rates of the ARM Discount Loans in Pool 2, weighed
on the basis of their Non-PO Portions. 
For each Distribution Date (and related Accrual Period) thereafter, this
Lower Tier Interest shall bear interest at a per annum rate equal to the weighted
average of the Net Mortgage Rates (as of the first day of the related
Collection Period) of the Discount Loans in Pool 2.

 

(12)                            The
initial Class Principal Amount of this Lower Tier Interest shall equal the
sum of the Non-PO Portions of each ARM Discount Loan in Pool 2 as of the
Cut-off Date.

 

(13)                            For
each Distribution Date (and the related Accrual Period) on or before the
Distribution Date in [      ] 2005, this Lower
Tier Interest shall not bear interest. 
For each Distribution Date thereafter, this Lower Tier Interest shall
bear interest at a rate equal to the weighted average rate of the Net Mortgage
Rates (as of the beginning of the related Collection Period) of the Discount
Loans in Pool 2.

 

(14)                            The
initial Class Principal Amount of this REMIC 1 Lower Tier Interest shall
equal the PO Portion of each Discount Loan in Pool 2 as of the Cut-off Date.

 

(15)                            For
each Distribution Date (and the related Accrual Period), this Lower Tier
Interest shall bear interest at a per annum rate equal to the weighted average
of the Net Mortgage Rates (as of the first day of the related Collection
Period) of the Non-Discount Mortgage Loans in Pool 2.

 

(16)                            The
initial Class Principal Amount of this Lower Tier Interest shall equal the
sum of the Scheduled Principal Balances of each Non-Discount Mortgage Loan in
Pool 2 as of the Cut-off Date.

 

(17)                            The Class LT1-R
Interest is the sole Class of residual interest in REMIC 1.  It does not have an interest rate or a Class Principal
Amount.

 

On each
Distribution Date, the Trust Administrator shall, to the extent of funds then
on deposit in the Collection Account, first pay or charge as an expense of
REMIC 1 all expenses of the Trust for such Distribution Date.

 

On each
Distribution Date, the Trust Administrator shall, to the extent of funds then
on deposit in the Collection Account, distribute the Interest Remittance Amount
to the Lower Tier Interests in REMIC 1 at the rates described above, pro rata,
based on the amount of interest accrued on each such Lower Tier Interest for
the related Accrual Period.

 

On each Distribution
Date, the Trust Administrator shall, to the extent of funds then on deposit in
the Collection Account, distribute the Principal Remittance Amount—

 

(a)                                  With
respect to Pool 1 as follows:

 

(i)                                     First,
to the Class LT1-Fixed Discount-1 Interest, the Non-PO Principal
Distribution Amount for each Fixed Rate Discount Loan in Pool 1;

 

6

 

(ii)                                  Second,
to the Class LT1-ARM-Discount-1 Interest, the Non-PO Principal
Distribution Amount for each ARM Discount Loan in Pool 1;

 

(iii)                               Third,
to the Class LT1-PO-l Interest, the PO Principal Distribution Amount for
each Discount Loan in Pool 1; and

 

(iv)                              Finally,
to the Class LT1-Non-Discount Pool, the portion of the Principal
Remittance Amount for Pool 1 attributable to the Non-Discount Loans in Pool 1;
and

 

(b)                                 With
respect to Pool 2 as follows:

 

(i)                                     First,
to the Class LT1-Fixed Discount-2 Interest, the Non-PO Principal
Distribution Amount for each Fixed Rate Discount Loan in Pool 2;

 

(ii)                                  Second,
to the Class LT1-ARM-Discount-2 Interest, the Non-PO Principal
Distribution Amount for each ARM Discount Loan in Pool 2;

 

(iii)                               Third,
to the Class LT1-PO-2 Interest, the PO Principal Distribution Amount for
each Discount Loan in Pool 2; and

 

(iv)                              Finally,
to the Class LT1-Non-Discount Pool-2, the portion of the Principal
Remittance Amount for Pool 2 attributable to the Non-Discount Loans in Pool 2.

 

On each
Distribution Date, the Trust Administrator shall allocate Realized Losses in
the same order and priority used to allocate the Principal Remittance Amount
among the Lower Tier Interests in REMIC 1.

 

On each
Distribution Date, the Trust Administrator shall distribute the Prepayment
Premiums received by it with respect to Pool 1 collected during the preceding
Prepayment Period to the Class LT1-PO-l and Class LT1-Non-Discount-l
Interests pro rata, based on the outstanding Class Principal Amounts of
such Interests; the Trust Administrator shall distribute the Prepayment
Premiums received by it with respect to Pool 2 collected during the preceding
Prepayment Period to the Class LT1-PO-2 and Class LT1 -Non-Discount-2
Interests pro rata, based on the outstanding Class Principal Amounts of
such Interests.

 

REMIC 2

 

The following
table sets forth (or describes) the Class designation, interest rate, and
initial Class Principal Amount for each Class of REMIC 2 Lower Tier
Interests.

 

	
  REMIC 2
  Lower

  Tier Class Designation

  	
   

  	
  REMIC 2 Lower

  Tier Interest Rate

  	
   

  	
  Initial Class

  Class Principal Amount

  	
   

  
	
  Class LT2-l-AIO-l

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [      ]

  	
   

  
	
  Class LT2-2-AIO-1

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [      ]

  	
   

  
	
  Class LT2-3-AIO-l

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [      ]

  	
   

  
	
  Class LT2-Pool-l

  	
   

  	
  (1)

  	
   

  	
  (5)

  	
   

  
	
  Class LT2-PO-1

  	
   

  	
  (2)

  	
   

  	
  (6)

  	
   

  
	
  Class LT2-l-AIO-2

  	
   

  	
  (3)

  	
   

  	
  $

  	
  [      ]

  	
   

  
	
  Class LT2-2-AIO-2

  	
   

  	
  (3)

  	
   

  	
  $

  	
  [      ]

  	
   

  
	
  Class LT2-3-AIO-2

  	
   

  	
  (3)

  	
   

  	
  $

  	
  [      ]

  	
   

  
	
  Class LT2-Pool-2

  	
   

  	
  (3)

  	
   

  	
  (7)

  	
   

  
	
  Class LT2-PO-2

  	
   

  	
  (4)

  	
   

  	
  (8)

  	
   

  
	
  Class LT2-R

  	
   

  	
  (9)

  	
   

  	
  (9)

  	
   

  

 

7

 

(1)                                  For
each Distribution Date (and the related Accrual Period) on or before the Distribution
Date in [       ] 2005, these Lower Tier
Interests shall bear interest at a per annum rate equal to the weighted average
of the interest rates on the Class LT1-Fixed Discount-l, Class LT1-ARM
Discount-1, and Class LT1-Non-Discount-1 Interests for such Distribution
Date, weighted based on the Class Principal Amounts of such Lower Tier
Interests on the first day of the related Accrual Period.  For each Distribution Date (and the related
Accrual Period) thereafter, these Lower Tier Interests shall bear interest at a
per annum rate equal to the weighted average of the interest rates on the Class LT1-Fixed
Discount-l, Class LT1-ARM Discount-1, Class LT1-Non-Discount-l, and Class LT1-PO-l
Interests for such Distribution Date, weighted based on the Class Principal
Amounts of such Lower Tier Interests on the first day of the related Accrual
Period.

 

(2)                                  For
each Distribution Date (and the related Accrual Period) on or before the Distribution
Date in [       ] 2005, this Lower Tier
Interests shall not bear interest.  For
each Distribution Date (and the related Accrual Period) thereafter, this Lower
Tier Interests shall bear interest at a per annum rate equal to the weighted
average of the interest rates on the Class LT1-Fixed Discount-1, Class LT1-ARM
Discount-l, Class LT1-Non-Discount-1, and Class LT1-PO-l Interests for
such Distribution Date, weighted based on the Class Principal Amounts of
such Lower Tier Interests on the first day of the related Accrual Period.

 

(3)                                  For
each Distribution Date (and the related Accrual Period) on or before the
Distribution Date in [      ] 2005, these Lower
Tier Interests shall bear interest at a per annum rate equal to the weighted
average of the interest rates on the Class LT1-Fixed Discount-2, Class LT1-ARM
Discount-2, and Class LT1-Non-Discount-2 Interests for such Distribution
Date, weighted based on the Class Principal Amounts of such Lower Tier
Interests on the first day of the related Accrual Period.  For each Distribution Date (and the related
Accrual Period) thereafter, these Lower Tier Interests shall bear interest at a
per annum rate equal to the weighted average of the interest rates on the Class LT1-Fixed
Discount-2, Class LT1-ARM Discount-2, Class LT1-Non-Discount-2, and Class LT1-PO-2
interests for such Distribution Date, weighted based on the Class Principal
Amounts of such Lower Tier Interests on the first day of the related Accrual
Period.

 

(4)                                  For
each Distribution Date (and the related Accrual Period) on or before the
Distribution Date in [      ] 2005, this Lower
Tier Interest shall not bear interest. 
For each Distribution Date (and the related Accrual Period) thereafter,
this Lower Tier Interest shall bear interest at a per annum rate equal to the
weighted average of the interest rates on the Class LT1-Fixed Discount-2, Class LT1-ARM-Discount-2,
Class LT1-Non-Discount-2, and Class LT1-PO-2 Interests for such
Distribution Date, weighted based on the Class Principal Amounts of such
Lower Tier Interests on the first day of the related Accrual Period.

 

(5)                                  This
Lower Tier Interest shall have an initial Class Principal Amount equal to
the difference between the Pool Balance of Pool 1 as of the Cut-off Date minus
the sum of the initial Class Principal Amounts of the Class LT2-l
-AIO-1, Class LT2-2-AIO-l, Class LT2-3-AIO-1, and Class LT2-PO-l
Interests.

 

(6)                                  This
Lower Tier Interest shall have an initial Class Principal Amount equal to
the initial Class Principal Amount of the Class LT1-PO-l Interest.

 

(7)                                  This
Lower Tier Interest shall have an initial Class Principal Amount equal to
the difference between the Pool Balance of Pool 2 as of the Cut-off Date minus
the initial Class Principal Amounts of the Class LT2-1-AIO-2, Class LT2-2-AIO-2,
Class LT2-3-AIO-2, and Class LT2-PO-2 Interests.

 

8

 

(8)                                  This
Lower Tier Interest shall have an initial Class Principal Amount equal to
the initial Class Principal Amount of the Class LT1-PO-2 Interest.

 

(9)                                  The
Class LT2-R Interest is the sole Class of residual interest in REMIC
2.  It does not have an interest rate or
a Class Principal Amount.

 

On each
Distribution Date, the Trust Administrator shall, to the extent of funds then
on deposit in the Collection Account, distribute the Interest Remittance Amount
distributed with respect to the Lower Tier Interests in REMIC 1 to the Lower
Tier Interests in REMIC 2 at the rates shown above, in the following order and
priority:

 

(A) 
First, pro rata, to the Lower Tier Interests in REMIC 2 having the letters “AIO”
in their Class designation, based on the amount of interest accrued on
each such Interest for the related Accrual Period; and

 

(B) 
Second, pro rata, to the remaining Lower Tier Interests in REMIC 2, based on
the amount of interest accrued on each such Interest for the related Accrual
Period.

 

On each
Distribution Date, the Trust Administrator shall, to the extent of funds then
on deposit in the Collection Account, distribute the Principal Remittance
Amount—

 

(a)                                  With
respect to Pool 1 as follows:

 

(i)                                     First,
to the Class LT2-PO-l, an amount equal to the principal distributed on
such Distribution Date with respect to the Class LT1-PO-l Interest;

 

(ii)                                  Second,
to the Class LT2-Pool-1 Interest until its Class Principal Amount is
reduced to zero;

 

(iii)                               Third,
to the Lower Tier Interests in REMIC 2 having the letters “AIO-l” in their Class designation
in ascending order of their numerical designation until the Class Principal
Amount or each such Lower Tier Interest is reduced to zero.

 

(b)                                 With
respect to Pool 2 as follows:

 

(i)                                     First,
to the Class LT2-PO-2, an amount equal to the principal distributed on
such Distribution Date with respect to the Class LT1-PO-2 Interest;

 

(ii)                                  Second,
to the Class LT2-Pool-2 Interest until its Class Principal Amount is
reduced to zero; and

 

(iii)                               Third,
to the Lower Tier Interests in REMIC 2 having the letters “AIO-2” in their Class designation
in ascending order of their numerical designation until the Class Principal
Amount or each such Lower Tier Interest is reduced to zero.

 

9

 

On each
Distribution Date, the Trust Administrator shall, to the extent of funds then
on deposit in the Collection Account, allocate Realized Losses in the same
order and priority used to allocate the Principal Remittance Amount among the
Lower Tier Interests in REMIC 2.

 

REMIC 3

 

The following
table sets forth (or describes) the class designation, interest rate, and
initial Class Principal Amount for each class of REMIC 3 Lower Tier
Interests.

 

	
  REMIC 3

  Lower Tier Class

  Designation

  	
   

  	
  REMIC 3

  Lower Tier

  Interest Rate

  	
   

  	
  Initial Class

  Class Principal Amount

  	
   

  	
  Corresponding Class of

  Certificate(s)

  or Component

  	
   

  
	
  LT3-1-A

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  1-A

  	
   

  
	
  LT3-2-A1

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  2-Al

  	
   

  
	
  LT3-2-A2

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  2-A2

  	
   

  
	
  LT3-M1

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  M1

  	
   

  
	
  LT3-M2

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  M2

  	
   

  
	
  LT3-M3

  	
   

  	
  (I)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  M3

  	
   

  
	
  LT3-M4

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  M4

  	
   

  
	
  LT3-M5

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  M5

  	
   

  
	
  LT3-B

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  B

  	
   

  
	
  LT3-Pool-1-PSA

  	
   

  	
  (2)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  N/A

  	
   

  
	
  LT3-Pool-l-N

  	
   

  	
  (2)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  N/A

  	
   

  
	
  LT3-Pool-2-PSA

  	
   

  	
  (3)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  N/A

  	
   

  
	
  LT3-Pool 2-N

  	
   

  	
  (3)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  N/A

  	
   

  
	
  LT3-Q

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  N/A

  	
   

  
	
  LT3-1-AIO-1

  	
   

  	
  (4)

  	
   

  	
  (4)

  	
   

  	
  AIO(l)
  Component

  	
   

  
	
  LT3-2-AIO-l

  	
   

  	
  (5)

  	
   

  	
  (5)

  	
   

  	
  AIO(l)
  Component

  	
   

  
	
  LT3-3-AIO-l

  	
   

  	
  (6)

  	
   

  	
  (6)

  	
   

  	
  AIO(l)
  Component

  	
   

  
	
  LT3-1-AIO-2

  	
   

  	
  (7)

  	
   

  	
  (7)

  	
   

  	
  AIO(2) Component

  	
   

  
	
  LT3-2-AIO-2

  	
   

  	
  (8)

  	
   

  	
  (8)

  	
   

  	
  AIO(2) Component

  	
   

  
	
  LT3-3-AIO-2

  	
   

  	
  (9)

  	
   

  	
  (9)

  	
   

  	
  AIO(2) Component

  	
   

  
	
  LT3-R

  	
   

  	
  (10)

  	
   

  	
  (10)

  	
   

  	
  Class R

  	
   

  

 

(1)                                  The
interest rate with respect to any Distribution Date (and the related Accrual
Period) for each of these Lower Tier Interests is a per annum rate equal to the
weighted average of the interest rates on the REMIC 2 Lower Tier Interests
computed after reducing the rate payable on each of the REMIC 2 Lower Tier
Interests having an “AIO” in its class designation by [      ]%
for each Distribution Date for which interest is payable on its Corresponding
REMIC 3 IO Interest, provided, however,
that for any REMIC Capped Distribution Date (and the related Accrual Period)
the interest rate for these Lower Tier Interests shall be zero.

 

(2)                                  The
interest rate with respect to any Distribution Date (and the related Accrual
Period) for each of these Lower Tier Interests is a per annum rate equal to the
weighted average of the interest rates on the Class LT2-l-AIO-l Interest, Class LT2-2-AIO-l
Interest, the Class LT2-3-AIO-l Interest, Class LT2-Pool 1 Interest,
and Class LT2-PO-1 Interest, computed after reducing the rate payable on
each such REMIC 2 Lower Tier Interest having a “AIO” in its class designation
by [      ]% for each Distribution Date for which
interest is payable on its Corresponding REMIC 3 IO Interest (i.e., the rate
will equal the Pool 1 Net

 

10

 

Funds Cap), provided, however, that for any REMIC
Capped Distribution Date (and the related Accrual Period) the interest rate for
these Lower Tier Interests shall be zero.

 

(3)                                  The
interest rate with respect to any Distribution Date (and the related Accrual
Period) for each of these Lower Tier Interests is a per annum rate equal to the
weighted average of the interest rates on the Class LT2-1-AIO-2 Interest, Class LT2-2-AIO-2
Interest, Class LT2-3-AIO-2 Interest, Class LT2-Pool-2 Interest, and Class LT-PO-2
Interest computed after reducing the rate payable on each such REMIC 2 Lower
Tier Interest having an “AIO” in its class designation by [      ]%
for each Distribution Date for which interest is payable on its Corresponding
REMIC 3 IO Interest (i.e., the
rate will equal the Pool 2 Net Funds Cap), provided,
however, that for any REMIC Capped Distribution Date (and the
related Accrual Period) the interest rate for these Lower Tier Interests shall
be zero.

 

(4)                                  The
Class LT3-l-AIO-l Interest is an interest-only Class and does not
have a Class Principal Amount.  For
each of the first six Distribution Dates the Class LT3-l-AIO-1 Interest
shall be entitled to interest payable on the Class LT2-1-AIO-l Interest at
a rate of [      ]% per annum and shall not be
entitled to any payments thereafter.

 

(5)                                  The
Class LT3-2-AIO-l Interest is an interest-only Class and does not
have a Class Principal Amount.  For
each of the first 12 Distribution Dates the Class LT3-2-AIO-l Interest
shall be entitled to interest payable on the Class LT2-2-AIO-l Interest at
a rate of [      ]% per annum and shall not be
entitled to any payments thereafter.

 

(6)                                  The
Class LT3-3-AIO-l Interest is an interest-only Class and does not
have a Class Principal Amount.  For
each of the first 18 Distribution Dates the Class LT3-3-AIO-l Interest
shall be entitled to interest payable on the LT2-3-AIO-l Interest at a rate of
[      ]% per annum and shall not be entitled to
any payments thereafter.

 

(7)                                  The
Class LT3-l-AIO-2 Interest is an interest-only Class and does not
have a Class Principal Amount.  For
each of the first six Distribution Dates the Class LT3-l-AIO-2 Interest
shall be entitled to interest payable on the Class LT2-l-AIO-2 Interest at
a rate of [      ]% per annum and shall not be
entitled to any payments thereafter.

 

(8)                                  The
Class LT3-2-AIO-2 Interest is an interest-only Class and does not
have a Class Principal Amount.  For
each of the first 12 Distribution Dates the Class LT3-2-AIO-2 Interest
shall be entitled to interest payable on the Class LT2-2-AIO-2 Interest at
a rate of [      ]% per annum and shall not be
entitled to any payments thereafter.

 

(9)                                  The
Class LT3-3-AIO-2 Interest is an interest-only Class and does not
have a Class Principal Amount.  For
each of the first 18 Distribution Dates the Class LT3-3-AIO-2 Interest
shall be entitled to interest payable on the LT2-3-AIO-2 Interest at a rate of
[      ]% per annum and shall not be entitled to
any payments thereafter.

 

(10)                            The Class LT3-R
Interest is the sole class of residual interests in REMIC 3.  It does not have an interest rate or a Class Principal
Amount.

 

On each
Distribution Date, the Trust Administrator shall, to the extent of funds then
on deposit in the Collection Account, distribute the Interest Remittance Amount
distributed with respect to the Lower Tier Interests in REMIC 2 to the Lower
Tier Interests in REMIC 3 based on the above-described interest rates, provided
however, that interest that accrues on the Class LT2-Q Interest shall be
deferred in an amount equal to 25% of the increase for such Distribution Date
in the Overcollateralization Amount and the interest so deferred shall be
applied to make the principal distributions described below for such
Distribution Date.  Any interest so
deferred shall itself bear interest at the interest rate for the Class LT2-Q
Interest.

 

11

 

On each
Distribution Date the principal distributed on the REMIC 2 Lower Tier Interests
(together with an amount equal to the interest deferred on the Class LT2-Q
Interest for such Distribution Date) shall be distributed, and Realized Losses
shall be allocated, among the Lower Tier Interests in REMIC 3 in the following
order of priority:

 

(a)                                  First,
to the Class LT3-Pool-1-PSA Interest until its Class Principal Amount
equals one percent of the Pool Subordinate Amount for Pool 1 immediately after
such Distribution Date;

 

(b)                                 Second,
to the Class LT3-Pool-2-PSA Interest until its Class Principal Amount
equals one percent of the Pool Subordinate Amount for Pool 2 immediately after
such Distribution Date;

 

(c)                                  Third,
to the Class LT3-Pool-l-PSA or Class LT3-Pool-2-PSA Interests the
minimum amount necessary to cause the ratio of the principal balance of the Class LT3-Pool-l-PSA
Interest to the principal balance of the Class LT3-Pool-2-PSA Interest to
equal the ratio of the Pool Subordinate Amount for Pool 1 to the Pool
Subordinate Amount for Pool 2;

 

(d)                                 Fourth,
to the Class LT3-Pool-l-N Interest until the aggregate Class Principal
Amount of the Class LT3-Pool-1-N Interest and the Class LT3-Pool-l-PSA
Interest equals one-quarter of the Pool Balance of the Mortgage Loans in Pool 1
immediately after such Distribution Date;

 

(e)                                  Fifth,
to the Class LT3-Pool-2-N Interest until the aggregate Class Principal
Amount of the Class LT3-Pool-2-N Interest and the Class LT3-Pool-2-PSA
Interest equals one-quarter of the Pool Balance of the Mortgage Loans in Pool 2
immediately after such Distribution Date;

 

(f)                                    Sixth,
to the Class LT3-1-A, Class LT3-2-Al, and Class LT3-2-A2
Interests until the Class Principal Amount of each such Lower Tier
Interest equals one-quarter of the Class Principal Amount of the
Corresponding Class of Certificates for such Interest immediately after
such Distribution Date;

 

(g)                                 Seventh,
to the Class LT3-M1 Interest until its Class Principal Amount equals
one-quarter of the Class Principal Amount of the Class M1
Certificates immediately after such Distribution Date;

 

(h)                                 Eighth,
to the Class LT3-M2 Interest until its Class Principal Amount equals
one-quarter of the Class Principal Amount of the Class M2
Certificates immediately after such Distribution Date;

 

(i)                                     Ninth,
to the Class LT3-M3 Interest until its Class Principal Amount equals
one-quarter of the Class Principal Amount of the Class M3
Certificates immediately after such Distribution Date;

 

12

 

(j)                                     Tenth,
to the Class LT3-M4 Interest until its Class Principal Amount balance
equals one-quarter of the Class Principal Amount of the Class M4
Certificates immediately after such Distribution Date;

 

(k)                                  Eleventh,
to the Class LT3-M5 Interest until its Class Principal Amount balance
equals one-quarter of the Class Principal Amount of the Class M5
Certificates immediately after such Distribution Date;

 

(l)                                     Twelfth,
to the Class LT3-B Interest until its Class Principal Amount balance
equals one-quarter of the Class Principal Amount of the Class B
Certificates immediately after such Distribution Date; and

 

(m)                               Finally,
to the Class LT-Q Interest, any remaining amounts.

 

REMIC 4

 

The following
table sets forth (or describes) the Class designation, Certificate
Interest Rate, initial Class Principal Amount (or Class Notional Amount)
and minimum denomination for each Class of Certificates comprising
interests in the Trust Fund created hereunder. 
Each Certificate, other than the Class R Certificate, represents
ownership of regular interests in the Upper Tier REMIC.

 

	
  Class

  Designation

  	
   

  	
  Certificate

  Interest Rate

  	
   

  	
  Initial

  Class Principal

  Amount or Class

  Notional Amount

  	
   

  	
  Minimum

  Denominations

  	
   

  
	
  Class 1-A

  	
   

  	
  (1)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  Class 2-Al

  	
   

  	
  (2)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  Class 2-A2

  	
   

  	
  (3)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  Class A-IO

  	
   

  	
  [       ]%

  	
   

  	
  (4)

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Class M1

  	
   

  	
  (5)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Class M2

  	
   

  	
  (6)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Class M3

  	
   

  	
  (7)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Class M4

  	
   

  	
  (8)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Class M5

  	
   

  	
  (9)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  $

  	
  100,000

  	
   

  
	
  Class B

  	
   

  	
  (10)

  	
   

  	
  $

  	
  [       ]

  	
   

  	
  $

  	
  25,000

  	
   

  
	
  Class X

  	
   

  	
  (11)

  	
   

  	
  (11)

  	
   

  	
  (13)

  	
   

  
	
  Class R

  	
   

  	
  (12)

  	
   

  	
  (12)

  	
   

  	
  (13)

  	
   

  

 

(1)                                  The
Certificate Interest Rate with respect to any Distribution Date (and the
related Accrual Period) for the Class 1-A Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus
[       ]% and (ii) with respect to any
Distribution Date on which any of the Class 2-Al or Class 2-A2
Certificates are outstanding, the Pool 1 Net Funds Cap for such Distribution
Date or, after the Distribution Date on which the aggregate Class Principal
Amount of the Class 2-Al and Class 2-A2 Certificates have been
reduced to zero, the Subordinate Net Funds Cap for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i) above
with respect to the Class 1-Al Certificates will be LIBOR plus [      ]%.

 

13

 

(2)                                  The
Certificate Interest Rate with respect to any Distribution Date (and the
related Accrual Period) for the Class 2-Al Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus [      ]%
and (ii) with respect to any Distribution Date on which any of the Class 1-A
Certificates are outstanding, the Pool 2 Net Funds Cap for such Distribution
Date or, after the Distribution Date on which the aggregate Class Principal
Amount of the Class 1-A Certificates have been reduced to zero, the
Subordinate Net Funds Cap for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i) above
with respect to the Class 2-Al Certificates will be LIBOR plus [      ]%.

 

(3)                                  The
Certificate Interest Rate with respect to any Distribution Date (and the
related Accrual Period) for the Class 2-A2 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus [      ]%
and (ii) with respect to any Distribution Date on which any of the Class 1-A
Certificates are outstanding, the Pool 2 Net Funds Cap for such Distribution
Date or, after the Distribution Date on which the aggregate Class Principal
Amount of the Class I-A Certificates have been reduced to zero, the
Subordinate Net Funds Cap for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i) above
with respect to the Class 2-A2 Certificates will be LIBOR plus [      ]%.

 

(4)                                  The
Class A-IO Certificates are an interest-only Class and for any
Distribution Date shall bear interest at the per annum rate shown above on its Class Notional
Amount (as defined herein).

 

(5)                                  The
Certificate Interest Rate with respect to any Distribution Date (and the
related Accrual Period) for the Class M1 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus [      ]%
and (ii) the Subordinate Net Funds Cap for such Distribution Date; provided, that if the Mortgage Loans and related
property are not purchased pursuant to Section 7.01(b) on the Initial
Optional Purchase Date, then with respect to each subsequent Distribution Date
the per annum rate calculated pursuant to clause (i) above with respect to
the Class M1 Certificates will be LIBOR plus [      ]%.

 

(6)                                  The
Certificate Interest Rate with respect to any Distribution Date (and the
related Accrual Period) for the Class M2 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus [      ]%
and (ii) the Subordinate Net Funds Cap for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i) above
with respect to the Class M2 Certificates will be LIBOR plus [      ]%.

 

(7)                                  The
Certificate Interest Rate with respect to any Distribution Date (and the
related Accrual Period) for the Class M3 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus [      ]%
and (ii) the Subordinate Net Funds Cap for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i) above
with respect to the Class M3 Certificates will be LIBOR plus [      ]%.

 

(8)                                  The
Certificate Interest Rate with respect to any Distribution Date (and the
related Accrual Period) for the Class M4 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus [      ]%
and (ii) the Subordinate Net Funds Cap for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i) above
with respect to the Class M4 Certificates will be LIBOR plus [      ]%.

 

(9)                                  The
Certificate Interest Rate with respect to any Distribution Date (and the
related Accrual Period) for the Class M5 Certificates is the per annum
rate equal to the lesser of (i) LIBOR plus [      ]%
and (ii) the Subordinate Net Funds Cap for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Purchase Date, then with respect to

 

14

 

each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i) above
with respect to the Class M5 Certificates will be LIBOR plus [      ]%.

 

(10)                            The
Certificate Interest Rate with respect to any Distribution Date (and the
related Accrual Period) for the Class B Certificates is the per annum rate
equal to the lesser of (i) LIBOR plus [      ]%
and (ii) the Subordinate Net Funds Cap for such Distribution Date; provided, that if the Mortgage Loans and
related property are not purchased pursuant to Section 7.01(b) on the
Initial Optional Purchase Date, then with respect to each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i) above
with respect to the Class B Certificates will be LIBOR plus [      ]%.

 

(11)                            The Class X
Certificate shall have an initial Class Principal Amount of $[      ],
which right represents a regular interest in the Upper Tier REMIC, the Class X
Certificate also comprises a notional component, which is also a regular interest
in the Upper Tier REMIC.  The notional
component has a notional Class Principal Amount that at all times will
equal the aggregate of the Class Principal Amounts of the regular
interests in REMIC 3 (i.e., the
Aggregate Loan Balance).  For each
Distribution Date (and the related Accrual Period), the notional component
shall bear interest at a rate equal to the excess of (a) the weighted
average of the interest rates on the regular interests in REMIC 3 (other than
the regular interests having an “AIO” in their class designation), weighted on
the basis of the Class Principal Amount of each such Lower Tier Interest (i.e. the weighted average of the Pool 1
Net Funds Cap and the Pool 2 Net Funds Cap, weighted on the basis of the Pool
Balance for each Mortgage Pool), over (b) the Adjusted Lower Tier
WAC.  For any Distribution Date, interest
that accrues on the notional component of the Class X Certificate shall be
deferred to the extent of any increase in the Overcollateralization Amount on
such date.  Such deferred interest shall
not itself bear interest.  The Class X
Certificate is also entitled to all Prepayment Premiums with respect to the
Mortgage Loans collected or deposited by the Servicer.

 

(12)                            The Class R
Certificate will be issued without a Class Principal Amount and will not
bear interest at a stated rate.  The Class R
Certificate represents ownership of the residual interest in the Upper Tier
REMIC, as well as ownership of the Class LT3-R, Class LT2-R and Class LT1-R
Interests.

 

(13)                            The Class X
and Class R Certificates will each be issued as a single Certificate
evidencing the entire Percentage Interest in such Class.

 

As of the
Cut-off Date, the Mortgage Loans had an aggregate Scheduled Principal Balance
of $[      ].

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01                                Definitions.  The following words and phrases, unless the
context otherwise requires, shall have the following meanings:

 

Accepted
Servicing Practices: As provided in the Servicing
Agreement.

 

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

 

Accrual Period:
With respect to each Class of Certificates and any Distribution Date, the
period beginning on the Distribution Date in the calendar month immediately
preceding the month in which the related Distribution Date occurs (or, in the
case of the first Distribution Date, beginning on [      ],
2005) and ending on the day immediately preceding the related

 

15

 

Distribution Date.  With respect
to the Class A-IO Certificates, each Accrual Period shall be deemed to be
30 days; provided that with
respect to the Class A-IO Certificates, the first Accrual Period shall
begin on the Closing Date and end on [      ],
2005, inclusive.

 

Act:  As defined in Section 3.03(c).

 

Additional
Collateral: 
None.

 

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

 

Advance:
With respect to a Mortgage Loan, an advance of the aggregate of payments of
principal and interest (net of the Servicing Fee) on one or more Mortgage Loans
that were due on a Due Date in the related Collection Period and not received
as of the close of business on the related Determination Date, required to be
made by or on behalf of the Master Servicer, the Servicer and the Subservicer
(or by the Trust Administrator) pursuant to Section 5.04.

 

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

 

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

 

Aggregate
Expense Rate: 
With respect to any Mortgage Loan, the sum of the Servicing Fee Rate and
the Master Servicing Fee Rate.

 

Aggregate Loan
Balance:  As of
any date of determination, the aggregate of the Scheduled Principal Balances of
all Mortgage Loans (i.e., in each
Mortgage Pool).

 

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

 

Aggregate
Voting Interests: 
The aggregate of the Voting Interests of all the Certificates under this
Agreement.

 

16

 

Agreement:  This Trust Agreement and all amendments and
supplements hereto.

 

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

 

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

 

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

 

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

 

Authenticating
Agent:  The
Trust Administrator, or any successor authenticating agent appointed by the
Trustee pursuant to Section 6.10.

 

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

 

B Principal
Distribution Amount: 
With respect to any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event has not occurred with respect to such Distribution
Date, the amount, if any, by which (x) the sum of (i) the aggregate Class Principal
Amount of the Class 1-A, Class 2-Al, Class 2-A2, Class M1, Class M2,
Class M3, Class M4 and Class M5 Certificates, in each case after
giving effect to distributions on such Distribution Date, and (ii) the Class Principal
Amount of the Class B Certificates immediately prior to such Distribution
Date exceeds (y) the B Target Amount.

 

B Target
Amount:  With
respect to any Distribution Date, an amount equal to the lesser of (a) the
product of (i) [      ]% and (ii) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period and (b) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date, determined as of the last
day of the related Collection Period, exceeds (ii) 0.50% of the Cut-off
Date Balance.

 

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

 

17

 

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

 

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

 

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

 

Basis Risk Cap:  That portion of the Cap Agreement, which the
Trustee shall account for as a discrete cap agreement pursuant to Section 5.06
of this Agreement, having terms (other than the purchase price therefor)
identical to those of the Cap Agreement except that the Basis Risk Cap shall
have a notional amount equal at any time to the lesser of (i) the
aggregate of the Class Principal Amounts of the LIBOR Certificates at such
time, and (ii) the notional amount of the Cap Agreement at such time.

 

Basis Risk Payment:
With respect to any Distribution Date, an amount equal to the sum of (i) any
Basis Risk Shortfall for such Distribution Date, (ii) any Unpaid Basis
Risk Shortfalls from previous Distribution Dates and (iii) any Required
Reserve Fund Amount for such Distribution Date. 
The amount of the Basis Risk Payment for any Distribution Date cannot
exceed the amount of Monthly Excess Cashflow otherwise available for
distribution pursuant to Section 5.02(f)(iii) of this Agreement.

 

Basis Risk
Reserve Fund:  A
fund created as part of the Trust Fund pursuant to Section 5.06 of this
Agreement but which is not an asset of any of the REMICs.

 

Basis Risk
Shortfall:  With
respect to any Distribution Date and any Class of LIBOR Certificates, the
amount by which the amount of interest calculated at the Certificate Interest
Rate applicable to such Class for such date, determined without regard to
the Pool 1 Net Funds Cap, Pool 2 Net Funds Cap or Subordinate Net Funds Cap, as
applicable, for such date but subject to a cap equal to the Maximum Interest
Rate, exceeds the amount of interest calculated at the Pool 1 Net Funds Cap,
Pool 2 Net Funds Cap or Subordinate Net Funds Cap, as applicable.

 

Benefit Plan
Opinion:  An
Opinion of Counsel satisfactory to the Trustee to the effect that any proposed
transfer of Certificates will not (i) cause the assets of the Trust Fund
to be regarded as plan assets for purposes of the Plan Asset Regulations or (ii) give
rise to any fiduciary duty on the part of the Depositor or the Trustee.

 

Book-Entry
Certificates: 
Beneficial interests in Certificates designated as “Book-Entry
Certificates” in this Agreement, ownership and transfers of which shall be
evidenced or made through book entries by a Clearing Agency as described in Section 3.09;
provided, that after the
occurrence of a condition whereupon book-entry registration and transfer are no
longer permitted and Definitive Certificates are to be issued to Certificate
Owners, such Book-Entry Certificates shall no longer be “Book-Entry
Certificates.” As of the Closing Date, the following Classes of

 

18

 

Certificates constitute Book-Entry Certificates: the Class 1-A, Class 2-Al,
Class 2-A2, Class M1, Class M2, Class M3, Class M4, Class M5
and Class B Certificates.

 

Business Day:  Any day other than (i) a Saturday or a
Sunday, (ii) a day on which banking institutions in New York, New York or,
if other than New York, the city in which the Corporate Trust Office of the
Trustee is located, or the States Maryland or Minnesota are closed, or (iii) with
respect to any Servicer Remittance Date or any Servicer reporting date, the
States specified in the definition of “Business Day” in the Servicing
Agreement, are authorized or obligated by law or executive order to be closed.

 

Cap Agreement:  The Interest Rate Cap Agreement dated as of [      ],
2005, entered into between the Trustee on behalf of the Trust Fund (for the
benefit of Certificateholders), in the case of the Basis Risk Cap, and on
behalf of the holder of the Class X Certificate, in the case of the Class X
Cap, and the Cap Provider, which agreement provides for the monthly payment,
commencing in [      ], 2005 and terminating in [      ],
by the Cap Provider specified therein, but subject to the conditions set forth
therein, together with the confirmation and schedules relating thereto, in the
form of Exhibit P hereto.  The
portion of the Cap Agreement consisting of the Class X Cap shall not be an
asset of the Trust Fund, and the Trustee shall hold the Class X Cap
separate and apart from the assets of the Trust Fund, solely for the benefit of
the Class X Certificateholder.

 

Cap Provider:  [      ]

 

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

 

Certificate:  Any one of the certificates signed and
countersigned by the Trust Administrator in substantially the forms attached
hereto as Exhibit A.

 

Collection
Account:  The
account maintained by the Trust Administrator in accordance with the provisions
of Section 4.01.

 

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

 

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

 

19

 

Certificate
Principal Amount: 
With respect to any Certificate (other than the Class A-IO, Class X
and Class R Certificates), the initial Certificate Principal Amount
thereof on the Closing Date, less the amount of all principal distributions
previously distributed with respect to such Certificate and, in the case of the
Subordinate Certificates, any Applied Loss Amount previously allocated to such
Certificate.  The Class A-IO, Class X
and Class R Certificates are issued without Certificate Principal Amounts.

 

Certificate
Register and Certificate Registrar:  The register maintained by the Trust
Administrator, as the Certificate Registrar, or any successor registrar
appointed pursuant to Section 3.02.

 

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

 

Civil Relief
Act:  The
Servicemembers Civil Relief Act of 2002, as amended, or any similar state
statute.

 

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

 

Class Principal
Amount:  With
respect to each Class of Certificates other than the Class A-IO, Class X
and Class R Certificates, the aggregate of the Certificate Principal
Amounts of all Certificates of such Class at the date of
determination.  With respect to the Class A-IO,
Class X and Class R Certificates, zero.  With respect to any Lower Tier Interest, the
initial Class Principal Amount as shown or described in the table set
forth in the Preliminary Statement to this Agreement for REMIC 1, REMIC 2 or
REMIC 3, as applicable, as reduced by principal distributed with respect to
such Lower Tier Interest and Realized Losses allocated to such Lower Tier
Interest.

 

Class Notional
Amount:  With
respect to the Class A-IO Certificates and any Distribution Date, the sum
of the Component Notional Amounts of the A-IO(1) Component and the A-IO(2) Component.  The initial Class Notional Amount of the
Class A-IO Certificates is $120,000,000.

 

Class A
Certificates: 
Collectively, the Class I-A, Class 2-Al, Class 2-A2 and Class A-IO
Certificates.

 

Class M
Certificates: 
Collectively, the Class M1, Class M2, Class M3, Class M4
and Class M5 Certificates.

 

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

 

Class X
Cap:  That portion
of the Cap Agreement, which the Trustee shall account for as a discrete cap
agreement pursuant to Section 5.06 of this Agreement, having terms (other
than the purchase price therefor) identical to those of the Cap Agreement
except that the Class X Cap shall have a notional amount equal at any time
to the excess, if any, of (i) the notional amount of the Cap Agreement at
such time, over (ii) the
notional amount of the Basis Risk Cap at such

 

20

 

time.  The Class X Cap shall
not be an asset of the Trust Fund, and the Trustee shall hold the Class X
Cap separate and apart from the assets of the Trust Fund, solely for the
benefit of the Class X Certificateholder.

 

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

 

Class X
Notional Balance: 
With respect to any Distribution Date (and the related Accrual Period)
the aggregate principal balance of the regular interests in REMIC 3 as
specified in the Preliminary Statement hereto.

 

Clearing
Agency:  An
organization registered as a “clearing agency” pursuant to Section 17A of
the Securities Exchange Act of 1934, 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, société anonyme, and any
successor thereto.

 

Closing Date:  [      ], 2005.

 

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

 

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

 

Combined
Loan-to-Value Ratio or CLTV:  With respect to any Mortgage Loan, the sum of
the original principal balance of such Mortgage Loan and the remaining balance
of the First Lien and any other lien senior to the lien of the related
Mortgage, if any, as of the date of origination of the Mortgage Loan, divided
by the Original Value.

 

Compensating
Interest Payment: 
With respect to any Distribution Date, an amount equal to the amount, if
any, by which (x) the aggregate amount of any Prepayment Interest Shortfalls
required to be paid by the Servicer and Subservicer with respect to such
Distribution Date exceeds (y) the aggregate amount actually paid by the
Servicer and Subservicer in respect of such shortfalls; provided, that such amount, to the extent
payable by the Master Servicer, shall not exceed the aggregate Master Servicing
Fee that would be payable to the Master Servicer in respect of such
Distribution Date without giving effect to any Compensating Interest Payment.

 

21

 

Component:  The A-IO(1) Component or A-IO(2) Component
of the Class A-IO Certificates.

 

Component
Interest Rate: 
For each of the A-IO(l) and A-IO(2) Components, [      ]%
per annum.

 

Component
Notional Amount: 
With respect to the Class A-IO(l) Component and Class A-IO(2) Component
of the Class A-IO Certificates and any Distribution Date, a notional
amount which will be calculated as follows:

 

(i)                                     for
each Distribution Date falling within the period from [      ]
through [         ], (a) the
Component Notional Amount of the A-IO(1) Component will equal the lesser
of (i) $[      ] and (ii) the Pool
Balance for Pool 1 as of the first day of the related Collection Period (or as
of the Cut-off Date, in the case of the first Distribution Date) and (b) the
Component Notional Amount of the A-IO(2) Component will equal the lesser
of (i) $[      ] and (ii) the Pool
Balance for Pool 2 as of the first day of the related Collection Period (or as
of the Cut-off Date, in the case of the first Distribution Date);

 

(ii)                                  for
each Distribution Date falling within the period from [      ]
through [       ], (a) the Component
Notional Amount of the A-IO(1) Component will equal the lesser of (i) $[      ]
and (ii) the Pool Balance for Pool 1 as of the first day of the related
Collection Period (or as of the Cut-off Date, in the case of the first
Distribution Date) and (b) the Component Notional Amount of the A-IO(2) Component
will equal the lesser of (i) $[      ] and (ii) the
Pool Balance for Pool 2 as of the first day of the related Collection Period
(or as of the Cut-off Date, in the case of the first Distribution Date);

 

(iii)                               for
each Distribution Date falling within the period from [      ]
through [       ], (a) the Component
Notional Amount of the A-IO(1) Component will equal the lesser of (i) $[      ]
and (ii) the Pool Balance for Pool 1 as of the first day of the related
Collection Period (or as of the Cut-off Date, in the case of the first
Distribution Date) and (b) the Component Notional Amount of the A-IO(2) Component
will equal the lesser of (i) $[      ] and (ii) the
Pool Balance for Pool 2 as of the first day of the related Collection Period
(or as of the Cut-off Date, in the case of the first Distribution Date);

 

(iv)                              for
any Distribution Date thereafter, the Component Notional Amount of each of the
A-IO(1) Component and the A-IO(2) Component will equal zero.

 

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

 

Conventional
Loan Documents: 
None.

 

22

 

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

 

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

 

Cooperative
Loan Documents: 
As to any Cooperative Loan, (i) the Cooperative Shares, together
with a stock power in blank; (ii) the original executed Security Agreement
and the assignment of the Security Agreement endorsed in blank; (iii) the
original executed Proprietary Lease and the assignment of the Proprietary Lease
endorsed in blank; (iv) the original executed Recognition Agreement and
the assignment of the Recognition Agreement (or a blanket assignment of all
Recognition Agreements) endorsed in blank; (v) the executed UCCl financing
statement with evidence of recording thereon, which has been filed in all
places required to perfect the security interest in the Cooperative Shares and
the Proprietary Lease; and (vi) executed UCC3 financing statements (or
copies thereof) or other appropriate UCC financing statements required by state
law, evidencing a complete and unbroken line from the mortgagee to the Trustee
with evidence of recording thereon (or in a form suitable for recordation).

 

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

 

Cooperative
Shares:  Shares
issued by a Cooperative Corporation.

 

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

 

Corporate
Trust Office: 
With respect to the Trustee, the principal corporate trust office of the
Trustee at which, at any particular time, its corporate trust business shall be
administered, which office at the date hereof is located at [      ],
Attention: [      ].  With respect to the Certificate Registrar and
presentment of Certificates for registration of transfer, exchange or final
payment, [      ], Attention: [      ].

 

Cumulative
Loss Trigger Event: 
A Cumulative Loss Trigger Event shall have occurred if, with respect to
any Distribution Date, the fraction, expressed as a percentage, obtained by
dividing (x) the aggregate amount of cumulative Realized Losses incurred on the
Mortgage Loans from the Cut-off Date through the last day of the related
Collection Period by (y) the Cutoff Date Balance, exceeds the applicable
percentages described below with respect to such Distribution Date:

 

	
  Distribution Date Occurring in

  	
   

  	
  Cumulative Loss Percentage

  
	
  [      ]
  through [      ]

  	
   

  	
  [      ]% for
  the first month, plus an additional 1/12th of [      ]%
  for each month thereafter

  
	
  [      ]
  through [      ]

  	
   

  	
  [      ]% for
  the first month, plus an additional 1/12th of [      ]%
  for each month thereafter

  
	
  [      ]
  through [      ]

  	
   

  	
  [      ]% for
  the first month, plus an additional 1/12th of [      ]%
  for each month thereafter

  
	
  [      ] and
  thereafter

  	
   

  	
  [      ]%

  

 

23

 

Current
Interest:  With
respect to any Class of Certificates (other than the Class A-IO, Class X
and Class R Certificates) or any Component of the Class A-IO
Certificates and any Distribution Date, the aggregate amount of interest
accrued at the applicable Component Interest Rate or Certificate Interest Rate,
as applicable, during the related Accrual Period on the Class Principal
Amount of such Class (or the Component Notional Amount of such Component)
immediately prior to such Distribution Date. 
Current Interest with respect to the Class A-IO Certificates and
any Distribution Date will equal the aggregate Current Interest on the
Components of such Class.

 

Custodial
Account:  Any
custodial account (other than an Escrow Account) established and maintained by
the Servicer pursuant to the Servicing Agreement.

 

Custodial
Agreement:  The
custodial agreement attached as Exhibit K-1 hereto, and any custodial
agreement subsequently executed by the Trustee and acknowledged by the Master
Servicer substantially in the form thereof.

 

Custodian:
 The custodian appointed by the Trustee
pursuant to the Custodial Agreement, and any successor thereto.  The initial Custodian is [      ].

 

Cut-off Date:  [      ].

 

Cut-off Date
Balance:  The
Aggregate Loan Balance as of the Cut-off Date.

 

Deferred Amount:  With respect to any Distribution Date and
each Certificate, the aggregate of Applied Loss Amounts previously applied in
reduction of the Certificate Principal Amount thereof, less any amounts
previously reimbursed in respect thereof.

 

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

 

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

 

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

 

24

 

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

 

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

 

Deposit Date:  With respect to each Distribution Date, the
Business Day immediately preceding such Distribution Date.

 

Depositor:  Fieldstone Mortgage Investment Corporation, a
Maryland corporation having its principal place of business in New York, or its
successors in interest.

 

Determination
Date:  With
respect to each Distribution Date, the 15th day of the month in which such
Distribution Date occurs, or, if such 15th day is not a Business Day, the next
succeeding Business Day.

 

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

 

Distribution
Date:  The 25th
day of each month or, if such 25th day is not a Business Day, the next succeeding
Business Day, commencing in [      ] 2005.

 

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

 

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

 

Eligible
Account:  Either
(1) an account or accounts maintained with a federal or state chartered
depository institution or trust company acceptable to the Rating Agencies or (ii) an
account or accounts the deposits in which are insured by the FDIC to the limits
established by such corporation, provided that any such deposits not so insured
shall be maintained in an account at a depository institution or trust company
whose commercial paper or other short term debt obligations (or, in the case of
a depository institution or trust company which is the principal subsidiary of
a holding company, the commercial paper or other short term debt or deposit
obligations of such holding company or depository institution, as the case may
be) have

 

25

 

been rated by each Rating Agency in its highest short-term rating
category, or (iii) a segregated trust account or accounts (which shall be
a “special deposit account”) maintained with the Trustee or any other federal
or state chartered depository institution or trust company, acting in its
fiduciary capacity, in a manner acceptable to the Trustee and the Rating
Agencies.  Eligible Accounts may bear
interest.

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

(vi)                              a
Qualified GIC;

 

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

 

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

 

provided, however,
that no such instrument shall be an Eligible Investment if such instrument
evidences either (i) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, provided that any such
investment will be a “permitted investment” within the meaning of Section 860G(a)(5) of
the Code.

 

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

 

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

 

27

 

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

 

Errors and
Omission Insurance Policy:  The errors or omission insurance policy
required to be obtained by the Servicer or Subservicer satisfying the
requirements of the Servicing Agreement.

 

Escrow Account:  Any account established and maintained by the
Servicer or Subservicer pursuant to the Servicing Agreement.

 

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

 

Event of
Default:  Any
one of the conditions or circumstances enumerated in Section 6.14(a).

 

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

 

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

 

Fidelity Bond:  The fidelity bond required to be obtained by
the Servicer satisfying the requirements of the Servicing Agreement.

 

Final
Scheduled Distribution Date:  With respect to each Class of
Certificates other than the Class A-IO Certificates, the Distribution Date
occurring in [      ], and with respect to the Class A-IO
Certificates, the Distribution Date occurring in [      ].

 

Financial
Intermediary:  A
broker, dealer, bank or other financial institution or other Person that clears
through or maintains a custodial relationship with a Clearing Agency
Participant.

 

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

 

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

 

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

 

Form 10-K
Certification: 
As defined in Section 6.20(c).

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

Initial LIBOR
Rate:  [      ]%.

 

Initial
Optional Purchase Date:  The first Distribution Date following the
date on which the Aggregate Loan Balance is less than [      ]%
of the Cut-off Date Balance.

 

Insurance
Policy:  Any
standard hazard insurance policy, flood insurance policy, earthquake insurance
policy or title insurance policy relating to the Mortgage Loans or the
Mortgaged Properties, to be in effect as of the Closing Date or thereafter
during the term of this Agreement.

 

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

 

Interest
Remittance Amount: With respect to each Mortgage Pool
and any Distribution Date, (a) the sum of (1) all interest collected
(other than Payaheads and Prepayment Premiums) or advanced in respect of
Scheduled Payments on the Mortgage Loans in such Mortgage Pool

 

29

 

during the related Collection Period by the Servicer, the Subservicer,
the Master Servicer or the Trustee, minus (x) the Servicing Fee and Master
Servicing Fee with respect to such Mortgage Loans in such Mortgage Pool and (y)
previously unreimbursed Advances due to the Servicer, the Subservicer, the
Master Servicer or the Trustee to the extent allocable to interest and the
allocable portion of previously unreimbursed Servicing Advances with respect to
such Mortgage Loans, (2) any amounts actually paid by the Servicer and the
Subservicer with respect to Prepayment Interest Shortfalls and any Compensating
Interest Payments with respect to such Mortgage Loans and the related
Prepayment Period, (3) the portion of any Purchase Price or Substitution
Amount paid with respect to such Mortgage Loans during the related Prepayment
Period allocable to interest and (4) all Net Liquidation Proceeds,
Insurance Proceeds and any other recoveries collected with respect to such
Mortgage Loans during the related Prepayment Period, to the extent allocable to
interest, as reduced by, for each Mortgage Pool, less (b) the product of (i) the
applicable Pool Percentage for such Distribution Date and (ii) any other
costs, expenses or liabilities reimbursable to the Trustee, the Master
Servicer, the Trust Administrator, the Custodian, the Servicer and Subservicer
to the extent provided in this Agreement and the Servicing Agreement; provided, however, that in the case of the Trustee, such
reimbursable amounts may not exceed $[      ]
during any Anniversary Year.  In the
event that the Trustee incurs reimbursable amounts in excess of $[      ],
it may seek reimbursement for such amounts in subsequent Anniversary Years, but
in no event shall more than $[      ] be
reimbursed to the Trustee per Anniversary Year. 
Notwithstanding the foregoing, costs and expenses incurred by the
Trustee pursuant to Section 6.14(a) in connection with any transfer
of servicing shall be excluded from the $[      ]
per Anniversary Year limit on reimbursable amounts.

 

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

 

Latest
Possible Maturity Date:  The Distribution Date occurring in [      ].

 

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

 

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

 

30

 

pursuant to Section 4.04, that the selection of such index will
not cause any of the REMICs to lose their classification as REMICs for federal
income tax purposes.

 

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

 

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

 

LIBOR
Certificate: 
Any Class 1-A, Class 2-Al, Class 2-A2, Class M1, Class M2,
Class M3, Class M4, Class M5 and Class B Certificate.

 

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

 

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

 

Liquidation
Expenses: 
Expenses that are incurred by the Master Servicer, the Servicer or the
Subservicer in connection with the liquidation of any defaulted Mortgage Loan,
including, without limitation, foreclosure and rehabilitation expenses, legal
expenses and unreimbursed amounts, if any, expended pursuant to Sections 9.06,
9.16 or 9.22.

 

Liquidation
Proceeds:  Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee’s sale,
foreclosure sale, payment in full, discounted payoff or otherwise, or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan, including any amounts remaining in the
related Escrow Account.

 

Lower Tier
Interest:  As
described in the Preliminary Statement.

 

M1 Principal
Distribution Amount: 
With respect to any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect with respect to such Distribution
Date, the amount, if any, by which (x) the sum of (i) the aggregate Class Principal
Amount of the Class 1-A, Class 2-Al and Class 2-A2 Certificates,
in each case after giving effect to distributions on such Distribution Date and
(ii) the Class Principal Amount of the Class M1 Certificates
immediately prior to such Distribution Date exceeds (y) the M1 Target Amount.

 

M1 Target
Amount:  With
respect to any Distribution Date, an amount equal to the lesser of (a) the
product of (i) [      ]% and (ii) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period and (b) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period exceeds (ii) 0.50% of the Cut-off Date
Balance.

 

31

 

M2 Principal
Distribution Amount: 
With respect to any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect with respect to such Distribution
Date, the amount, if any, by which (x) the sum of (i) the aggregate Class Principal
Amount of the Class 1-A, Class 2-Al, Class 2-A2 and Class M1
Certificates, in each case after giving effect to distributions on such
Distribution Date and (ii) the Class Principal Amount of the Class M2
Certificates immediately prior to such Distribution Date exceeds (y) the M2
Target Amount.

 

M2 Target
Amount:  With
respect to any Distribution Date, an amount equal to the lesser of (a) the
product of (i) [      ]% and (ii) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period and (b) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period exceeds (ii) 0.50% of the Cut-off Date
Balance.

 

M3 Principal
Distribution Amount: 
With respect to any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect with respect to such Distribution
Date, the amount, if any, by which (x) the sum of (i) the aggregate Class Principal
Amount of the Class 1-A, Class 2-Al, Class 2-A2, Class M1
and Class M2 Certificates, in each case after giving effect to
distributions on such Distribution Date and (ii) the Class Principal
Amount of the Class M3 Certificates immediately prior to such Distribution
Date exceeds (y) the M3 Target Amount.

 

M3 Target
Amount:  With
respect to any Distribution Date, an amount equal to the lesser of (a) the
product of (i) [      ]% and (ii) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period and (b) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period exceeds (ii) 0.50% of the Cut-off Date
Balance.

 

M4 Principal
Distribution Amount: 
With respect to any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect with respect to such Distribution
Date, the amount, if any, by which (x) the sum of (i) the aggregate Class Principal
Amount of the Class 1-A, Class 2-Al, Class 2-A2, Class M1, Class M2
and Class M3 Certificates, in each case after giving effect to
distributions on such Distribution Date and (ii) the Class Principal
Amount of the Class M4 Certificates immediately prior to such Distribution
Date exceeds (y) the M4 Target Amount.

 

M4 Target
Amount:  With
respect to any Distribution Date, an amount equal to the lesser of (a) the
product of (i) [      ]% and (ii) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period and (b) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period exceeds (ii) 0.50% of the Cut-off Date
Balance.

 

M5 Principal
Distribution Amount: 
With respect to any Distribution Date on or after the Stepdown Date and
as long as a Trigger Event is not in effect with respect to such Distribution
Date, the amount, if any, by which (x) the sum of (i) the aggregate Class Principal
Amount of the Class 1-A, Class 2-Al, Class 2-A2, Class M1, Class M2,
Class M3 and Class M4 Certificates, in each case after giving effect
to distributions on such Distribution Date and (ii) the Class Principal
Amount of the Class M5 Certificates immediately prior to such Distribution
Date exceeds (y) the M5 Target Amount.

 

32

 

M5 Target
Amount:  With
respect to any Distribution Date, an amount equal to the lesser of (a) the
product of (i) [      ]% and (ii) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period and (b) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the related Collection Period exceeds (ii) 0.50% of the Cut-off Date
Balance.

 

Master
Servicer:  [      ],
or any successor in interest, or if any successor master servicer shall be
appointed as herein provided, then such successor master servicer.

 

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

 

Master
Servicing Fee Rate: 
[      ]% per annum.

 

Material
Defect:  As
defined in Section 2.02(c) hereof.

 

Maximum
Interest Rate: 
With respect to any Distribution Date, an annual rate equal to: (i) in
the case of the Class 1-A Certificates, for each Distribution Date on or
before the Distribution Date on which the aggregate Class Principal Amount
of the Class 2-Al and Class 2-A2 Certificates have been reduced to
zero, an annual rate that would equal the Pool 1 Net Funds Cap for such
Distribution Date if the Pool 1 Optimal Interest Remittance Amount were
computed by reference to the weighted average of the excess of the maximum “lifetime”
Mortgage Rates specified in the related Mortgage Notes for the Pool 1 Mortgage
Loans over the Aggregate Expense Rate; (ii) in the ease of the Class 2-Al
and Class 2-A2 Certificates, for each Distribution Date on or before the
Distribution Date on which the aggregate Class Principal Amount of the Class 1-A
Certificates have been reduced to zero, an annual rate that would equal the
Pool 2 Net Fund Cap for such Distribution Date if the Pool 2 Optimal Remittance
Interest Amount were computed by reference to the weighted average of the
excess of the maximum “lifetime” Mortgage Rates specified in the related
Mortgage Notes for the Pool 2 Mortgage Loans over the Aggregate Expense Rate
and (iii) in the case of (A) the Class M1, Class M2, Class M3,
Class M4, Class M5 and Class B Certificates, (B) the Class 1-A
Certificates for each Distribution Date after the Distribution Date on which
the aggregate Class Principal Amount of the Class 2-Al and Class 2-A2
Certificates have been reduced to zero, and (C) the Class 2-Al and Class 2-A2
Certificates for each Distribution Date after the Distribution Date on which
the aggregate Class Principal Amount of the Class 1-A Certificates
have been reduced to zero, an annual rate that would equal the Subordinate Net
Funds Cap for such Distribution Date if the (x) Pool 1 Optimal Interest
Remittance Amount were computed by reference to the weighted average of the
excess of the maximum “lifetime” Mortgage Rates specified in the related
Mortgage Notes for the Pool 1 Mortgage Loans over the Aggregate Expense Rate
and (y) the Pool 2 Optimal Interest Remittance Amount were computed by
reference to the weighted average of the excess of the maximum “lifetime”
Mortgage Rates specified in the related Mortgage Notes for the Pool 2 Mortgage
Loans over the Aggregate Expense Rate.

 

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

 

33

 

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

 

Monthly Excess
Cashflow:  With
respect to any Distribution Date, the sum of (1) the Pool 1 Monthly Excess
Interest and the Pool 2 Monthly Excess Interest for such date and (2) the
Aggregate Overcollateralization Release Amount for such date.

 

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

 

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

 

Mortgage File:  The mortgage documents listed in Section 2.01(b) pertaining
to a particular Mortgage Loan required to be delivered to the Trustee pursuant
to this Agreement.

 

Mortgage Loan:  A Mortgage and the related notes or other
evidences of indebtedness secured by each such Mortgage conveyed, transferred,
sold, assigned to or deposited with the Trustee pursuant to Section 2.01
or Section 2.05, including without limitation each Mortgage Loan listed on
the Mortgage Loan Schedule, as amended from time to time, including any related
REO Property.

 

Mortgage Loan
Purchase Agreement: 
The mortgage loan purchase agreement dated as of [      ],
2005, for the sale of the Mortgage Loans by the Seller to the Depositor.

 

Mortgage Loan
Schedule:  The schedule attached
hereto as Schedule A, which shall identify each Mortgage Loan, as such schedule may
be amended from time to time to reflect the addition of Mortgage Loans to, or
the deletion of Mortgage Loans from, the Trust Fund.  Such schedule shall set forth, among
other things, the following information with respect to each Mortgage Loan: (i) the
Mortgage Loan identifying number; (ii) the Mortgagor’s name; (iii) the
street address of the Mortgaged Property including the city, state and zip
code; (iv) the original principal amount of the Mortgage Loan; (v) the
Mortgage Rate at origination; (vi) the monthly payment of principal and
interest at origination; (vii) the Mortgage Pool in which such Mortgage
Loan is included, and (viii) whether such Mortgage Loan is subject to
Prepayment Premium for voluntary prepayments by the Mortgagor, the term during
which such Prepayment Premiums are imposed and the method of calculations of
the Prepayment Premium.  The Depositor
shall be responsible for providing the Trustee and the Master Servicer with all
amendments to the Mortgage Loan Schedule.

 

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

 

Mortgage Pool:  Either Pool 1 or Pool 2.

 

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

 

34

 

Mortgaged
Property: 
Either of (x) the fee simple interest in real property, together with
improvements thereto including any exterior improvements to be completed within
120 days of disbursement of the related Mortgage Loan proceeds, or (y) in the
case of a Cooperative Loan, the related Cooperative Shares and Proprietary
Lease, securing the indebtedness of the Mortgagor under the related Mortgage Loan.

 

Mortgagee:  The obligee or obligees under a Mortgage
Note.

 

Mortgagor:  The obligor on a Mortgage Note.

 

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

 

Net Funds Cap:  The Pool 1 Net Funds Cap, the Pool 2 Net
Funds Cap or the Subordinate Net Funds Cap, as the context requires.

 

Net
Liquidation Proceeds: 
With respect to any Liquidated Mortgage Loan, the related Liquidation
Proceeds net of (i) unreimbursed expenses and (ii) any unreimbursed
Advances, if any, received and retained in connection with the liquidation of
such Mortgage Loan.

 

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

 

Net Prepayment
Interest Shortfall: 
With respect to any Deposit Date, the excess, if any, of any Prepayment
Interest Shortfalls with respect to the Mortgage Loans for such date over any
amounts paid with respect to such shortfalls by the Servicer and the
Subservicer pursuant to the Servicing Agreement or the Master Servicer,
pursuant to this Agreement.

 

NIMS Agreement:  Any agreement pursuant to which the NIM
Securities are issued.

 

NIMS Insurer:  One or more insurers issuing financial
guaranty insurance policies in connection with the issuance of NIM Securities.

 

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

 

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

 

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

 

35

 

Non-permitted
Foreign Holder: 
As defined in Section 3.03(f).

 

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

 

Notional
Amount:  With
respect to any Notional Certificate and any Distribution Date, such Certificate’s
Percentage Interest of the Class Notional Amount of such Class of
Certificates for such Distribution Date.

 

Notional
Certificate: 
Any Class A-IO Certificate.

 

Offering
Document:  The
Prospectus.

 

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

 

Opinion of
Counsel:  A
written opinion of counsel, reasonably acceptable in form and substance to the
Trustee, and which may be in-house or outside counsel to the Depositor, the
Master Servicer or the Trustee but which must be Independent outside counsel
with respect to any such opinion of counsel concerning the transfer of any
Residual Certificate or concerning certain matters with respect to the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), or the taxation,
or the federal income tax status, of each REMIC.

 

Original
Loan-to-Value Ratio: 
With respect to any Mortgage Loan, the ratio of the principal balance of
such Mortgage Loan at origination, or such other date as is specified, to the
Original Value of the related Mortgage Property.

 

Original Value:  If the Mortgage Loan was made to finance the
acquisition of the related Mortgaged Property, the lesser of (a) the
Appraised Value of a Mortgaged Property at the time the related Mortgage Loan
was originated and (b) the purchase price paid for the Mortgaged Property
by the Mortgagor at the time the related Mortgage Loan was originated.  For all other Mortgage Loans, the Appraised
Value of the related Mortgaged Property at the time the related Mortgage Loan
was originated.

 

Overcollateralization
Amount:  With
respect to any Distribution Date, the amount, if any, by which (x) the
Aggregate Loan Balance for such Distribution Date exceeds (y) the aggregate Class Principal
Amount of the Class 1-A, Class 2-Al, Class 2-A2, Class M1, Class M2,
Class M3, Class M4, Class M5 and Class B Certificates after
giving effect to distributions on such Distribution Date.

 

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

 

36

 

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

 

Paying Agent:  Any paying agent appointed pursuant to Section 3.08.

 

Percentage
Interest:  With
respect to any Certificate, its percentage interest in the undivided beneficial
ownership interest in the Trust Fund evidenced by all Certificates of the same Class as
such Certificate.  With respect to any
Certificate other than the Class A-IO, Class X and Class R
Certificates, the Percentage Interest evidenced thereby shall equal the initial
Certificate Principal Amount thereof divided by the initial Class Principal
Amount of all Certificates of the same Class. 
With respect to the Class X and Class R Certificates, the
Percentage Interest evidenced thereby shall be as specified on the face
thereof, or otherwise be equal to 100%. 
With respect to any Class A-IO Certificate, the Percentage Interest
evidenced thereby shall equal the initial Notional Amount of such Class as
set forth on the face thereof divided by the initial Class Notional Amount
thereof.

 

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

 

Plan:  An employee benefit plan or other retirement
arrangement which is subject to Section 4.06 of ERISA and/or Section 4975
of the Code or any entity whose underlying assets include such plan’s or
arrangement’s assets by reason of their investment in the entity.

 

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

 

Pool Balance:  With respect to each Mortgage Pool or
Subgroup, the aggregate of the Scheduled Principal Balances of all Mortgage
Loans in such Mortgage Pool or Subgroup at the date of determination.

 

Pool 1:  The aggregate of the Mortgage Loans
identified on the Mortgage Loan Schedule as being included in Pool 1.

 

Pool 2:  The aggregate of the Mortgage Loans
identified on the Mortgage Loan Schedule as being included in Pool 2.

 

Pool 1 Monthly
Excess Interest: 
With respect to any Distribution Date, the amount of any Interest
Remittance Amount for Pool 1 remaining after application pursuant to clauses (i) through
(x) of Section 5.02(b) on such date.

 

Pool 2 Monthly
Excess Interest: 
With respect to any Distribution Date, the amount of any Interest
Remittance Amount for Pool 2 remaining after application pursuant to clauses (i) through
(x) of Section 5.02(c) on such date.

 

37

 

Pool 1 Net
Funds Cap:  With
respect to any Distribution Date and the Class 1-A Certificates, a per
annum rate equal to (a) a fraction, expressed as a percentage, the
numerator of which is the product of (i) the Pool 1 Optimal Interest
Remittance Amount for such date and (ii) 12, and the denominator of which
is the Pool Balance for Pool 1 for the immediately preceding Distribution Date multiplied by (b) a fraction, the numerator of which is
30 and the denominator of which is the actual number of days in the Accrual Period
related to such Distribution Date.

 

Pool 2 Net
Funds Cap:  With
respect to any Distribution Date and the Class 2-Al and Class 2-A2
Certificates, a per annum rate equal to (a) a fraction, expressed as a
percentage, the numerator of which is the product of (i) the Pool 2
Optimal Interest Remittance Amount for such date and (ii) 12, and the
denominator of which is the Pool Balance for Pool 2 for the immediately
preceding Distribution Date multiplied by (b) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days in the Accrual Period related to such Distribution Date.

 

Pool 1 Optimal
Interest Remittance Amount:  With respect to each Distribution Date and
the Class 1-A Certificates, (1) the product of (A) (x) the weighted
average of the Net Mortgage Rates of the Pool 1 Mortgage Loans as of the first
day of the related Collection Period, divided
by (y) 12 and (B) the Pool Balance for Pool 1 for the immediately
preceding Distribution Date minus
(2)(A) in the case of the first 18 Distribution Dates only, an amount
equal to the product of (x) [      ]% or, in the
case of the first Accrual Period, [      ]% and
(y) the Component Notional Amount of the A-IO(1) Component immediately
prior to such Distribution Date and (B) thereafter, zero.

 

Pool 2 Optimal
Interest Remittance Amount:  With respect to each Distribution Date and
the Class 2-Al and Class 2-A2 Certificates, (1) the product of (A) (x)
the weighted average of the Net Mortgage Rates of the Pool 2 Mortgage Loans as
of the first day of the related Collection Period, divided by (y) 12 and (B) the Pool Balance for Pool 2
for the immediately preceding Distribution Date minus (2)(A) in the case of the first 18 Distribution
Dates only, an amount equal to the product of (x) [      ]%
or, in the case of the first Accrual Period, [      ]%
and (y) the Component Notional Amount of the A-IO(2) Component immediately
prior to such Distribution Date and (B) thereafter, zero.

 

Pool 1
Subordinate Percentage:  Immediately after any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is the Pool
Subordinate Amount for Pool 1 and the denominator of which is the sum of the
Pool Subordinate Amount for Pool 1 and Pool 2.

 

Pool 2
Subordinate Percentage:  Immediately after any Distribution Date, a
fraction, expressed as a percentage, the numerator of which is the Pool
Subordinate Amount for Pool 2 and the denominator of which is the sum of the
Pool Subordinate Amount for Pool 1 and Pool 2.

 

Pool
Percentage: 
With respect to each Mortgage Pool and any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is the Pool Balance
for such Mortgage Pool for such date and the denominator of which is the
Aggregate Loan Balance for such date.

 

38

 

Pool
Subordinate Amount: 
As to any Mortgage Pool and any Distribution Date, the excess of the
Pool Balance for such Mortgage Pool for such Distribution Date over the
aggregate Class Principal Amount of the Class 1-A Certificates (in
the case of Pool 1) and the Class Principal Amount of the Class 2-Al
and Class 2-A2 Certificates (in the case of Pool 2), in each case,
immediately prior to the related Distribution Date.

 

Prepayment
Interest Excess Amount:  Not applicable.

 

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

 

Prepayment
Period:  The
calendar month immediately preceding the month in which the Servicer Remittance
Date occurs.

 

Prepayment
Premium Schedule: 
As of any date, the list of Prepayment Premiums on the Mortgage Loans
included in the Trust on such date, included as part of the Mortgage Loan Schedule at
Schedule A (including the Prepayment Premium Summary attached
thereto).  The Prepayment Premium Schedule shall
be prepared by the Seller and shall set forth the following information with
respect to each Prepayment Premium:

 

(i)                                     the
Mortgage Loan identifying number;

 

(ii)                                  a
code indicating the type of Prepayment Premium;

 

(iii)                               the
state of origination of the related Mortgage Loan;

 

(iv)                              the
date on which the first Scheduled Payment was due on the related Mortgage Loan;

 

(v)                                 the
term of the related Prepayment Premium; and

 

(vi)                              the
Scheduled Principal Balance of the Mortgage Loan as of the Cut-off Date.

 

Such
Prepayment Charge Schedule shall be amended from time to time by the
Seller and a copy of such amended Prepayment Charge Schedule shall be
furnished by the Seller.

 

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

 

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

 

39

 

Principal
Distribution Amount: 
With respect to each Mortgage Pool and any Distribution Date, an amount
equal to the Principal Remittance Amount for such Mortgage Pool for such date minus the Aggregate Overcollateralization
Release Amount, if any, allocable to such Mortgage Pool, for such Distribution
Date (based on the Pool Percentage).

 

Principal
Prepayment:  Any
Mortgagor payment of principal (other than a Balloon Payment) or other recovery
of principal on a Mortgage Loan that is recognized as having been received or
recovered in advance of its scheduled Due Date and applied to reduce the
principal balance of the Mortgage Loan in accordance with the terms of the
Mortgage Note or the Servicing Agreement.

 

Principal
Remittance Amount: 
With respect to each Mortgage Pool and any Distribution Date, (a) the
sum of (i) all principal collected (other than Payaheads) or advanced in
respect of Scheduled Payments on the Mortgage Loans in such Mortgage Pool
during the related Collection Period whether by the Servicer, the Subservicer,
the Master Servicer or the Trustee (less unreimbursed Advances due to the
Master Servicer, the Servicer, the Subservicer or the Trustee with respect to
the related Mortgage Loans, to the extent allocable to principal), (ii) all
Principal Prepayments in full or in part received during the related Prepayment
Period on the Mortgage Loans in such Mortgage Pool, (iii) the outstanding
principal balance of each Mortgage Loan in such Mortgage Pool that was
purchased from the Trust Fund during the related Prepayment Period, (iv) the
portion of any Substitution Amount paid with respect to any Deleted Mortgage
Loan in such Mortgage Pool during the related Prepayment Period allocable to
principal, and (v) all Net Liquidation Proceeds, Insurance Proceeds and
other recoveries collected with respect to the Mortgage Loans in such Mortgage
Pool during the related Prepayment Period, to the extent allocable to
principal, as reduced by (b) to the extent not reimbursed from the
Interest Remittance Amount, the related Pool Percentage for such date of any
other costs, expenses or liabilities reimbursable to the Trustee, the Master
Servicer, the Trust Administrator, the Custodian, the Servicer and the
Subservicer to the extent provided in this Agreement and the Servicing
Agreement and to the extent the Interest Remittance Amount is less than amounts
reimbursable to the Trustee pursuant to Section 4.04(b)(i), the product of
(x) the applicable Pool Percentage for such Distribution Date and (y) any
amounts reimbursable during the related Anniversary Year to the Trustee
therefrom and not reimbursed from the Interest Remittance Amount, or otherwise;
provided, however, that such
reimbursable amounts from the Interest Remittance Amount and the Principal
Remittance Amount may not exceed $[      ] in the
aggregate during any Anniversary Year. 
In the event that the Trustee incurs reimbursable amounts in excess of
$[      ], it may seek reimbursement for such
amounts in subsequent Anniversary Years, but in no event shall more than $[      ]
be reimbursed to the Trustee per Anniversary Year.  Notwithstanding the foregoing, costs and
expenses incurred by the Trust Administrator pursuant to Section 6.14(a) in
connection with any transfer of servicing shall be excluded from the $[      ]
per Anniversary Year limit on reimbursable amounts.

 

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

 

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

 

40

 

Prospectus:  The prospectus supplement dated [      ],
2005, together with the accompanying prospectus dated [      ],
relating to the Class A, Class M and Class B Certificates.

 

Purchase Price:  With respect to the purchase of a Mortgage
Loan or related REO Property pursuant to this Agreement, an amount equal to the
sum of (a) 100% of the unpaid principal balance of such Mortgage Loan; (b) accrued
interest thereon at the applicable Mortgage Rate, from the date as to which
interest was last paid to (but not including) the Due Date in the Collection
Period immediately preceding the related Distribution Date; (c) the amount
of any costs and damages incurred by the Trust Fund as a result of any
violation of any applicable federal, state or local predatory or abusive
lending law arising from or in connection with the origination of such Mortgage
Loan; (d) the fair market value of all other property being
purchased.  The Master Servicer, the
Servicer and the Subservicer (or the Trustee or the Trust Administrator, if
applicable) shall be reimbursed from the Purchase Price for any Mortgage Loan
or related REO Property for any Advances made or other amounts advanced with
respect to such Mortgage Loan that are reimbursable to the Master Servicer, the
Servicer or the Subservicer under this Agreement or the Servicing Agreement (or
to the Trustee or the Trust Administrator, if applicable), together with any
accrued and unpaid compensation due to the Master Servicer, the Trust
Administrator, the Servicer, the Subservicer or the Trustee hereunder or
thereunder; and (e) the amount of any penalties, fines, forfeitures, legal
fees and related costs, judgements and any other costs, fees and expenses
incurred by or imposed on the Depositor, the Trustee, or the Trust or with
respect to which any of them are liable arising from a breach by the Seller of
its representations and warranties in Section 2.03.

 

QIB:  As defined in Section 3.03(c).

 

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

 

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

 

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

 

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

 

41

 

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

 

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

 

Qualified
Insurer:  An
insurance company duly qualified as such under the laws of the states in which
the related Mortgaged Properties are located, duly authorized and licensed in
such states to transact the applicable insurance business and to write the
insurance provided and whose claims paying ability is rated by each Rating
Agency in its highest rating category or whose selection as an insurer will not
adversely affect the rating of the Certificates.

 

Qualifying
Substitute Mortgage Loan:  In the case of a Mortgage Loan substituted
for a Deleted Mortgage Loan pursuant to the terms of this Agreement, a Mortgage
Loan that, on the date of such substitution, (i) has an outstanding
Scheduled Principal Balance (or in the case of a substitution of more than one
mortgage loan for a Deleted Mortgage Loan, an aggregate Scheduled Principal
Balance), after application of all Scheduled Payments due during or prior to
the month of substitution, not in excess of, and not more than 5% less than,
the outstanding Scheduled Principal Balance of the Deleted Mortgage Loan as of
the Due Date in the calendar month during which the substitution occurs, (ii) has
a Mortgage Rate not less than the Mortgage Rate on the Deleted Mortgage Loan, (iii) if
applicable, has a maximum Mortgage Rate not less than the maximum Mortgage Rate
on the Deleted Mortgage Loan, (iv) has a minimum Mortgage Rate not less
than the minimum Mortgage Rate of the Deleted Mortgage Loan, (v) has a
gross margin equal to or greater than the gross margin of the Deleted Mortgage
Loan, (vi) is not a Cooperative Loan unless the related Deleted Mortgage
Loan was a Cooperative Loan, (vii) has a next adjustment date not later
than the next adjustment date on the Deleted Mortgage Loan, (viii) has the
same Due Date as the Deleted Mortgage Loan, (ix) has a remaining stated
term to maturity not longer than 18 months and not more than 18 months shorter
than the remaining stated term to maturity of the related Deleted Mortgage
Loan, (x) is current as of the date of substitution, (xi) has a Loan-to-Value
Ratio as of the date of substitution equal to or lower than the Loan-to-Value
Ratio of the Deleted Mortgage Loan as of such date, (xii) has been underwritten
by the Seller or in accordance with the same underwriting criteria and
guidelines as the Deleted Mortgage Loan, (xiii) has a risk grading determined
by the Seller at least equal to the risk grading assigned on the Deleted
Mortgage Loan, (xiv) is secured by the same property type as the Deleted
Mortgage Loan, (xv) conforms to each representation and warranty applicable to
the Deleted Mortgage Loan made in the Mortgage Loan Purchase Agreement, (xvi)
has the same or higher lien position as the Deleted Mortgage Loan, (xvii)
contains provisions covering the payment of Prepayment Premium by the Mortgager
for early prepayment of the Mortgage Loan at least as favorable as the Deleted
Mortgage Loan, (xviii) for any Mortgage Loan to be substituted into Pool 1, has
an original Scheduled Principal Balance within the maximum dollar amount
limitations prescribed by FNMA and FHLMC for conforming one-to-four-family mortgage
loans, (xix) is covered by a primary mortgage insurance policy if the Deleted
Mortgage Loan was so covered, (xx) has a maturity date not later than the
maturity date of the latest maturing Mortgage Loan in the Mortgage Pool as of
the Closing Date, (xxi) has the same Mortgage Index as the Deleted Mortgage
Loan; (xxii) if originated on or after November 27, 2003,

 

42

 

is not a “high cost” loan subject to the New Jersey Home Ownership
Security Act of 2003; and (xxiii) if originated on or after January 1,
2004, is not a “high-cost” loan subject to the New Mexico Home Loan Protection
Act.  In the event that one or more
mortgage loans are substituted for one or more Deleted Mortgage Loans, the
amounts described in clause (i) hereof shall be determined on the basis of
aggregate Scheduled Principal Balances, the Mortgage Rates described in clause (ii) hereof
shall be determined on the basis of weighted average Mortgage Rates, the risk
gradings described in clause (xii) hereof shall be satisfied as to each such
mortgage loan, the terms described in clause (viii) hereof shall be
determined on the basis of weighted average remaining term to maturity, the
Loan-to-Value Ratios described in clause (x) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xiv) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.

 

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

 

Realized Loss:  With respect to each Liquidated Mortgage
Loan, an amount equal to (i) the unpaid principal balance of such Mortgage
Loan as of the date of liquidation, minus (ii) Liquidation Proceeds
received, to the extent allocable to principal, net of amounts that are
reimbursable therefrom to the Master Servicer, the Servicer or the Subservicer
with respect to such Mortgage Loan (other than Advances of principal) including
expenses of liquidation.  In determining
whether a Realized Loss is a Realized Loss of principal, Liquidation Proceeds
shall be allocated, first, to payment of expenses related to such Liquidated
Mortgage Loan, then to accrued unpaid interest and finally to reduce the
principal balance of the Mortgage Loan.

 

Recognition
Agreement: 
None.

 

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

 

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

 

Related Senior
Principal Distribution Amount:  For each Mortgage Pool and any Distribution
Date an amount equal to the lesser of (x) the aggregate Class Principal
Amount of the Class 1-A Certificates (with respect to Pool 1) or the Class Principal
Amount of the Class 2-Al and Class 2-A2 Certificates (with respect to
Pool 2) immediately prior to that Distribution Date and (y) the product of (a) the
Senior Principal Distribution Amount and (b) the related Senior
Proportionate Percentage, in each case for such date.

 

Relief Act
Reduction:  With
respect to any Mortgage Loan as to which there has been a reduction in the
amount of interest collectible thereon as a result of application of the Civil
Relief

 

43

 

Act, any amount by which interest collectible on such Mortgage Loan for
the Due Date in the related Due Period is less than interest accrued thereon
for the applicable one-month period at the Mortgage Rate without giving effect
to such reduction.

 

REMIC:  Each pool of assets in the Trust Fund
designated as a REMIC pursuant to Section 10.01(a) hereof.

 

REMIC 1:  As described in the Preliminary Statement.

 

REMIC 2:  As described in the Preliminary Statement.

 

REMIC 3:  As described in the Preliminary Statement.

 

REMIC 4:  As described in the Preliminary Statement.

 

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

 

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

 

Required
Reserve Fund Amount: 
With respect to any Distribution Date on which the Net Excess Spread is
less than [      ]%, the amount, if any by which (a) the
product of [      ]% and the Aggregate Loan
Balance for such date exceeds (b) the amount on deposit in the Basis Risk
Reserve Fund immediately prior to such date. 
With respect to any Distribution Date on which the Net Excess Spread is
equal to or greater than [      ]%, the amount,
if any, by which (i) $1,000 exceeds the amount on deposit in the Basis
Risk Reserve Fund immediately prior to such date; provided,
however, that on any Distribution Date on which the Class Principal
Amount of each Class of LIBOR Certificates has been reduced to zero, the
Required Reserve Fund Amount shall be zero.

 

Residual
Certificate:  The Class R Certificate.

 

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

 

Restricted
Certificate: 
Any Class X or Class R Certificate.

 

Restricted
Global Security: 
As defined in Section 3.01(c).

 

44

 

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

 

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

 

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

 

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

 

Security
Agreement:  With
respect to any Cooperative Loan, the agreement between the owner of the related
Cooperative Shares and the originator of the related Mortgage Note that defines
the terms of the security interest in such Cooperative Shares and the related
Proprietary Lease.

 

Seller:  Fieldstone Mortgage Company, or any successor
in interest.

 

Senior
Certificate: 
Any Class A Certificate.

 

Senior
Enhancement Percentage:  With respect to any Distribution Date, the
fraction, expressed as a percentage, the numerator of which is the sum of the
aggregate Class Principal Amount of the Class M Certificates, the Class B
Certificates and the Overcollateralization Amount (which amount, for purposes
of this definition only, shall not be less than zero and assuming for purposes
of this definition that the Principal Distribution Amount has been distributed
on such Distribution Date and no Trigger Event has occurred) and the
denominator of which is the Aggregate Loan Balance for such Distribution Date,
in each case after giving effect to distributions on such Distribution Date.

 

45

 

Senior
Principal Distribution Amount:  With respect to any Distribution Date (a) prior
to the Stepdown Date or if a Trigger Event is in effect with respect to such
Distribution Date, an amount equal to 100% of the Principal Distribution Amount
for all three Mortgage Pools and (b) on or after the Stepdown Date and as
long as a Trigger Event is not in effect with respect to such Distribution
Date, the lesser of (x) the Principal Distribution Amount for all three
Mortgage Pools and (y) the amount, if any by which (A) the aggregate Class Principal
Amount of the Class 1-A, Class 2-Al and Class 2-A2 Certificates
immediately prior to such Distribution Date exceeds (B) the Senior Target
Amount.

 

Senior
Priorities: 
With respect to each Mortgage Pool, the priority of distributions on the
Class A Certificates described in subsections 5.02(d)(i)(A) and
5.02(d)(i)(B).

 

Senior
Proportionate Percentage:  With respect to Pool 1 and any Distribution
Date, the fraction, expressed as a percentage, the numerator of which is the
Principal Remittance Amount for Pool 1 for such Distribution Date and the
denominator of which is the aggregate of the Principal Remittance Amounts for Pool
1 and Pool 2 for such Distribution Date. 
With respect to Pool 2 and any Distribution Date, the fraction,
expressed as a percentage, the numerator of which is the Principal Remittance
Amount for Pool 2 for such Distribution Date and the denominator of which is
the aggregate of the Principal Remittance Amounts for Pool 1 and Pool 2 for
such Distribution Date.

 

Senior Target
Amount:  With
respect to each Distribution Date, an amount equal to the lesser of (a) the
product of (i) [          ]% and (ii) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the Collection Period and (b) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date determined as of the last day
of the Collection Period exceeds (ii) 0.50% of the Cut-off Date Balance.

 

Servicer
Remittance Date: 
The day in each calendar month on which the Servicer and the Subservicer
are required to remit payments to the Collection Account, as specified in the
Servicing Agreement, which is the 18th day of each calendar month (or, if such
18th day is not a Business Day, the next succeeding Business Day).

 

Servicer:  The Servicer specified in the Servicing
Agreement.

 

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

 

Servicing
Agreement:  The
Securitization Servicing Agreement dated as of [            ],
2005, among the Seller, the Servicer, the Subservicer and the Master Servicer,
and any other

 

46

 

servicing
agreement entered into between a successor servicer or successor subservicer
and the Seller pursuant to the terms of this Agreement.

 

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

 

Servicing Fee
Rate:  With
respect to each Mortgage Loan, the rate specified in the Servicing Agreement.

 

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

 

Simple
Interest Method: 
Not Applicable.

 

Simple
Interest Mortgage Loan:  None.

 

Startup Day:  The day designated as such pursuant to Section 10.01(b) hereof.

 

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

 

Subservicer:  The Subservicer specified in the Servicing
Agreement.

 

Subordinate
Certificate: 
Any Class M1, Class M2, Class M3, Class M4, Class M5,
Class B or Class X Certificate.

 

Subordinate
Net Funds Cap: 
With respect to any Distribution Date will equal the weighted average of
the Pool 1 Net Funds Cap and the Pool 2 Net Funds Cap, weighted on the

 

47

 

basis of the Pool Subordinate
Amount for each Mortgage Pool; provided, however,
that on or after the Distribution Date on which the Certificate Principal
Amounts of the Senior Certificates related to any one of the Mortgage Pools
have been reduced to zero, the Subordinate Net Funds Cap will equal the
weighted average of the Pool 1 Net Funds Cap and the Pool 2 Net Funds Cap, weighted
on the basis of the respective Pool Balances of the Mortgage Pools.

 

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

 

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

 

Targeted
Overcollateralization Amount:  With respect to any Distribution Date (a) prior
to the Stepdown Date, will equal approximately $[            ],
and (b) on or after the Stepdown Date, will equal the lesser of (i) approximately
$[            ] or
[            ]% of
the Cut-off Date Balance and (ii) [            ]%
of the Aggregate Loan Balance for such Distribution Date determined as of the
last day of the related Collection Period, but in no event less than
approximately $[            ]
or [            ]%
of the Cut-off Date Balance.

 

Tax Matters
Person:  The “tax
matters person” as specified in the REMIC Provisions.

 

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

 

Termination
Price:  As
defined in Section 7.01.

 

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

 

Total
Distribution Amount: 
With respect to any Distribution Date, the sum of (i) the aggregate
of the Interest Remittance Amounts for such date; (ii) the aggregate of
the Principal Remittance Amounts for such date; and (iii) all Prepayment
Premiums collected during the related Prepayment Period.

 

Trigger Event:  A Trigger Event shall have occurred with
respect to any Distribution Date if the Rolling Three Month Delinquency Rate as
of the last day of the immediately preceding Collection Period equals or
exceeds [          ]% of the Senior
Enhancement Percentage for such Distribution Date, or (ii) if a Cumulative
Loss Trigger Event shall have occurred.

 

Trust
Administrator: 
Wells Fargo Bank Minnesota, National Association, not in its individual
capacity but solely as Trust Administrator, or any successor in interest, or if
any

 

48

 

successor Trust Administrator
shall be appointed as herein provided, then such successor Trust Administrator.

 

Trust Fund:  The corpus of the trust created pursuant to
this Agreement, consisting of the Mortgage Loans, the assignment of the
Depositor’s rights under the Mortgage Loan Purchase Agreement and the Servicing
Agreement, the Basis Risk Cap and all amounts received from the Cap Provider
thereunder, such amounts as shall from time to time be held in the Collection
Account, Collection Account, any Custodial Account and any Escrow Account, the
Basis Risk Reserve Fund, the Insurance Policies, any REO Property and the other
items referred to in, and conveyed to the Trustee under, Section 2.01(a).  The Class X Cap shall not be an asset of
the Trust Fund, and the Trustee shall hold the Class X Cap separate and
apart from the assets of the Trust Fund, solely for the benefit of the Class X
Certificateholder.

 

Trustee:  [         
], not in its individual capacity but solely as Trustee, or any
successor in interest, or if any successor trustee shall be appointed as herein
provided, then such successor in interest or successor trustee, as the case may
be.

 

Trustee Fee:  A fixed annual fee which is paid by the
Master Servicer from its Master Servicing Fee.

 

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

 

Underwriter:  [         
]

 

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

 

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

 

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

 

Upper Tier
REMIC:  REMIC 4.

 

Voting
Interests:  The
portion of the voting rights of all the Certificates that is allocated to any
Certificate for purposes of the voting provisions of this Agreement.  At all times during the term of this
Agreement, [          ]% of all Voting
Interests shall be allocated to the Class A, Class M and Class B
Certificates.  Voting Interests shall be
allocated among such Certificates based on the product of (i) [          ]% and (ii) the fraction,
expressed as a percentage, the numerator of which is the aggregate Class Principal
Amount of all Certificates then outstanding and the denominator is the
Aggregate Loan Balance then outstanding. 
At all times during the term of this Agreement, [          ]% of all Voting Interests shall be
allocated to each Class of the Class A-IO, 

 

49

 

Class R and Class X
Certificates, while they remain outstanding. 
Voting Interests shall be allocated among the other Classes of
Certificates (and among the Certificates within each such Class) in proportion
to their Class Principal Amounts (or Certificate Principal Amounts) or
Percentage Interests.

 

Section 1.02                                Calculations Respecting Mortgage
Loans.

 

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

 

Section 1.03                                Calculations Respecting Accrued
Interest.

 

Accrued
interest, if any, on the Certificates (other than the Class A-IO
Certificates) shall be calculated based upon a 360-day year and the actual
number of days in each Accrual Period. 
Accrued interest, if any, on the Class A-IO Certificates shall be
calculated based upon a 360-day year consisting of twelve 30-day months, i.e.
30 days’ of interest shall accrue with respect to such Class for each
Distribution Date after the initial Distribution Date.

 

ARTICLE II

DECLARATION OF TRUST;

ISSUANCE OF CERTIFICATES

 

Section 2.01                                Creation and Declaration of
Trust Fund: Conveyance of Mortgage Loans.

 

(a)                                  Concurrently with the execution
and delivery of this Agreement, the Depositor does hereby transfer, assign, set
over, deposit with and otherwise convey to the Trustee, without recourse,
subject to Sections 2.02, 2.04, 2.05 and 2.06, in trust, all the right, title
and interest of the Depositor in and to the Mortgage Loans.  Such conveyance includes, without limitation,
the right to all payments of principal and interest received on or with respect
to the Mortgage Loans on and after the Cut-off Date (other than payments of
principal and interest due on or before such date), and all such payments due
after such date but received prior to such date and intended by the related
Mortgagors to be applied after such date together with all of the Depositor’s
right, title and interest in and to the Collection Account and all amounts from
time to time credited to and the proceeds of the Collection Account and all
amounts from time to time credited to and the proceeds of the Collection Account
and all amounts from time to time credited to and the proceeds of the
Collection Account, any Escrow Account established pursuant to Section 9.06
and any Basis Risk Reserve Fund established pursuant to Section 5.06 and
all amounts from time to time credited to and the proceeds of each such
account, any REO Property and the proceeds thereof, the Depositor’s rights
under any Insurance Policies related to the Mortgage Loans, the Depositor’s
security interest in any collateral pledged to secure the Mortgage Loans,
including the Mortgaged Properties and any Additional Collateral, and any
proceeds of the foregoing, to

 

50

 

have and to hold, in trust; and the Trustee
declares that, subject to the review provided for in Section 2.02, it has
received and shall hold the Trust Fund, as trustee, in trust, for the benefit
and use of the Holders of the Certificates and for the purposes and subject to
the terms and conditions set forth in this Agreement, and, concurrently with
such receipt, has caused to be executed, authenticated and delivered to or upon
the order of the Depositor, in exchange for the Trust Fund, Certificates in the
authorized denominations evidencing the entire ownership of the Trust Fund.

 

Concurrently
with the execution and delivery of this Agreement, the Depositor does hereby
assign to the Trustee all of its rights and interest under the Mortgage Loan
Purchase Agreement, including all rights of the Seller under the Servicing
Agreement, but only to the extent assigned under the Mortgage Loan Purchase
Agreement.  The Trustee hereby accepts
such assignment, and shall be entitled to exercise all the rights of the
Depositor under the Mortgage Loan Purchase Agreement as if, for such purpose,
it were the Depositor.  The foregoing
sale, transfer, assignment, set-over, deposit and conveyance does not and is
not intended to result in the creation or assumption by the Trustee of any
obligation of the Depositor, the Seller or any other Person in connection with
the Mortgage Loans or any other agreement or instrument relating thereto except
as specifically set forth therein.  The
Depositor hereby directs the Trustee, solely in its capacity as Trustee
hereunder, to execute and deliver, concurrently with the execution and delivery
of this Agreement, the Cap Agreement. 
The Trustee shall have no duty or responsibility to enter into any other
interest rate cap agreement upon the expiration or termination of the Cap
Agreement.  The Class X Cap shall
not be an asset of the Trust Fund, and the Trustee shall hold the Class X
Cap separate and apart from the assets of the Trust Fund, solely for the
benefit of the Class X Certificateholder.

 

(b)                                 In connection with such transfer
and assignment, the Depositor does hereby deliver to, and deposit with, or
cause to be delivered to and deposited with, the Trustee, and/or the Custodian
acting on the Trustee’s behalf, the following documents or instruments with
respect to each Mortgage Loan (each a “Mortgage File”) so transferred and assigned:

 

(i)                                     the
original Mortgage Note, endorsed either (A) in blank or (B) in the
form of the Form of Endorsement set forth in Exhibit B-4 hereto, or
with respect to any lost Mortgage Note, an original Lost Note Affidavit, in the
form set forth in Exhibit E hereto, stating that the original Mortgage
Note was lost, misplaced or destroyed, together with a copy of the related
Mortgage Note;

 

(ii)                                  the
original of any guarantee executed in connection with the Mortgage Note
assigned to the Trustee;

 

(iii)                               the
original Mortgage with evidence of recording thereon, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of
attorney, with evidence of recording thereon or, if such Mortgage or power of
attorney has been submitted for recording but has not been returned from the
applicable public recording office, has been lost or is not otherwise
available, a copy of such Mortgage or power of attorney, as the case may be,
certified by an Officer’s Certificate of the Depositor to be a true and
complete copy of the original submitted for recording, together with a written
Opinion of Counsel for the Depositor acceptable to the Trustee that an

 

51

 

original recorded Mortgage is not required to enforce the Trustee’s
interest in the Mortgage Loan;

 

(iv)                              with
respect to each Non-MERS Mortgage Loan, an original Assignment of Mortgage, in
form and substance acceptable for recording. 
The Mortgage shall be assigned either (A) in blank, without recourse,
or (B) to “[          ], as Trustee
of the Fieldstone Mortgage Investment Trust 2005-[     ]”, without recourse or (C) to the
order of the Trustee;

 

(v)                                 an
original copy of any intervening assignment of Mortgage showing a complete
chain of assignments or, in the case of an intervening assignment that has been
lost, a written Opinion of Counsel for the Seller acceptable to the Trustee
that such original intervening assignment is not required to enforce the
Trustee’s interest in the Mortgage Loans;

 

(vi)                              the
original or a certified copy of lender’s title insurance policy (or, in lieu
thereof, a commitment to issue such title insurance policy, with an original or
a certified copy of such title insurance policy to follow as soon after the
Closing Date as reasonably practicable);

 

(vii)                           the
original or copies of each assumption, modification, written assurance or
substitution agreement, if any, or as to any such agreement which cannot be
delivered prior to the Closing Date because of a delay caused by the public
recording office where such assumption, modification or substitution agreement
has been delivered for recordation, a photocopy of such assumption,
modification or substitution agreement, pending delivery of the original
thereof, together with an Officer’s Certificate of the Depositor certifying
that the copy of such assumption, modification or substitution agreement
delivered to the Custodian is a true copy and that the original of such
agreement has been forwarded to the public recording office;

 

(viii)                        an
electronic certification evidencing the existence of the Primary Mortgage
Insurance Policy or certificate, if private mortgage guaranty insurance is
required; and

 

(ix)                                the
original of any security agreement or equivalent instrument executed in connection
with the Mortgage or as to any security agreement or equivalent instrument that
cannot be delivered on or prior to the Closing Date because of a delay caused
by the public recording office where such document has been delivered for
recordation, a photocopy of such document, pending delivery of the original
thereof, together with an Officer’s Certificate of the Depositor certifying
that the copy of such security agreement, chattel mortgage or their equivalent
delivered to the Custodian is a true copy and that the original of such
document has been forwarded to the public recording office.

 

The parties
hereto acknowledge and agree that the form of endorsement attached hereto as Exhibit B-4
is intended to effect the transfer to the Trustee, for the benefit of the
Certificateholders, of the Mortgage Notes and the Mortgages.

 

52

 

(c)                                  MERS is the record owner of all
of the Mortgage Loans.  The Seller shall,
or shall cause the Servicer or the Subservicer, at the expense of the Seller,
to take such actions as are necessary to cause the Trustee to be clearly
identified as the owner of each such Mortgage Loan on the records of MERS for
purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.  With
respect to each Cooperative Loan, the Seller shall, or at its expense, the
Seller shall, or shall cause the Servicer or the Subservicer to, take such
actions as are necessary under applicable law in order to perfect the interest of
the Trustee in the related Mortgaged Property.

 

(d)                                 In instances where a Title
Insurance Policy is required to be delivered to the Trustee or the Custodian on
behalf of the Trustee under clause (b)(vii) above and is not so delivered,
the Seller will provide a copy of such Title Insurance Policy to the Trustee,
or to the Custodian on behalf of the Trustee, as promptly as practicable after
the execution and delivery hereof, but in any case within 180 days of the
Closing Date.

 

(e)                                  For Mortgage Loans (if any) that
have been prepaid in full after the Cut-off Date and prior to the Closing Date,
the Seller, in lieu of delivering the above documents, herewith delivers to any
NIMS Insurer and the Trustee, or to the Custodian on behalf of the Trustee, an
Officer’s Certificate which shall include a statement to the effect that all
amounts received in connection with such prepayment that are required to be
deposited in the Collection Account pursuant to Section 4.01 have been so
deposited.  All original documents that
are not delivered to the Trustee or the Custodian on behalf of the Trustee
shall be held by the Master Servicer, the Servicer or the Subservicer in trust
for the benefit of the Trustee and the Certificateholders.

 

Section 2.02                                Acceptance of Trust Fund by
Trustee: Review of Documentation for Trust Fund.

 

(a)                                  The Trustee, by execution and
delivery hereof, acknowledges receipt by it or by the Custodian on its behalf
of the Mortgage Files pertaining to the Mortgage Loans listed on the Mortgage
Loan Schedule, subject to review thereof by the Trustee, or by the Custodian on
behalf of the Trustee, under this Section 2.02.  The Trustee, or the Custodian on behalf of
the Trustee, will execute and deliver to the Depositor, the Master Servicer,
the Trustee and any NIMS Insurer on the Closing Date an Initial Certification
in the form annexed hereto as Exhibit B-1 (or in the form annexed to the
Custodial Agreement as Exhibit B-1, as applicable).

 

(b)                                 Within 45 days after the Closing
Date, the Trustee or the Custodian on behalf of the Trustee, will, for the
benefit of Holders of the Certificates, review each Mortgage File to ascertain
that all required documents set forth in Section 2.01 have been received
and appear on their face to contain the requisite signatures by or on behalf of
the respective parties thereto, and shall deliver to the Trustee, the
Depositor, the Master Servicer and any NIMS Insurer an Interim Certification in
the form annexed hereto as Exhibit B-2 (or in the form annexed to the
applicable Custodial Agreement as Exhibit B-2, as applicable) to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other
than any Mortgage Loan prepaid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), (i) all
of the applicable documents specified in Section 2.01(b) are in its
possession and (ii) such documents have been reviewed by it and appear to
relate to such Mortgage Loan.  The
Trustee, or the Custodian on behalf of the Trustee, shall determine whether
such documents are executed

 

53

 

and endorsed, but shall be under no duty or
obligation to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that the same are valid, binding,
legally effective, properly endorsed, genuine, enforceable or appropriate for
the represented purpose or that they have actually been recorded or are in
recordable form or that they are other than what they purport to be on their
face.  Neither the Trustee nor the
Custodian shall have any responsibility for verifying the genuineness or the
legal effectiveness of or authority for any signatures of or on behalf of any
party or endorser.

 

(c)                                  If in the course of the review
described in paragraph (b) above the Trustee or the Custodian discovers
any document or documents constituting a part of a Mortgage File that is
missing, does not appear regular on its face (i.e., is mutilated, damaged,
defaced, torn or otherwise physically altered) or appears to be unrelated to
the Mortgage Loans identified in the Mortgage Loan Schedule (each, a “Material
Defect”), the Trustee, or the Custodian on behalf of the Trustee, discovering
such Material Defect shall promptly identify the Mortgage Loan to which such
Material Defect relates in the Interim Certification delivered to the Depositor
and the Master Servicer.  Within 90 days
of its receipt of such notice, the Seller shall be required to cure such
Material Defect (and, in such event, the Seller shall provide the Trustee with
an Officer’s Certificate confirming that such cure has been effected).  If the Seller does not so cure such Material
Defect, the Seller shall, if a loss has been incurred or if a loss is incurred
in the future, with respect to such Mortgage Loan that would, if such Mortgage
Loan were not purchased from the Trust Fund, constitute a Realized Loss, and
such loss is attributable to the failure of the Seller to cure such Material
Defect, repurchase the related Mortgage Loan from the Trust Fund at the
Purchase Price.  A loss shall be deemed
to be attributable to the failure of the Seller to cure a Material Defect if,
as determined by the Seller, upon mutual agreement with the Trustee each acting
in good faith, absent such Material Defect, such loss would not have been
incurred.  Within the two-year period
following the Closing Date, the Seller may, in lieu of repurchasing a Mortgage
Loan pursuant to this Section 2.02, substitute for such Mortgage Loan a
Qualifying Substitute Mortgage Loan subject to the provisions of Section 2.05.  The failure of the Trustee or the Custodian
to give the notice contemplated herein within 45 days after the Closing Date
shall not affect or relieve the Depositor of its obligation to repurchase any
Mortgage Loan pursuant to this Section 2.02 or any other Section of
this Agreement requiring the repurchase of Mortgage Loans from the Trust Fund.

 

(d)                                 Within 180 days following the
Closing Date, the Trustee, or the Custodian, shall deliver to the Trustee, the
Depositor, the Master Servicer and any NIMS Insurer a Final Certification
substantially in the form attached as Exhibit B-3 (or in the form annexed
to the applicable Custodial Agreement as Exhibit B-3, as applicable)
evidencing the completeness of the Mortgage Files in its possession or control,
with any exceptions noted thereto.

 

(e)                                  Nothing in this Agreement shall
be construed to constitute an assumption by the Trust Fund, the Trustee, the
Custodian or the Certificateholders of any unsatisfied duty, claim or other
liability on any Mortgage Loan or to any Mortgagor.

 

(f)                                    Each of the parties hereto
acknowledges that the Custodian shall perform the applicable review of the
Mortgage Loans and respective certifications thereof as provided in this Section 2.02
and the Custodial Agreement.

 

54

 

(g)                                 Upon execution of this
Agreement, the Depositor hereby delivers to the Trustee and the Trustee
acknowledges a receipt of the Mortgage Loan Purchase Agreement and the
Servicing Agreement.

 

Section 2.03                                Representations and Warranties
of the Depositor and the Seller.

 

(a)                                  The Depositor hereby represents
and warrants to the Trustee, for the benefit of Certificateholders and to the
Master Servicer, the Trust Administrator and any NIMS Insurer as of the Closing
Date or such other date as is specified, that:

 

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

 

(ii)                                  Immediately
prior to the transfer by the Depositor to the Trust of each Mortgage Loan, the
Depositor bad good and equitable title to each Mortgage Loan (insofar as such
title was conveyed to it by the Seller) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or other
encumbrance or other interest of any nature;

 

(iii)                               As
of the Closing Date, the Depositor has transferred all right, title and
interest in the Mortgage Loans to the Trust;

 

(iv)                              The
Depositor has not transferred the Mortgage Loans to the Trust with any intent
to hinder, delay or defraud any of its creditors;

 

(v)                                 The
Depositor has been duly organized and is validly existing as a corporation in
good standing under the laws of Delaware, with full power and authority to own
its assets and conduct its business as presently being conducted; and

 

(b)                                 The Seller hereby represents and
warrants to the Trustee, for the benefit of Certificateholders and to the
Master Servicer, the Trust Administrator, the Depositor and any NIMS Insurer as
of the Closing Date or such other date as is specified, that:

 

(i)                                     the
Seller is a Maryland corporation, duly organized validly existing and in good
standing under the laws of the State of Maryland, and has the corporate power
to own its assets and to transact the business in which it is currently
engaged.  The Seller is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or any
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Seller;

 

(ii)                                  the
Seller has the corporate power and authority to make, execute, deliver and
perform this Agreement and all of the transactions contemplated under the

 

55

 

Agreement, and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement.  When executed and delivered, this Agreement
will constitute the legal, valid and binding obligation of the Seller
enforceable in accordance with its terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally and by the availability of equitable
remedies;

 

(iii)                               the
Seller is not required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration with,
any governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement, except for
such consent, license, approval or authorization, or registration or
declaration, as shall have been obtained or filed, as the case may be, prior to
the Closing Date;

 

(iv)                              the
execution, delivery and performance of this Agreement by the Seller will not
violate any provision of any existing law or regulation or any order or decree
of any court applicable to the Seller or any provision of the articles of
association or bylaws of the Seller, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Seller is a party
or by which the Seller may be bound; and

 

(v)                                 no
litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending, or to the knowledge of the Seller
threatened, against the Seller or any of its properties or with respect to this
Agreement which in the opinion of the Seller has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by this
Agreement.

 

(c)                                  The Seller hereby represents and
warrants to the Trustee, for the benefit of Certificateholders and to the
Master Servicer, the Trust Administrator, the Depositor and any NIMS Insurer as
of the Closing Date or such other date as is specified, with respect to the
Mortgage Loans, that:

 

(i)                                     the
information set forth in the Mortgage Loan Schedule relating to the
Mortgage Loans is true and correct in all material respects as of the related
Cut-off Date;

 

(ii)                                  as
of the Closing Date, the Mortgage File relating to each Mortgage Loan contains
each of the documents and instruments specified to be included therein;

 

(iii)                               each
Mortgaged Property is improved by a one- to four-family single family
residential dwelling.  No Mortgaged
Property is a mobile home.  No Mortgaged
Property securing any Mortgage Loans is a manufactured home;

 

(iv)                              each
Mortgage Loan is a closed-end mortgage loan and all amounts due under the
related Mortgage Note have been advanced. 
Each Mortgage Loan has an original term to maturity from the date on
which the first Scheduled Payment is due of not more than 30 years.  No more than [          ]% of the Mortgage Loans are Balloon
Mortgage Loans;

 

56

 

(v)                                 each
Mortgage Note in respect of a Mortgage Loan provides for level monthly payments
sufficient to fully amortize the principal balance of such Mortgage Note on its
maturity date, except for no more than [          ]% of the Mortgage Loans (by Cut-off
Date Balance) which provide for payments of interest only during the first
[five] years of the Mortgage Loan before adjusting to a fully amortizing
Mortgage Loan over the remaining term;

 

(vi)                              except
in the case of Cooperative Loans, if any, each Mortgage requires all buildings
or other improvements on the related Mortgaged Property to be insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the related Mortgaged
Property is located pursuant to insurance policies conforming to the
requirements of the guidelines of FNMA or FHLMC.  If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Flood Insurance
Administration is in effect which policy conforms to the requirements of the
current guidelines of the Federal Flood Insurance Administration.  Each Mortgage obligates the related Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor’s cost and
expense, and on the Mortgagor’s failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor’s cost and
expense, and to seek reimbursement therefor from the Mortgagor.  Where required by state law or regulation,
each Mortgagor has been given an opportunity to choose the carrier of the
required hazard insurance; provided the
policy is not a “master” or “blanket” hazard insurance policy covering the
common facilities of a planned unit development.  The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement;

 

(vii)                           each
Mortgage has not been satisfied, cancelled, subordinated or rescinded, in whole
or in part, and (a) the Mortgaged Property has not been released from the
lien of the Mortgage, in whole or in part, nor has any instrument been executed
that would effect any such release, cancellation, subordination or rescission
and (b) no Mortgagor has been released, in whole or in part, from its
obligations under the related Mortgage Note;

 

(viii)                        each
Mortgage evidences a valid, subsisting, enforceable and perfected first lien on
the related Mortgaged Property, [except for no more than [          ]% of the Mortgage Loans (by Cut-off
Date Balance) which represent second liens on the related Mortgage Property,
(including all improvements on the Mortgaged Property)].  The lien of the Mortgage is subject only to: (1) liens
of current real property taxes and assessments not yet due and payable and, if
the related Mortgaged Property is a condominium unit, any lien for common
charges permitted by statute, (2) covenants, conditions and restrictions,
rights of way, easements and other matters of public record as of the date of
recording of such Mortgage acceptable to mortgage lending institutions in the
area in which the related Mortgaged Property is located and specifically
referred to in the

 

57

 

lender’s Title Insurance Policy or attorney’s opinion of title and
abstract of title delivered to the originator of such Mortgage Loan, and (3) such
other matters to which like properties are commonly subject which do not,
individually or in the aggregate, materially interfere with the benefits of the
security intended to be provided by the Mortgage [and in the case of any second
lien Mortgage Loans, the related First Lien]. 
Any security agreement, chattel mortgage or equivalent document related
to, and delivered to the Trustee in connection with, a Mortgage Loan
establishes a valid, subsisting and enforceable first lien[ or in the case of a
second lien Mortgage Loan], a second lien, on the property described therein and
the Purchaser has full right to sell and assign the same to the Trustee;

 

(ix)                                except
with respect to liens released immediately prior to the transfer herein
contemplated, each Mortgage Note and related Mortgage have not been assigned or
pledged and immediately prior to the transfer and assignment herein
contemplated, the Seller was the sole owner and holder of, each Mortgage Loan
subject to no liens, charges, mortgages, claims, participation interests,
equities, pledges or security interests of any nature, encumbrances or rights
of others (collectively, a “Lien”); the Seller has full right and authority
under all governmental and regulatory bodies having jurisdiction over the
Seller, subject to no interest or participation of, or agreement with, any
party, to sell and assign the same pursuant to this Agreement; and immediately
upon the transfer and assignment herein contemplated, the Seller shall have
transferred all of its right, title and interest in and to each Mortgage Loan
to the Purchaser (or its assignee);

 

(x)                                   no
Mortgage Loan was more than one calendar month delinquent as of the Cut-off
Date; the Seller has not advanced funds to, or induced, solicited or knowingly
received any advance of funds from a party other than the owner of the
Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan;

 

(xi)                                there
is no delinquent tax, fee or assessment lien on any Mortgaged Property, and
each Mortgaged Property is free of material damage and is in good repair;

 

(xii)                             no
Mortgage Loan is subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury, nor will the operation of any of the
terms of any Mortgage Note or Mortgage, or the exercise of any right thereunder,
render either the Mortgage Note or the Mortgage unenforceable in whole or in
part, or subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;

 

(xiii)                          none
of the Mortgage Loans are retail installment contracts for goods or services or
are home improvement loans for goods or services, which would be either “consumer
credit contracts” or “purchase money loans” as such terms are defined in 16
C.F.R. § 433.1;

 

58

 

(xiv)                         no
Mortgagor has or will have a claim or defense against the Seller or any
assignor or assignee of the Seller under any express or implied warranty with
respect to goods or services provided in connection with any Mortgage Loan;

 

(xv)                            the
Mortgage, the Mortgage Note and the other Related Documents contain the entire
agreement of the parties and all obligations of the Seller under the related
Mortgage Loan, and no other agreement defines, modifies or expands the
obligations of the Seller under the Mortgage Loan;

 

(xvi)                         there
is no mechanics’ lien or claim for work, labor or material affecting any
Mortgaged Property which is or may be a lien prior to, or equal or coordinate
with, the lien of the related Mortgage, and no rights are outstanding that
under law could give rise to such a lien except those which are insured against
by the title insurance policy referred to in Section 3.2(xix) below;

 

(xvii)                      each
Mortgage Loan at the time it was made complied with, and each Mortgage Loan at
all times was serviced in compliance with, in each case, in all material
respects, applicable local, state and federal laws and regulations, including,
without limitation, usury, equal credit opportunity, consumer credit,
truth-in-lending and disclosure laws and predatory and abusive lending laws;

 

(xviii)                   with
respect to each Mortgage Loan, either (a) a lender’s title insurance
policy, issued in standard American Land Title Association or California Land
Title Association form, or other form acceptable in a particular jurisdiction,
by a title insurance company authorized to transact business in the state in
which the related Mortgaged Property is situated in an amount at least equal to
the original principal balance of such Mortgage Loan insuring the mortgagee’s
interest under the related Mortgage Loan as the holder of a valid first [or
second mortgage] lien of record on the real property described in the Mortgage,
subject only to the exceptions of the character referred to in Section 3.2(ix) above,
was valid and in full force and effect on the date of the origination of such
Mortgage Loan and as of the Closing Date or (b) an attorney’s opinion of
title was prepared in connection with the origination of such Mortgage Loan;

 

(xix)                           the
improvements upon each Mortgaged Property are covered by a valid and existing
hazard insurance policy with a generally acceptable carrier that provides for
fire and extended coverage representing coverage described in Section 9.15
of this Agreement;

 

(xx)                              a
flood insurance policy is in effect with respect to each Mortgaged Property
with a generally acceptable carrier in an amount representing coverage
described in Sections 9.15 of this Agreement, if and to the extent required by Section 9.15
of this Agreement;

 

(xxi)                           each
Mortgage Note and the related Mortgage are genuine, and each Mortgage and
Mortgage Note is the legal, valid and binding obligation of the related
Mortgagor and is enforceable in accordance with its terms, except only as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or

 

59

 

other similar laws affecting the enforcement of creditors’ rights generally
and by general principles of equity (whether considered in a proceeding or
action in equity or at law), and all parties to each Mortgage Loan and the
Mortgagee had full legal capacity to execute all Mortgage Loan documents and to
convey the estate therein purported to be conveyed.  The Mortgagor is a natural person who is a
party to the Mortgage Note and the Mortgage in an individual capacity, and not
in the capacity of a trustee or otherwise;

 

(xxii)                        no
more than [          ]% of the Mortgage
Loans (by the Cut-off Date Balance) are secured by Mortgaged Properties located
within any single zip code area;

 

(xxiii)                     the
terms of the Mortgage Note and the Mortgage have not been impaired, altered or
modified in any material respect, except by a written instrument included in
the related Mortgage File which has been recorded or is in the process of being
recorded, if necessary to protect the interests of the Noteholders and which
has been or will be delivered to the Trustee. 
The substance of any such alteration or modification is reflected on the
related Mortgage Loan Schedule and was approved, if required, by the
related primary mortgage guaranty insurer, if any.  Each original Mortgage was recorded, and all
subsequent assignments of the original Mortgage have been recorded in the
appropriate jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Seller, or, except as provided in Section 2.2
hereof, are in the process of being recorded;

 

(xxiv)                    except
as provided in subclause (x) above, there are no defaults in complying with the
terms of the Mortgage, and any taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges or ground rents which previously
became due and owing have been paid.  The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required by the Mortgage Note, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage proceeds, whichever is later, to the day which precedes by one
month the Due Date of the first installment of principal and interest;

 

(xxv)                       there
is no proceeding pending or, to the Seller’s knowledge, threatened for the
total or partial condemnation of any Mortgaged Property, nor is such a
proceeding currently occurring, and such property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty, so
as to affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended;

 

(xxvi)                    all
of the improvements which were included for the purpose of determining the
appraised value of the Mortgaged Property lie wholly within the boundaries and
building restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property;

 

(xxvii)                 no
improvement located on or being part of the Mortgaged Property is in violation
of any applicable zoning law or regulation. 
All inspections, licenses and certificates required to be made or issued
with respect to all occupied portions of the

 

60

 

Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities and the Mortgaged Property is lawfully occupied under applicable
law;

 

(xxviii)              the
proceeds of each Mortgage Loan have been fully disbursed, and there is no
obligation on the part of the mortgagee to make future advances
thereunder.  Any and all requirements as
to completion of any on-site or off site improvements and as to disbursements
of any escrow funds therefor have been complied with.  All costs, fees and expenses incurred in
making or closing or recording the Mortgage Loans were paid;

 

(xxix)                      each
Mortgage Note is not and has not been secured by any collateral, pledged
account or other security except the lien of the corresponding Mortgage and, in
certain circumstances, additional real estate collateral;

 

(xxx)                         no
Mortgage Loan is subject to the Home Ownership and Equity Protection Act of
1994;

 

(xxxi)                      there
is no obligation on the part of the Seller or any other party to make payments
in respect of a Mortgage Loan, in addition to those made by the Mortgagor;

 

(xxxii)                   with
respect to each Mortgage constituting a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly designated
and currently so serves and is named in such Mortgage, and no fees or expenses
are or will become payable by the Noteholders to the trustee under the deed of
trust, except in connection with a trustee’s sale after default by the
Mortgagor;

 

(xxxiii)                no
Mortgage Loan contains (i) provisions pursuant to which Scheduled Payments
are (A) paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor or (B) paid by any source other than the Mortgagor or (ii) contains
any other similar provisions which may constitute a “buydown” provision.  No Mortgage Loan has a shared appreciation
feature, or other contingent interest feature;

 

(xxxiv)               [the
related First Lien, if any, requires equal monthly payments, unless such First
Lien is a Balloon Mortgage Loan, or if it bears an adjustable interest rate,
the monthly payments for the related First Lien may be adjusted no more
frequently than monthly;

 

(xxxv)                  either
(a) no consent for the origination of a Mortgage Loan in a second priority
lien position is required by the holder of the related First Lien or (b) such
consent has been obtained and is contained in the Mortgage File;

 

(xxxvi)               with
respect to any First Lien that provides for negative amortization or deferred
interest, the balance of such First Lien used to calculate the Combined
Loan-to-Value Ratio for the Mortgage Loan is based on the maximum amount of
negative amortization possible under such First Lien.  With respect to any First Lien which is an

 

61

 

open-ended loan, the Combined Loan-to-Value Ratio was calculated based
on the maximum amount of principal which the borrower may incur thereunder;

 

(xxxvii)            the
maturity date of the Mortgage Loan is prior to the maturity date of the related
First Lien, if any, if such First Lien provides for a balloon payment.  No Mortgage Loan provides for negative amortization;]

 

(xxxviii)         all
parties which have had any interest in the Mortgage Loan, whether as
originator, mortgagee, assignee, pledgee, servicer or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (a) in
compliance with any and all applicable licensing requirements of the laws of
the state wherein the Mortgaged Property is located, and (b)(l) organized under
the laws of such state, or (2) qualified to do business in such state, or (3) federal
savings and loan associations or national banks having principal offices in
such state, or (4) not doing business in such state so as to require
qualification or licensing;

 

(xxxix)                 the
Mortgage contains a customary provision for the acceleration of the payment of
the unpaid principal balance of the Mortgage Loan in the event the related
security for the Mortgage Loan is sold without the prior consent of the
mortgagee thereunder;

 

(xl)                                any
future advances made prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term
reflected on the related Mortgage Loan Schedule.  The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan.  The Mortgage Note does not permit or obligate
the Seller to make future advances to the Mortgagor at the option of the
Mortgagor;

 

(xli)                             the
Mortgage contains customary and enforceable provisions which render the rights
and remedies of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security, including, (a) in the
case of a Mortgage designated as a deed of trust, by trustee’s sale, and (b) otherwise
by judicial or non-judicial foreclosure. 
Since the date of origination of the Mortgage Loan, the Mortgaged
Property has not been subject to any bankruptcy proceeding or foreclosure
proceeding and the Mortgagor has not filed for protection under applicable
bankruptcy laws.  To the best of Seller’s
knowledge, there is no homestead or other exemption available to the Mortgagor,
which would interfere with the right to sell the Mortgaged Property at a
trustee’s sale or the right to foreclose the Mortgage.  The Mortgagor has not notified the Seller and
neither the Seller nor the Servicer has any knowledge of any relief requested
or allowed to the Mortgagor under the Servicemembers Civil Relief Act;

 

(xlii)                          except
as provided in subclause (x), there is no default, breach, violation or event
of acceleration existing under any Mortgage or the related Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of
acceleration; and the Seller has not waived any default, breach, violation or
event of acceleration;

 

62

 

(xliii)                       all
parties to the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have been
duly and properly executed by such parties;

 

(xliv)                      all
amounts received after the Cut-off Date with respect to the Mortgage Loans to
which the Seller is not entitled will be deposited into the Collection Account
as of the Closing Date;

 

(xlv)                         all
of the Mortgage Loans were originated in accordance with the underwriting
criteria set forth in the Prospectus Supplement; At least [          ]% and
[         ]% of the Mortgage Loans
in Loan Group 1 and Loan Group 2, respectively (by Cut-off Date Loan Group
Principal Balance), were originated pursuant to one of the Seller’s full
documentation origination programs; no more than [          ]% and [          ]% of the Mortgage Loans in Loan
Group 1 and Loan Group 2, respectively (by Cut-off Date Loan Group Principal
Balance), were originated pursuant to one of the Seller’s stated documentation
origination programs; and no more than [          ]% and [          ]% of the Mortgage Loans in Loan Group
1 and Loan Group 2, respectively (by Cut-off Date Loan Group Principal
Balance), were originated pursuant to one of the Seller’s six-month bank
statement programs;

 

(xlvi)                      each
Mortgage Loan conforms, and all such Mortgage Loans in the aggregate conform,
to the description thereof set forth in the Prospectus Supplement; each
Mortgage Note and Mortgage is in substantially the form approved by FNMA or
FHLMC or one of the forms attached as an exhibit to the Trust Agreement;

 

(xlvii)                   the
Mortgage Loans were not selected by the Seller for inclusion in the Trust on
any basis intended to adversely affect the Trust;

 

(xlviii)                all
appraisals were performed by qualified independent appraisers after analysis of
other sales of properties in the area in which the related Mortgaged Property
is located, and a full interior inspection appraisal was performed on forms
acceptable to either FNMA or FHLMC in connection with each Mortgaged Property;

 

(xlix)                        each
hazard insurance policy required to be maintained under Section 9.15 of
this Agreement with respect to the Mortgage Loan is a valid, binding,
enforceable and subsisting insurance policy of its respective kind and is in
full force and effect;

 

(l)                                     each
Mortgage Loan was (i) originated by the Seller or an affiliate of the Seller,
or by a savings and loan association, a savings bank, a commercial bank or
similar banking institution which is supervised and examined by a federal or
state authority, or by a mortgagee approved as such by the Secretary of HUD or (ii) acquired
by the Seller directly through loan brokers or correspondents such that (a) the
Mortgage Loan was originated in conformity with the Seller’s underwriting
guidelines, (b) the Seller approved the Mortgage Loan prior to funding and
(c) the Seller provided the funds used to originate the Mortgage Loan and
acquired the Mortgage Loan on the date of origination thereof;

 

63

 

(li)                                  the
Mortgage File contains an appraisal of the related Mortgaged Property signed
prior to the approval of the Mortgage Loan application by a qualified
appraiser, duly appointed by the originator of the Mortgage Loan, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan and who met the minimum qualifications of
Fannie Mae or Freddie Mac;

 

(lii)                               in
the event the Mortgage constitutes a deed of trust, a trustee, duly qualified
under applicable law to serve as such, has been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are
or will become payable by the Purchaser to the trustee under the deed of trust,
except, in connection with a trustee’s sale after default by the Mortgagor;

 

(liii)                            each
Mortgaged Property is located in the state identified on the related Mortgage
Loan Schedule and consists of a single parcel of real property with a
one-family residence erected thereon, or an attached or detached or semi-detached
two- to four-family dwelling, or an individual condominium unit, or an
individual unit in a planned unit development. 
With respect to each Cut-off Date Loan Group Principal Balance (a) no
more than [          ]% and [          ]% of the Mortgage Loans in Loan
Group 1 and Loan Group 2, respectively (by Cut-off Date Loan Group Principal
Balance), are secured by real property improved by two- to four-family or
multifamily dwellings.  No Mortgaged
Property is held under a ground lease;

 

(liv)                           no
Mortgage Loan had a Combined Loan-to-Value Ratio at the time of origination of
more than 100%;

 

(lv)                              no
more than [          ]% and [          ]% of the Mortgage Loans in Loan
Group 1 and Loan Group 2, respectively (by Cut-off Date Loan Group Principal
Balance), are secured by Mortgaged Properties that are investment properties;

 

(lvi)                           the
Mortgage Note is not and has not been secured by any collateral, pledged
account or other security except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel mortgage
referred to in Section 3.1 (viii);

 

(lvii)                        each
Mortgage Loan was originated on or after [          ];

 

(lviii)                     the
Seller has not transferred the Mortgage Loans to the Purchaser with any intent
to hinder, delay or defraud any of the Seller’s creditors;

 

(lix)                             to
the best of the Seller’s knowledge, no improvement located on or being part of
the related Mortgaged Property is in violation of any applicable zoning law or
regulation and all inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the related Mortgaged
Property and, with respect to the use and occupancy of the same, including but
not limited to certificates of occupancy, have been made or obtained from the
appropriate authorities and such Mortgaged Property is lawfully occupied under
applicable law;

 

64

 

(lx)                                for
purposes of the REMIC Provisions, each Mortgage Loan is an obligation which
satisfies the test set forth below in either clause (a) or clause (b):

 

(A)                              the
fair market value, as reduced by the amount of any lien on such property that
is senior to the lien securing such property and further reduced by the
proportionate amount of any lien in parity with such obligation, of the
interest in real property securing the obligation was at least equal to 80% of
the adjusted issue price of the obligation at the time the obligation was
originated or is at least equal to 80% of the adjusted issue price of the
obligation at the time the obligation is contributed to the REMIC, or

 

(B)                                substantially
all of the proceeds of the obligation were used to acquire or to improve or
protect an interest in real property that, at the origination date, is the only
security for the obligation;

 

(lxi)                             [Reserved];

 

(lxii)                          there
do not exist any circumstances or conditions with respect to the Mortgage Loan,
the Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that
can be reasonably expected to materially adversely affect the value or
marketability of the Mortgage Loan;

 

(lxiii)                       each
of the documents and instruments included in a Mortgage File is duly executed
and in due and proper form and each such document or instrument is in a form
generally acceptable to prudent institutional mortgage lenders that regularly
originate or purchase mortgage loans. 
The Mortgage or an assignment of mortgage has been recorded in the name
of MERS, as nominee for the holder from time to time of the related Mortgage
Note;

 

(lxiv)                      no
Mortgage Loan is a construction loan;

 

(lxv)                         the
Seller is in possession of a complete Mortgage File, except those documents
delivered as directed by the Purchaser, and there are no custodial agreements
in effect adversely affecting the right or ability of the Seller to make the
document deliveries required hereby;

 

(lxvi)                      no
Mortgaged Property was, as of the Closing Date, located within a one-mile
radius of any site listed in the National Priorities List as defined under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, or on any similar state list of hazardous waste sites which are
known to contain any hazardous substance or hazardous waste;

 

(lxvii)                   to
the best of the Seller’s knowledge, the Mortgaged Property is lawfully occupied
under applicable law and all inspections, licenses and certificates required to
be made or issued with respect to all occupied portions of the related
Mortgaged Property and, with respect to the use and occupancy of the same, including
but not limited to certificates of occupancy, had been made or obtained from
the appropriate authorities;

 

65

 

(lxviii)                the
Seller has no knowledge of any toxic or hazardous substances affecting the
Mortgaged Property or any violation of any local, state, or federal
environmental law, rule, or regulation. 
The Seller has no knowledge of any pending action or proceeding directly
involving any Mortgaged Property in which compliance with any environmental
law, rule, or regulation is an issue;

 

(lxix)                        none
of the Mortgage Loans is subject to a bankruptcy plan;

 

(lxx)                           the
collection practices used by the Seller with respect to the Mortgage Loans have
been, in all material respects, legal, proper, prudent and customary in the
non-conforming mortgage servicing business. 
The Mortgage Loans have been serviced in accordance with the terms of
the Mortgage Notes and applicable law. 
With respect to escrow deposits and Escrow Payments, if any, all such
payments are in the possession of, or under the control with, the Seller, and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made.  No escrow deposits or Escrow Payments or
other charges or payments due the Seller have been capitalized under any
Mortgage or the related Mortgage Note;

 

(lxxi)                        the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Purchaser pursuant to this Agreement are not subject to the bulk transfer
laws or any similar statutory provisions in effect in any applicable
jurisdiction;

 

(lxxii)                     no
Mortgage Loans which are secured in property located within the State of
Georgia are “high-cost loans” as defined by the Georgia Fair Lending Act of
2002 or any other applicable predatory and abusive lending legislation;

 

(lxxiii)                  none
of the Mortgage Notes that evidence or constitute the Mortgage Loans has any
marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Indenture Trustee;

 

(lxxiv)                 no
Mortgage Loan is a “high-cost,” “high-cost home,” “covered,” “high-risk home”
or “predatory” loan under any applicable federal, state or local predatory or
abusive lending law; and no Mortgage Loan originated on or after November 27,
2003, is a “high cost” loan subject to the New Jersey Home Ownership Security
Act of 2003;

 

(lxxv)                    no
Mortgage Loan originated on or after January 1, 2004 is a “highcost” loan
subject to the New Mexico Home Loan Protection Act;

 

(lxxvi)                 with
respect to the Mortgage Loans in Loan Group 1:

 

(A)                              No
Mortgage Loan was originated on or after October 1, 2002 and before March 7,
2003 which is secured by property located in the State of Georgia and no
Mortgage Loan that was originated on or after March 7, 2003, which is a “high
cost home loan” as defined under the Georgia Fair Lending Act;

 

(B)                                The
servicer for each Mortgage Loan in Loan Group 1 has fully furnished in the past
(and the Seller shall cause any applicable servicer to furnish

 

66

 

in the
future), in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans Union
Credit Information Company, on a monthly basis;

 

(C)                                The
Cut-off Date Balance of each such Mortgage Loan in Loan Group 1 does not exceed
the maximum original loan amount limitations set forth in the Freddie Mac
Seller/Servicer Guide with respect to first lien, one-to-four family
residential mortgage loans;

 

(D)                               No
Mortgage Loan in Loan Group 1 was at the time of origination subject to the
Home Ownership and Equity Protection Act of 1994 (15 USC § 1602(c)),
Regulation Z (12 CFR 226.32) or any comparable state law;

 

(E)                                 With
respect to any Mortgage Loan in Group 1 originated on or after August 1,
2004, neither the related Mortgage nor the related Mortgage Note requires the
borrower to submit to arbitration to resolve any dispute arising out of or
relating in any way to the Mortgage Loan transaction.

 

(lxxvii)              the
information set forth in the Prepayment Premium Schedule included as part
of the Mortgage Loan Schedule (including the Prepayment Premium Summary
attached thereto) is complete, true and correct in all material respects on the
date or dates on which such information is furnished and each Prepayment
Premium is permissible and enforceable in accordance with its terms (except to
the extent that the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws affecting creditor’s
rights generally or the collectibility thereof may be limited due to
acceleration in connection with foreclosure) under applicable state law.

 

(lxxviii)           the
Mortgagor has executed a statement to the effect that the Mortgagor has
received all disclosure materials required by applicable law with respect to
the making of a refinanced Mortgage Loan, and evidence of such receipt is and
will remain in the Mortgage File;

 

(lxxix)                   to
the best of the Seller’s knowledge, no error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any person, including, without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the origination of the Mortgage Loan or in the application of any insurance
in relation to such Mortgage Loan;

 

(lxxx)                      no
Mortgage Loan has a balloon payment feature;

 

(lxxxi)                   to
the best of the Seller’s knowledge, no statement, report or other document
constituting a part of the Mortgage File contains any material untrue statement
of fact or omits to state a fact necessary to make the statements contained
therein not misleading which would, either individually or in the aggregate,
have a material adverse effect on the value of the Mortgage Loans;

 

67

 

(lxxxii)                no
proceeds from any Mortgage Loan were used to finance single-premium credit
insurance policies;

 

(lxxxiii)             the
Seller has no specific information that provides Seller any reason to believe
that any borrower will default under a Mortgage Loan, or that foreclosure
proceedings will be commenced with respect to any such Mortgage Loan, within
the six months immediately following the Closing Date;

 

(lxxxiv)            no
Mortgage Loan imposes a Prepayment Premium for a term in excess of three years;

 

(lxxxv)               all
Mortgage Loans were originated in compliance with all applicable laws,
including, but not limited to, all applicable anti-predatory lending laws;

 

(lxxxvi)            no
Mortgage Loan is a “High Cost Loan” or “Covered Loan”, as applicable (as such
terms are defined in the then current Standard & Poor’s LEVELS
Glossary, Appendix E) and no Mortgage Loan originated on or after October 1,
2002 through March 6, 2003 is governed by the Georgia Fair Lending Act;

 

(lxxxvii)         no
Mortgage Loan is either (a) a “high-cost home” loan as defined in the New
Jersey Home Ownership Act effective November 27, 2003 (“NJHOA”) or (b) a
“high cost” loan as defined in the New Mexico Home Loan Protection Act
effective January 1, 2003 (“NMHLPA”), and that based on its review of the
NJHOA and the NMHLPA, the Mortgage Loans will qualify under the safe harbor
provisions of the NJHOA and the NMHLPA; and

 

(lxxxviii)      No
Mortgage Loan that is secured by property located in Illinois is in violation
of the provisions of the Illinois Interest Act (815 Ill. Comp. Stat. 205/1 et
seq.).

 

(d)                                 To the extent that any fact,
condition or event with respect to a Mortgage Loan constitutes a breach of a
representation or warranty of the Seller under the Mortgage Loan Purchase
Agreement, the only right or remedy of the Trustee, any Certificateholder or
any NIMS Insurer hereunder shall be their rights to enforce the obligations of
the Seller under any applicable representation or warranty made by it.  The Trustee acknowledges that the Depositor
shall have no obligation or liability with respect to any breach of any
representation or warranty with respect to the Mortgage Loans (except as set
forth in Section 2.03(a)(vi)) under any circumstances.

 

Section 2.04                                Discovery of Breach.

 

It is
understood and agreed that the representations and warranties (i) of the
Depositor set forth in Section 2.03, (ii) of the Seller set forth in Section 2.03
and (iii) of the Servicer and the Subservicer assigned by the Seller to
the Depositor pursuant to the Mortgage Loan Purchase Agreement and to the
Trustee pursuant to the Servicing Agreement, shall each survive delivery of the
Mortgage Files and the Assignment of Mortgage of each Mortgage Loan to the
Trustee and shall continue throughout the term of this Agreement.  With respect to the representations and
warranties which are made to the best of the Seller’s knowledge, if it is
discovered by the Depositor, the Seller, the Trust Administrator, the Trustee,
the Master Servicer, the Servicer or

 

68

 

the Subservicer that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the Mortgage Loans or the
interests of the Certificateholders or the Trustee therein, notwithstanding
such Seller’s lack of knowledge with respect to the substance of such
representation or warranty, remedies for breach will apply to such
inaccuracy.  Any breach of the
representation and warranty set forth in clauses (xxi), (xxxiv), (lxxii),
(lxxiv), (lxxv), (lxxvi), (lxxxv), (lxxxvi), (lxxxvii) and (lxxxviii) of Section 3.2
of the Mortgage Loan Purchase Agreement shall be deemed to materially and
adversely affect the interest of the Trust in that Mortgage Loan,
notwithstanding the Seller’s lack of knowledge with respect to the substance of
such representation and warranty.  Upon
discovery by any of the Depositor, the Master Servicer, the Trust Administrator
or the Trustee of a breach of any of such representations and warranties made
by the Seller that adversely and materially affects the value of the related
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.  Within 60
days of the discovery by the Seller of a breach of any representation or
warranty given to the Trustee by the Seller or the Seller’s receipt of written
notice of such a breach, the Seller shall either (a) cure such breach in
all material respects, (b) repurchase such Mortgage Loan or any property
acquired in respect thereof from the Trustee at the Purchase Price (or, with
respect to Mortgage Loans as to which there is a breach of a representation or
warranty set forth in Section 3.2 of the Mortgage Loan Purchase Agreement,
at the purchase price therefor paid by the Seller under the Mortgage Loan
Purchase Agreement) or (c) within the two-year period following the
Closing Date, substitute a Qualifying Substitute Mortgage Loan for the affected
Mortgage Loan.

 

Section 2.05                                Repurchase, Purchase or
Substitution of Mortgage Loans.

 

(a)                                  With respect to any Mortgage
Loan repurchased by the Seller pursuant to this Agreement, the principal
portion of the funds received by the Trust Administrator in respect of such
repurchase of a Mortgage Loan will be considered a Principal Prepayment and the
Purchase Price shall be deposited in the Collection Account or the Custodial
Account, as applicable.  Upon receipt by
the Trust Administrator of the full amount of the Purchase Price for a Deleted
Mortgage Loan, or upon receipt of notification from the Custodian that it had
received the Mortgage File for a Qualifying Substitute Mortgage Loan substituted
for a Deleted Mortgage Loan (and any applicable Substitution Amount), the
Trustee shall release or cause to be released and reassign to the Depositor or
the Seller, as applicable, the related Mortgage File for the Deleted Mortgage
Loan and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, representation or warranty, as shall be
necessary to vest in such party or its designee or assignee title to any
Deleted Mortgage Loan released pursuant hereto, free and clear of all security
interests, liens and other encumbrances created by this Agreement, which
instruments shall be prepared by the related Servicer and the Trustee shall
have no further responsibility with respect to the Mortgage File relating to
such Deleted Mortgage Loan.  The Seller
indemnifies and holds the Trust Fund, the Master Servicer, the Trust
Administrator, the Trustee, the Depositor, and NIMS Insurer and each
Certificateholder harmless against any and all taxes, claims, losses,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trust Fund, the
Trustee, the Master Servicer, the Trust Administrator, the Depositor, any NIMS
Insurer and any Certificateholder may sustain in connection with any actions of
such Seller relating to a repurchase of a Mortgage Loan other than in
compliance with the terms of this Section 2.05 and the Mortgage Loan
Purchase Agreement, to the extent that any such action causes an Adverse REMIC
Event.

 

69

 

(b)                                 With respect to each Qualifying
Substitute Mortgage Loan to be delivered to the Trust Administrator (or the
Custodian) pursuant to the terms of this Article II in exchange for a
Deleted Mortgage Loan: (i) the Seller must deliver to the Trustee (or the
Custodian) the Mortgage File for the Qualifying Substitute Mortgage Loan
containing the documents set forth in Section 2.01(b) along with a
written certification certifying as to the delivery of such Mortgage File and
containing granting language substantially comparable to that set forth in the
first paragraph of Section 2.01(a); and (ii) the Seller will be
deemed to have made, with respect to such Qualifying Substitute Mortgage Loan,
each of the representations and warranties made by it with respect to the
related Deleted Mortgage Loan.  As soon
as practicable after the delivery of any Qualifying Substitute Mortgage Loan
hereunder, the Trustee, at the expense of the Seller and at the direction and
with the cooperation of the Servicer or the Subservicer, shall (i) with
respect to a Qualifying Substitute Mortgage Loan that is a Non-MERS Mortgage
Loan, cause the Assignment of Mortgage to be recorded by the Servicer or the
Subservicer if required pursuant to Section 2.01(c), or (ii) with
respect to a Qualifying Substitute Mortgage Loan that is a MERS Mortgage Loan,
cause to be taken such actions as are necessary to cause the Trustee to be
clearly identified as the owner of each such Mortgage Loan on the records of
MERS if required pursuant to Section 2.01(c).

 

(c)                                  Notwithstanding any other
provision of this Agreement, the right to substitute Mortgage Loans pursuant to
this Article II shall be subject to the additional limitations that no
substitution of a Qualifying Substitute Mortgage Loan for a Deleted Mortgage
Loan shall be made unless the Trustee and any NIMS Insurer has received an
Opinion of Counsel addressed to the Trustee (at the expense of the party
seeking to make the substitution) that, under current law, such substitution
will not cause an Adverse REMIC Event.

 

Section 2.06                                Grant Clause.

 

(a)                                  It is intended that the
conveyance of the Depositor’s right, title and interest in and to property
constituting the Trust Fund pursuant to this Agreement shall constitute, and
shall be construed as, a sale of such property and not a grant of a security
interest to secure a loan.  However, if
such conveyance is deemed to be in respect of a loan, it is intended that: (1) the
rights and obligations of the parties shall be established pursuant to the
terms of this Agreement; (2) the Depositor hereby grants to the Trustee
for the benefit of the Holders of the Certificates a first priority security
interest to secure repayment of an obligation in an amount equal to the
aggregate Class Principal Amount of the Certificates in all of the
Depositor’s right, title and interest in, to and under, whether now owned or
hereafter acquired, the Trust Fund and all proceeds of any and all property
constituting the Trust Fund to secure payment of the Certificates; and (3) this
Agreement shall constitute a security agreement under applicable law.  If such conveyance is deemed to be in respect
of a loan and the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person holding any Certificate, the security
interest created hereby shall continue in full force and effect and the Trustee
shall be deemed to be the collateral agent for the benefit of such Person, and
all proceeds shall be distributed as herein provided.

 

(b)                                 The Depositor shall, to the
extent consistent with this Agreement, take such reasonable actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans and the other property described above, such
security

 

70

 

interest would be deemed to be a perfected
security interest of first priority under applicable law and shall be
maintained as such throughout the term of this Agreement.  The Depositor shall, at its own expense, make
all initial filings on or about the Closing Date and shall forward a copy of
such filing or filings to the Trustee. 
Without limiting the generality of the foregoing, the Depositor shall
prepare and forward for filing, or shall cause to be forwarded for filing, at
the expense of the Depositor, all filings necessary to maintain the
effectiveness of any original filings necessary under the relevant UCC to
perfect the Trustee’s security interest in or lien on the Mortgage Loans,
including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of the Seller,
the Depositor or the Trustee, (2) any change of location of the
jurisdiction of organization of the Seller or the Depositor, (3) any
transfer of any interest of the Seller or the Depositor in any Mortgage Loan or
(4) any change under the relevant UCC or other applicable laws.  Neither the Seller nor the Depositor shall
organize under the law of any jurisdiction other than the State under which
each is organized as of the Closing Date (whether changing its jurisdiction of
organization or organizing under an additional jurisdiction) without giving 30
days prior written notice of such action to its immediate and intermediate
transferee, including the Trustee. 
Before effecting such change, the Seller or the Depositor proposing to
change its jurisdiction of organization shall prepare and file in the
appropriate filing office any financing statements or other statements
necessary to continue the perfection of the interests of its immediate and
mediate transferees, including the Trustee, in the Mortgage Loans.  In connection with the transactions
contemplated by this Agreement, each of the Seller and the Depositor authorizes
its immediate or mediate transferee to file in any filing office any initial
financing statements, any amendments to financing statements, any continuation
statements, or any other statements or filings described in this paragraph (b).

 

ARTICLE III

THE CERTIFICATES

 

Section 3.01                                The Certificates.

 

(a)                                  The Certificates shall be
issuable in registered form only and shall be securities governed by Article 8
of the New York Uniform Commercial Code. 
The Book-Entry Certificates will be evidenced by one or more
certificates, beneficial ownership of which will be held in the dollar
denominations in Certificate Principal Amount, or Notional Principal Amount, as
applicable, or in the Percentage Interests, specified herein.  Each Class of Book-Entry Certificates
will be issued in the minimum denominations in Certificate Principal Amount (or
Notional Amount) specified in the Preliminary Statement hereto and in integral
multiples of $1 in excess thereof.  The Class X
Certificate and the Class R Certificate shall each be issued as a single
Certificate and maintained in definitive, fully registered form in a minimum
denomination equal to 100% of the Percentage Interest of such Class.  The Certificates may be issued in the form of
typewritten certificates.

 

(b)                                 The Certificates shall be
executed by manual or facsimile signature on behalf of the Trust Administrator
by an authorized officer.  Each
Certificate shall, on original issue, be authenticated by the Trust
Administrator upon the order of the Depositor upon receipt by the Trustee of
the Mortgage Files described in Section 2.01.  No Certificate shall be entitled to any

 

71

 

benefit under this Agreement, or be valid for
any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein, executed by an
authorized officer of the Trust Administrator or the Authenticating Agent, if
any, by manual signature, and such certification upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. 
All Certificates shall be dated the date of their authentication.  At any time and from time to time after the
execution and delivery of this Agreement, the Depositor may deliver
Certificates executed by the Depositor to the Trust Administrator or the
Authenticating Agent for authentication and the Trust Administrator or the
Authenticating Agent shall authenticate and deliver such Certificates as in
this Agreement provided and not otherwise.

 

(c)                                  [Reserved].

 

Section 3.02                                Registration.

 

The Trust
Administrator is hereby appointed, and hereby accepts its appointment as,
Certificate Registrar in respect of the Certificates and shall maintain books
for the registration and for the transfer of Certificates (the “Certificate
Register”).  A registration book shall be
maintained for the Certificates collectively. 
The Certificate Registrar may resign or be discharged or removed and a
new successor may be appointed in accordance with the procedures and
requirements set forth in Sections 6.06 and 6.07 hereof with respect to the
resignation, discharge or removal of the Trust Administrator and the
appointment of a successor Trust Administrator. 
The Certificate Registrar may appoint, by a written instrument delivered
to the Holders, any NIMS Insurer and the Master Servicer, any bank or trust
company to act as co-registrar under such conditions as the Certificate
Registrar may prescribe; provided, however,
that the Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment.

 

Section 3.03                                Transfer and Exchange of
Certificates.

 

(a)                                  A Certificate (other than
Book-Entry Certificates which shall be subject to Section 3.09 hereof) may
be transferred by the Holder thereof only upon presentation and surrender of
such Certificate at the office of the Certificate Registrar duly endorsed or
accompanied by an assignment duly executed by such Holder or his duly
authorized attorney in such form as shall be satisfactory to the Certificate
Registrar.  Upon the transfer of any
Certificate in accordance with the preceding sentence, the Trust Administrator
shall execute, and the Trust Administrator or any Authenticating Agent shall
authenticate and deliver to the transferee, one or more new Certificates of the
same Class and evidencing, in the aggregate, the same aggregate
Certificate Principal Amount as the Certificate being transferred.  No service charge shall be made to a
Certificateholder for any registration of transfer of Certificates, but 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 registration
of transfer of Certificates.

 

(b)                                 A Certificate may be exchanged
by the Holder thereof for any number of new Certificates of the same Class, in
authorized denominations, representing in the aggregate the same Certificate
Principal Amount or Percentage Interest as the Certificate surrendered, upon
surrender of the Certificate to be exchanged at the office of the Certificate
Registrar duly

 

72

 

endorsed or accompanied by a written
instrument of transfer duly executed by such Holder or his duly authorized
attorney in such form as is satisfactory to the Certificate Registrar.  Certificates delivered upon any such exchange
will evidence the same obligations, and will be entitled to the same rights and
privileges, as the Certificates surrendered. 
No service charge shall be made to a Certificateholder for any exchange
of Certificates, but 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 exchange of Certificates. 
Whenever any Certificates are so surrendered for exchange, the Trust
Administrator shall execute, and the Trust Administrator or the Authenticating
Agent shall authenticate, date and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive.

 

(c)                                  By acceptance of a Restricted
Certificate, whether upon original issuance or subsequent transfer, each Holder
of such a Certificate acknowledges the restrictions on the transfer of such
Certificate set forth thereon and agrees that it will transfer such a
Certificate only as provided herein.

 

The following
restrictions shall apply with respect to the transfer and registration of
transfer of a Restricted Certificate to a transferee that takes delivery in the
form of a Definitive Certificate:

 

(i)                                     The
Certificate Registrar shall register the transfer of a Restricted Certificate
if the requested transfer is (x) to the Depositor or the Placement Agent, an
affiliate (as defined in Rule 405 under the 1933 Act) of the Depositor or the
Placement Agent or (y) being made to a “qualified institutional buyer” (a “QIB”)
as defined in Rule 1 44A under the Securities Act of 1933, as amended (the
“Act”) by a transferor that has provided the Trust Administrator with a
certificate in the form of Exhibit F hereto; and

 

(ii)                                  The
Certificate Registrar shall register the transfer of a Restricted Certificate
if the requested transfer is being made to an “accredited investor” under Rule 50l(a)(1),
(2), (3) or (7) under the Act, or to any Person all of the equity
owners in which are such accredited investors, by a transferor who furnishes to
the Trust Administrator a letter of the transferee substantially in the form of
Exhibit G hereto.

 

(d)                                 No transfer of an
ERISA-Restricted Certificate in the form of a Definitive Certificate shall be
made to any Person unless the Trust Administrator has received (A) a
certificate substantially in the form of Exhibit H hereto (or Exhibit D-1,
in the case of a Residual Certificate) from such transferee or (B) an
Opinion of Counsel satisfactory to the Trust Administrator, to the effect that
the purchase and holding of such a Certificate will not constitute or result in
prohibited transactions under Title I of ERISA or Section 4975 of the Code
and will not subject the Trustee, the Master Servicer, the Trust Administrator,
the NIMS Insurer or the Depositor to any obligation in addition to those
undertaken in the Agreement; provided, however,
that the Trust Administrator will not require such certificate or opinion in
the event that, as a result of a change of law or otherwise, counsel
satisfactory to the Trust Administrator, has rendered an opinion to the effect
that the purchase and holding of an ERISA-Restricted Certificate by a Plan or a
Person that is purchasing or holding such a Certificate with the assets of a
Plan will not constitute or result in a prohibited transaction under Title I of
ERISA or Section 4975 of the Code. 
Each Transferee of an ERISA-Restricted Certificate that is a Book-

 

73

 

Entry Certificate shall be deemed to have
made the representations set forth in Exhibit H.  The preparation and delivery of the
certificate and opinions referred to above shall not be an expense of the Trust
Fund, the Trustee, the Master Servicer, the Trust Administrator, any NIMS
Insurer or the Depositor.

 

Notwithstanding
the foregoing, no opinion or certificate shall be required for the initial
issuance of the ERISA-Restricted Certificates. 
The Trust Administrator shall have no obligation to monitor transfers of
Book-Entry Certificates that are ERISA-Restricted Certificates and shall have
no liability for transfers of such Certificates in violation of the transfer
restrictions.  The Trust Administrator
shall be under no liability to any Person for any registration of transfer of
any ERISA-Restricted Certificate that is in fact not permitted by this Section 3.03(d) or
for making any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of this
Agreement so long as the transfer was registered by the Trust Administrator in
accordance with the foregoing requirements. 
The Trustee and the Trust Administrator shall be entitled, but not
obligated, to recover from any Holder of any ERISA-Restricted Certificate that
was in fact a Plan or a Person acting on behalf of any such Plan any payments
made on such ERISA-Restricted Certificate at and after either such time.  Any such payments so recovered by the Trustee
or the Trust Administrator shall be paid and delivered by the Trustee or the
Trust Administrator to the last preceding Holder of such Certificate that is
not such a Plan or Person acting on behalf of a Plan.

 

(e)                                  As a condition of the
registration of transfer or exchange of any Certificate, the Certificate
Registrar may require the certified taxpayer identification number of the owner
of the Certificate and the payment of a sum sufficient to cover any tax or
other governmental charge imposed in connection therewith; provided,
however, that the Certificate Registrar shall have no obligation to
require such payment or to determine whether or not any such tax or charge may
be applicable.  No service charge shall
be made to the Certificateholder for any registration, transfer or exchange of
a Certificate.

 

(f)                                    Notwithstanding anything to the
contrary contained herein, no Residual Certificate may be owned, pledged or
transferred, directly or indirectly, by or to (i) a Disqualified
Organization or (ii) an individual, corporation or partnership or other
person unless such person is (A) not a Non-U.S. Person or (B) is a
Non-U.S. Person that holds a Residual Certificate in connection with the
conduct of a trade or business within the United States and has furnished the
transferor and the Trust Administrator with an effective Internal Revenue
Service W-8ECI or successor form at the time and in the manner required by the
Code (any such person who is not covered by clause (A) or (B) above
is referred to herein as a “Non-permitted Foreign Holder”).

 

Prior to and
as a condition of the registration of any transfer, sale or other disposition
of a Residual Certificate, the proposed transferee shall deliver to the Trust
Administrator an affidavit in substantially the form attached hereto as Exhibit D-1
representing and warranting, among other things, that such transferee is
neither a Disqualified Organization, an agent or nominee acting on behalf of a
Disqualified Organization, nor a Non-Permitted Foreign Holder (any such
transferee, a “Permitted Transferee”), and the proposed transferor shall
deliver to the Trust Administrator an affidavit in substantially the form
attached hereto as Exhibit D-2.  In
addition, the Trust Administrator may (but shall have no obligation to)
require, prior to and as a condition

 

74

 

of any such transfer, the
delivery by the proposed transferee of an Opinion of Counsel, addressed to the
Depositor, the Master Servicer, the Trust Administrator, any NIMS Insurer and the
Trustee satisfactory in form and substance to the Depositor, that such proposed
transferee or, if the proposed transferee is an agent or nominee, the proposed
beneficial owner, is not a Disqualified Organization, agent or nominee thereof,
or a Non-Permitted Foreign Holder. 
Notwithstanding the registration in the Certificate Register of any
transfer, sale, or other disposition of a Residual Certificate to a
Disqualified Organization, an agent or nominee thereof, or Non-Permitted
Foreign Holder, such registration shall be deemed to be of no legal force or
effect whatsoever and such Disqualified Organization, agent or nominee thereof,
or Non-Permitted Foreign Holder shall not be deemed to be a Certificateholder
for any purpose hereunder, including, but not limited to, the receipt of
distributions on such Residual Certificate. 
The Trust Administrator shall not be under any liability to any person
for any registration or transfer of a Residual Certificate to a Disqualified
Organization, agent or nominee thereof or Non-permitted Foreign Holder or for
the maturity of any payments due on such Residual Certificate to the Holder
thereof or for taking any other action with respect to such Holder under the
provisions of the Agreement, so long as the transfer was effected in accordance
with this Section 3.03(f), unless a Responsible Officer of the Trust
Administrator shall have actual knowledge at the time of such transfer or the
time of such payment or other action that the transferee is a Disqualified
Organization, or an agent or nominee thereof, or Non-permitted Foreign
Holder.  The Trust Administrator shall be
entitled, but not obligated, to recover from any Holder of a Residual
Certificate that was a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder at the time it became a Holder or any subsequent
time it became a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder, all payments made on such Residual Certificate at
and after either such times (and all costs and expenses, including but not
limited to attorneys’ fees, incurred in connection therewith).  Any payment (not including any such costs and
expenses) so recovered by the Trust Administrator shall be paid and delivered
to the last preceding Holder of such Residual Certificate.

 

If any
purported transferee shall become a registered Holder of a Residual Certificate
in violation of the provisions of this Section 3.03(f), then upon receipt
of written notice to the Trust Administrator that the registration of transfer
of such Residual Certificate was not in fact permitted by this Section 3.03(f),
the last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of such registration of transfer of such
Residual Certificate.  The Trust
Administrator shall be under no liability to any Person for any registration of
transfer of a Residual Certificate that is in fact not permitted by this Section 3.03(f),
for making any payment due on such Certificate to the registered Holder thereof
or for taking any other action with respect to such Holder under the provisions
of this Agreement so long as the transfer was registered upon receipt of the
affidavit described in the preceding paragraph of this Section 3.03(f).

 

(g)                                 Each Holder or Certificate Owner
of a Restricted Certificate, ERISA-Restricted Certificate or Residual
Certificate, or an interest therein, by such Holder’s or Owner’s acceptance
thereof, shall be deemed for all purposes to have consented to the provisions
of this section.

 

(h)                                 [Reserved].

 

75

 

Section 3.04                                Cancellation of Certificates.

 

Any
Certificate surrendered for registration of transfer or exchange shall be
cancelled and retained in accordance with normal retention policies with
respect to cancelled certificates maintained by the Trust Administrator or the
Certificate Registrar.

 

Section 3.05                                Replacement of Certificates.

 

If (i) any
Certificate is mutilated and is surrendered to the Trust Administrator or any
Authenticating Agent or (ii) the Trust Administrator or any Authenticating
Agent receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and there is delivered to the Trust Administrator and the
Authenticating Agent and any NIMS Insurer such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Depositor and any Authenticating Agent that such destroyed, lost or
stolen Certificate has been acquired by a bona fide purchaser, the Trust
Administrator shall execute and the Trust Administrator or any Authenticating
Agent 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 Certificate Principal Amount. 
Upon the issuance of any new Certificate under this Section 3.05,
the Trust Administrator and Authenticating Agent may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trust Administrator or the Authenticating Agent) connected
therewith.  Any replacement Certificate
issued pursuant to this Section 3.05 shall constitute complete and
indefeasible evidence of ownership in the applicable Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.

 

Section 3.06                                Persons Deemed Owners.

 

Subject to the
provisions of Section 3.09 with respect to Book-Entry Certificates, the
Depositor, the Master Servicer, the Trust Administrator, the Trustee, the
Certificate Registrar, any NIMS Insurer and any agent of any of them may treat
the Person in whose name any Certificate is registered upon the books of the
Certificate Registrar as the owner of such Certificate for the purpose of
receiving distributions pursuant to Sections 5.01 and 5.02 and for all other
purposes whatsoever, and neither the Depositor, the Master Servicer, the Trust
Administrator, the Trustee, the Certificate Registrar, any NIMS Insurer nor any
agent of any of them shall be affected by notice to the contrary.

 

Section 3.07                                Temporary Certificates.

 

(a)                                  Pending the preparation of
definitive Certificates, upon the order of the Depositor, the Trust
Administrator shall execute and shall authenticate and deliver temporary
Certificates that are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Certificates in lieu of which they are issued and with such
variations as the authorized officers executing such Certificates may
determine, as evidenced by their execution of such Certificates.

 

(b)                                 If temporary Certificates are
issued, the Depositor will cause definitive Certificates to be prepared without
unreasonable delay.  After the
preparation of definitive

 

76

 

Certificates, the temporary Certificates
shall be exchangeable for definitive Certificates upon surrender of the
temporary Certificates at the office or agency of the Trust Administrator
without charge to the Holder.  Upon
surrender for cancellation of any one or more temporary Certificates, the Trust
Administrator shall execute and authenticate and deliver in exchange therefor a
like aggregate Certificate Principal Amount of definitive Certificates of the
same Class in the authorized denominations.  Until so exchanged, the temporary
Certificates shall in all respects be entitled to the same benefits under this
Agreement as definitive Certificates of the same Class.

 

Section 3.08                                Appointment of Paving Agent.

 

The Trust
Administrator is hereby appointed to act as the initial Paying Agent for the
purpose of making distributions to Certificateholders hereunder.  Upon the resignation or removal of the Trust
Administrator, the Trustee, subject to the consent of the NIMS Insurer, may
appoint a successor Paying Agent (which may be the Trustee).  The Trustee shall cause such successor Paying
Agent to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee that such Paying Agent will hold all sums
held by it for the payment to Certificateholders in an Eligible Account in
trust for the benefit of the Certificateholders entitled thereto until such
sums shall be paid to the Certificateholders. 
All funds remitted by the Trust Administrator to any such Paying Agent
for the purpose of making distributions shall be paid to Certificateholders on
each Distribution Date and any amounts not so paid shall be returned on such
Distribution Date to the Trustee.  If the
Paying Agent is not the Trust Administrator, the Trust Administrator shall
cause to be remitted to the Paying Agent on or before the Business Day prior to
each Distribution Date, by wire transfer in immediately available funds, the
funds to be distributed on such Distribution Date.  Any Paying Agent shall be either a bank or
trust company or otherwise authorized under law to exercise corporate trust
powers.

 

Section 3.09                                Book-Entry Certificates.

 

(a)                                  Each Class of Book-Entry
Certificates, upon original issuance, shall be issued in the form of one or
more typewritten Certificates representing the Book-Entry Certificates.  The Book-Entry Certificates shall initially
be registered on the Certificate Register in the name of the nominee of the
Clearing Agency, and no Certificate Owner will receive a definitive certificate
representing such Certificate Owner’s interest in the Book-Entry Certificates,
except as provided in Section 3.09(c). 
Unless Definitive Certificates have been issued to Certificate Owners of
Book-Entry Certificates pursuant to Section 3.09(c):

 

(i)                                     the
provisions of this Section 3.09 shall be in full force and effect;

 

(ii)                                  the
Depositor, the Master Servicer, the Trust Administrator, the Paying Agent, the
Registrar, any NIMS Insurer and the Trustee may deal with the Clearing Agency
for all purposes (including the making of distributions on the Book-Entry
Certificates) as the authorized representatives of the Certificate Owners and
the Clearing Agency shall be responsible for crediting the amount of such
distributions to the accounts of such Persons entitled thereto, in accordance
with the Clearing Agency’s normal procedures;

 

77

 

(iii)                               to
the extent that the provisions of this Section 3.09 conflict with any
other provisions of this Agreement, the provisions of this Section 3.09
shall control; and

 

(iv)                              the
rights of Certificate Owners shall be exercised only through the Clearing
Agency and the Clearing Agency Participants and shall be limited to those
established by law and agreements between such Certificate Owners and the
Clearing Agency and/or the Clearing Agency Participants.  Unless and until Definitive Certificates are
issued pursuant to Section 3.09(c), the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive and
transmit distributions of principal of and interest on the Book-Entry Certificates
to such Clearing Agency Participants.

 

(b)                                 Whenever notice or other
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 3.09(c), the Trustee and the Trust
Administrator shall give all such notices and communications specified herein
to be given to Holders of the Book-Entry Certificates to the Clearing Agency.

 

(c)                                  If (i) (A) the
Depositor advises the Trustee in writing that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities with respect to the
Book-Entry Certificates, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor, at its option, advises the Trustee
and the Trust Administrator in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than 50% of the Class Principal Amount of a
Class of Book-Entry Certificates identified as such to the Trustee by an
Officer’s Certificate from the Clearing Agency advise the Trustee, the Trust
Administrator and the Clearing Agency through the Clearing Agency Participants
in writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of the Certificate Owners of a Class of
Book-Entry Certificates, the Trust Administrator shall notify any NIMS Insurer
and shall notify or cause the Certificate Registrar to notify the Clearing
Agency to effect notification to all Certificate Owners, through the Clearing
Agency, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same.  Upon surrender to the Trust Administrator of
the Book-Entry Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Trust Administrator
shall issue the Definitive Certificates. 
Neither the Depositor nor the Trust Administrator 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 Certificates
all references herein to obligations imposed upon or to be performed by the
Clearing Agency shall be deemed to be imposed upon and performed by the Trust
Administrator, to the extent applicable, with respect to such Definitive
Certificates and the Trustee and the Trust Administrator shall recognize the
holders of the Definitive Certificates as Certificateholders hereunder.  Notwithstanding the foregoing, the Trust
Administrator, upon the instruction of the Depositor, shall have the right to
issue Definitive Certificates on the Closing Date in connection with credit
enhancement programs.

 

78

 

ARTICLE IV

ADMINISTRATION OF THE TRUST FUND

 

Section 4.01                                Collection Account.

 

(a)                                  On the Closing Date, the Trust
Administrator shall open and shall thereafter maintain a segregated account
held in trust (the “Collection Account”), entitled “Collection Account”, as
Trust Administrator, in trust for the benefit of the Holders of Fieldstone
Mortgage Investment Trust 2005-[   ]”.  The Collection Account shall relate solely to
the Certificates issued by the Trust Fund hereunder, and funds in such
Collection Account shall not be commingled with any other monies.

 

(b)                                 The Collection Account shall be
an Eligible Account.  If an existing
Collection Account ceases to be an Eligible Account, the Trust Administrator
shall establish a new Collection Account that is an Eligible Account within 10
days and transfer all funds and investment property on deposit in such existing
Collection Account into such new Collection Account.

 

(c)                                  The Trust Administrator shall
give to the Trustee prior written notice of the name and address of the
depository institution at which the Collection Account is maintained and the
account number of such Collection Account. 
The Trust Administrator shall take such actions as are necessary to
cause the depository institution holding the Collection Account to hold such
account in the name of the Trust Administrator under this Agreement.

 

(d)                                 The Trust Administrator shall
deposit or cause to be deposited into the Collection Account, no later than the
Business Day following the Closing Date, any amounts received with respect to
the Mortgage Loans representing Scheduled Payments on the Mortgage Loans due
after the Cut-off Date and unscheduled payments received on or after the
Cut-off Date and on or before the Closing Date. 
Thereafter, the Trust Administrator shall deposit or cause to be
deposited in the Collection Account on the earlier of the applicable Servicer
Remittance Date and one Business Day following receipt thereof, the following
amounts received by it (other than in respect of principal of and interest on
the Mortgage Loans due on or before the Cut-off Date):

 

(i)                                     all
payments on account of principal, including Principal Prepayments and Late
Collections, on the Mortgage Loans;

 

(ii)                                  all
payments on account of interest on the Mortgage Loans, including Prepayment
Premiums, in all cases, net of the Servicing Fee with respect to each such
Mortgage Loan, but only to the extent of the amount permitted to be withdrawn
or withheld from the Collection Account in accordance with Sections 5.04 and
9.21;

 

(iii)                               any
unscheduled payment or other recovery with respect to a Mortgage Loan not
otherwise specified in this paragraph (d), including all Net Liquidation
Proceeds with respect to the Mortgage Loans and REO Property, and all amounts
received in connection with the operation of any REO Property, net of (x) any
unpaid Servicing Fees with respect to such Mortgage Loans (but only to the
extent of the amount permitted to be withdrawn or withheld from the Collection
Account in accordance with Sections 5.04 and

 

79

 

9.21) and (y) any amounts reimbursable to the Servicer with respect to
such Mortgage Loan under the Servicing Agreement and retained by the Servicer;

 

(iv)                              all
Insurance Proceeds;

 

(v)                                 all
Advances made by the Master Servicer, the Servicer and the Subservicer pursuant
to Section 5.04 or the Servicing Agreement;

 

(vi)                              all
amounts paid by the Servicer and the Subservicer with respect to Prepayment
Interest Shortfalls and any Compensating Interest Payment made by the Master
Servicer; and

 

(vii)                           the
Purchase Price of any Mortgage Loan repurchased by the Depositor, the Seller,
the Master Servicer or any other Person and any Substitution Amount related to
any Qualifying Substitute Mortgage Loan and any purchase price paid by any NIMS
Insurer for the purchase of any Distressed Mortgage Loan under Section 7.04.

 

(e)                                  Funds in the Collection Account
may be invested in Eligible Investments selected by and at the written
direction of the Master Servicer, which shall mature not later than one
Business Day prior to the Distribution Date (except that if such Eligible
Investment is an obligation of the Trust Administrator, then such Eligible
Investment shall mature not later than such applicable Distribution Date) and
any such Eligible Investment shall not be sold or disposed of prior to its
maturity.  All such Eligible Investments
shall be made in the name of the Trust Administrator in trust for the benefit
of the Trustee and Holders of Fieldstone Mortgage Investment Trust 2005-[  ].  All
income and gain realized from any Eligible Investment shall be for the benefit
of the Master Servicer and shall be subject to its withdrawal or order from
time to time, subject to Section 5.05 hereof, and shall not be part of the
Trust Fund.  The amount of any losses
incurred in respect of any such investments shall be deposited in such
Collection Account by the Master Servicer out of its own funds, without any
right of reimbursement therefor, immediately as realized.  The foregoing requirements for deposit in the
Collection Account are exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments of interest on funds in the
Collection Account and payments in the nature of late payment charges,
assumption fees and other incidental fees and charges relating to the Mortgage
Loans (other than Prepayment Premiums) need not be deposited by the Trust
Administrator, Master Servicer, Servicer or the Subservicer in the Collection
Account and may be retained by the Master Servicer, the Servicer or the
Subservicer as additional servicing compensation.  If the Trust Administrator deposits in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from such Collection Account.

 

Section 4.02                                Application of Funds in the
Collection Account.

 

The Trust
Administrator may, from time to time, make, or cause to be made, withdrawals
from the Collection Account for the following purposes:

 

(i)                                     to
reimburse the Master Servicer, the Servicer and Subservicer for Advances or
Servicing Advances made by it, by the Servicer or by the Subservicer pursuant
to Section 5.04 of the Servicing Agreement; such right to reimbursement
pursuant to this subclause (i) is limited to amounts received on or in
respect of a

 

80

 

particular Mortgage Loan (including, for this purpose, Liquidation
Proceeds and amounts representing Insurance Proceeds with respect to the
property subject to the related Mortgage) which represent late recoveries (net
of the Servicing Fee) of payments of principal or interest respecting which any
such Advance was made, it being understood, in the case of any such
reimbursement, that the Master Servicer’s, the Servicer’s or the Subservicer’s
right thereto shall be prior to the rights of the Certificateholders;

 

(ii)                                  to
reimburse the Master Servicer, the Servicer and the Subservicer, following a
final liquidation of a Mortgage Loan (except as otherwise provided in the
Servicing Agreement) for any previously unreimbursed Advances made by it, by
the Servicer and by the Subservicer (A) that it determines in good faith
will not be recoverable from amounts representing late recoveries of payments
of principal or interest respecting the particular Mortgage Loan as to which
such Advance was made or from Liquidation Proceeds or Insurance Proceeds with
respect to such Mortgage Loan and/or (B) to the extent that such
unreimbursed Advances exceed the related Liquidation Proceeds or insurance
Proceeds, it being understood, in the case of each such reimbursement, that
such Master Servicer’s, Servicer’s and Subservicer’s right thereto shall be
prior to the rights of the Certificateholders;

 

(iii)                               to
reimburse the Master Servicer, the Servicer or the Subservicer from Liquidation
Proceeds for Liquidation Expenses and for amounts expended by it pursuant to Section 9.22(c) or
the Servicing Agreement in good faith in connection with the restoration of
damaged property and, to the extent that Liquidation Proceeds after such
reimbursement exceed the unpaid principal balance of the related Mortgage Loan,
together with accrued and unpaid interest thereon at the applicable Mortgage
Rate less the Master Servicing Fee Rate and the Servicing Fee Rate for such
Mortgage Loan to the Due Date next succeeding the date of its receipt of such
Liquidation Proceeds, to pay to itself out of such excess the amount of any
unpaid assumption fees, late payment charges or other Mortgagor charges on the
related Mortgage Loan and to retain any excess remaining thereafter as
additional servicing compensation, it being understood, in the case of any such
reimbursement or payment, that such Master Servicer’s, Servicer’s or the
Subservicer’s right thereto shall be prior to the rights of the
Certificateholders;

 

(iv)                              to
reimburse the Master Servicer, the Servicer or the Subservicer for expenses
incurred by and recoverable by or reimbursable to it, the Servicer or the
Subservicer pursuant to Sections 9.04, 9.05(b), 9.07(a), 9.30 or 11.15;

 

(v)                                 to
pay to the Depositor or the Seller, as applicable, with respect to each
Mortgage Loan or REO Property acquired in respect thereof that has been
purchased pursuant to this Agreement, all amounts received thereon and not
distributed on the date on which the related repurchase was effected, and to
pay to the applicable Person any Advances and Servicing Advances to the extent
specified in the definition of Purchase Price;

 

(vi)                              subject
to Section 5.05, to pay to the Master Servicer income earned on the
investment of funds deposited in the Collection Account;

 

81

 

(vii)                           to
make payment to the Trustee pursuant to any provision of this Agreement or to
reimburse itself for any expenses reimbursable to it pursuant to Section 6.12;
provided, however, that any amounts in
excess of the annual cap described in clause (b) of the definition of “Interest
Remittance Amount” and clause (b) of the definition of “Principal
Remittance Amount” in any Anniversary Year, other than costs and expenses
incurred by the Trustee pursuant to Section 6.14, in connection with any
transfer of servicing, shall not be withdrawn from the Collection Account and
paid to the Trustee and the Trustee’s reimbursement for such excess amounts
shall be made pursuant to Section 5.02(b) and 5.02(c) hereof;

 

(viii)                        to
make distributions to Certificateholders pursuant to Article V;

 

(ix)                                to
make payment to itself, the Master Servicer and others pursuant to any
provision of this Agreement;

 

(x)                                   to
withdraw funds deposited in error in the Collection Account;

 

(xi)                                to
clear and terminate the Collection Account pursuant to Section 7.02;

 

(xii)                             to
reimburse a successor Master Servicer (solely in its capacity as successor
Master Servicer), for any fee or advance occasioned by a termination of the
Master Servicer, and the assumption of such duties by the Trust Administrator
or a successor Master Servicer appointed by the Trustee pursuant to Section 6.14,
in each case to the extent not reimbursed by the terminated Master Servicer, it
being understood, in the case of any such reimbursement or payment, that the
right of the Master Servicer or the Trust Administrator thereto shall be prior
to the rights of the Certificateholders; and

 

(xiii)                          to
reimburse the Servicer and the Subservicer for such amounts as are due thereto
under the Servicing Agreement and have not been retained by or paid to the
Servicer and the Subservicer, to the extent provided in the Servicing
Agreement.

 

In connection
with withdrawals pursuant to subclauses (i), (iii), (iv), (vi) and (vii) above,
the Master Servicer’s, the Servicer’s, the Subservicer’s or such other Person’s
entitlement thereto is limited to collections or other recoveries on the
related Mortgage Loan.  The Master
Servicer shall therefore keep and maintain a separate accounting for each
Mortgage Loan it master services for the purpose of justifying any withdrawal
from the Collection Account it maintains pursuant to such subclause (i), (iii),
(iv) and (vi).

 

Section 4.03                                Reports to Certificateholders.

 

(a)                                  On each Distribution Date, the
Trust Administrator shall have prepared (based solely on information provided
by the Master Servicer) and shall make available to the Trustee, any NIMS
Insurer and each Certificateholder a report setting forth the following
information (on the basis of Mortgage Loan level information obtained from the Servicer):

 

(i)                                     the
aggregate amount of the distribution to be made on such Distribution Date to
the Holders of each Class of Certificates other than any Class of
Notional Certificates, to the extent applicable, allocable to principal on the
Mortgage

 

82

 

Loans, including Liquidation Proceeds and Insurance Proceeds, stating
separately the amount attributable to scheduled principal payments and
unscheduled payments in the nature of principal;

 

(ii)                                  the
aggregate amount of the distribution to be made on such Distribution Date to
the Holders of each Class of Certificates allocable to interest and the
calculation thereof;

 

(iii)                               the
amount, if any, of any distribution to the Holders of the Class X
Certificate and the Residual Certificate;

 

(iv)                              (A) the
aggregate amount of any Advances required to be made by or on behalf of the
Servicer, the Subservicer (or the Master Servicer) with respect to such
Distribution Date, (B) the aggregate amount of such Advances actually made,
and (C) the amount, if any, by which (A) above exceeds (B) above;

 

(v)                                 by
Mortgage Pool and in the aggregate, the total number of Mortgage Loans, the
aggregate Scheduled Principal Balance of all the Mortgage Loans as of the close
of business on the last day of the related Collection Period, after giving
effect to payments allocated to principal reported under clause (i) above;

 

(vi)                              the
Class Principal Amount (or Class Notional Amount) of each Class of
Certificates, to the extent applicable, as of such Distribution Date after
giving effect to payments allocated to principal reported under clause (i) above,
separately identifying any reduction of any of the foregoing Certificate
Principal Amounts due to Applied Loss Amounts;

 

(vii)                           the
amount of all Prepayment Premiums distributed to the Class X Certificates;

 

(viii)                        by
Mortgage Pool, and in the aggregate, the amount of any Realized Losses incurred
with respect to the Mortgage Loans (x) in the applicable Prepayment Period and
(y) in the aggregate since the Cut-off Date;

 

(ix)                                the
amount of the Master Servicing Fees and the Servicing Fees paid during the
Collection Period to which such distribution relates;

 

(x)                                   the
number and aggregate Scheduled Principal Balance of Mortgage Loans, as reported
to the Master Servicer by the Servicer or Subservicer, (a) remaining
outstanding (b) Delinquent 30 to 59 days on a contractual basis, (c) Delinquent
60 to 89 days on a contractual basis, (d) Delinquent 90 or more days on a
contractual basis, (e) as to which foreclosure proceedings have been
commenced as of the close of business on the last Business Day of the calendar
month immediately preceding the month in which such Distribution Date occurs, (f) in
bankruptcy and (g) that are REO Properties;

 

(xi)                                the
aggregate Scheduled Principal Balance of any Mortgage Loans in any Mortgage
Pool with respect to which the related Mortgaged Property became a REO

 

83

 

Property as of the close of business on the last Business Day of the calendar
month immediately preceding the month in which such Distribution Date occurs;

 

(xii)                             with
respect to substitution of Mortgage Loans in the preceding calendar month, the
Scheduled Principal Balance of each Deleted Mortgage Loan, and of each Qualifying
Substitute Mortgage Loan;

 

(xiii)                          the
aggregate outstanding Carryforward Interest, Net Prepayment Interest
Shortfalls, Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls, if any, for
each Class of Certificates, after giving effect to the distribution made
on such Distribution Date;

 

(xiv)                         the
Certificate Interest Rate applicable to such Distribution Date with respect to
each Class of Certificates;

 

(xv)                            with
respect to each Mortgage Pool, the Interest Remittance Amount and the Principal
Remittance Amount applicable to such Distribution Date;

 

(xvi)                         if
applicable, the amount of any shortfall (i.e., the difference between the
aggregate amounts of principal and interest which Certificateholders would have
received if there were sufficient available amounts in the Collection Account
and the amounts actually distributed);

 

(xvii)                      the
amount of any Overcollateralization Deficiency Amount after giving effect to
the distributions made on such Distribution Date;

 

(xviii)                   the
level of LIBOR and the Interest Rate of the Certificates; and

 

(xix)                           the
amount of any payments made by the Cap Provider to the Trust Fund under the
Basis Risk Cap and the Class X Cap.

 

In the case of
information furnished pursuant to subclauses (i), (ii) and (vi) above,
the amounts shall (except in the case of the report delivered to the holder of
the Class X Certificate) be expressed as a dollar amount per $1,000 of
original principal amount of Certificates.

 

The Trust
Administrator will make such report and additional loan level information (and,
at its option, any additional files containing the same information in an
alternative format) available each month to the Trustee, any NIMS Insurer,
Certificateholders and the Rating Agencies via the Trust Administrator’s
internet website.  The Trust
Administrator’s internet website shall initially be located at “[          ].”  Assistance in using the website can be
obtained by calling the Trust Administrator’s customer service desk at [          ]. 
Such parties that are unable to use the website are entitled to have a
paper copy mailed to them via first class mail by calling the customer service
desk and indicating such.  The Trust
Administrator shall have the right to change the way such statements are distributed
in order to make such distribution more convenient and/or more accessible to
the above parties and the Trust Administrator shall provide timely and adequate
notification to all above parties regarding any such changes.

 

84

 

The foregoing
information and reports shall be prepared and determined by the Trust
Administrator based solely on Mortgage Loan data provided to the Trust
Administrator by the Master Servicer (in a format agreed to by the Trust
Administrator and the Master Servicer) no later than 12:00 p.m.(noon)
Eastern Standard Time four Business Days prior to the Distribution Date.  In preparing or furnishing the foregoing
information to the Trust Administrator, the Trustee and any NIMS Insurer, the
Master Servicer shall be entitled to rely conclusively on the accuracy of the
information or data regarding the Mortgage Loans and the related REO Property
that has been provided to the Master Servicer by the Servicer or the
Subservicer, and the Master Servicer shall not be obligated to verify,
recompute, reconcile or recalculate any such information or data.  The Master Servicer shall be entitled to
conclusively rely on the Mortgage Loan data provided to the Master Servicer and
shall have no liability for any errors in such Mortgage Loan data.

 

(b)                                 Upon the reasonable advance
written request of any NIMS Insurer and any Certificateholder that is a savings
and loan, bank or insurance company, which request, if received by the Trustee,
shall be promptly forwarded to the Trust Administrator, the Trust Administrator
shall provide, or cause to be provided, (or, to the extent that such
information or documentation is not required to be provided by the Servicer or
the Subservicer under the Servicing Agreement, shall use reasonable efforts to
obtain such information and documentation from the Servicer or the Subservicer,
and provide) to any NIMS Insurer and such Certificateholder such reports and
access to information and documentation regarding the Mortgage Loans as any
NIMS Insurer or such Certificateholder may reasonably deem necessary to comply
with applicable regulations of the Office of Thrift Supervision or its
successor or other regulatory authorities with respect to an investment in the
Certificates; provided, however, that the Trust
Administrator shall be entitled to be reimbursed by such Certificateholder for
the actual expenses incurred in providing such reports and access.

 

(c)                                  Within 90 days, or such shorter
period as may be required by statute or regulation, after the end of each
calendar year, the Trust Administrator shall prepare and make available to any
NIMS Insurer and each Person who at any time during the calendar year was a
Certificateholder of record, and make available to Certificate Owners
(identified as such by the Clearing Agency) in accordance with applicable
regulations, a report summarizing the items provided to any NIMS Insurer and
the Certificateholders pursuant to Section 4.03(a) on an annual basis
as may be required to enable any NIMS Insurer and such Holders to prepare their
federal income tax returns; provided,
however, that this Section 4.03(c) shall not be applicable
where relevant reports or summaries are required elsewhere in this
Agreement.  Such information shall
include the amount of original issue discount accrued on each Class of
Certificates and information regarding the expenses of the Trust Fund.  The Trust Administrator shall be deemed to
have satisfied this requirement if it forwards such information in any other
format permitted by the Code.  The Master
Servicer shall provide the Trust Administrator with such information as is
necessary for the Trust Administrator to prepare such reports and the Trust
Administrator may rely solely upon such information.  The Trust Administrator shall provide any
NIMS Insurer with the required tax information applicable to any NIMS Insurer.

 

(d)                                 The Trust Administrator shall
furnish any other information that is required by the Code and regulations
thereunder to be made available to Certificateholders.  The Master Servicer shall provide the Trust
Administrator with such information as is necessary for the Trust

 

85

 

Administrator to
prepare such reports, and the Trust Administrator shall be entitled to rely
upon such information.

 

ARTICLE V

DISTRIBUTIONS TO HOLDERS OF CERTIFICATES

 

Section 5.01                                Distributions Generally.

 

(a)                                  Subject to Section 7.01
respecting the final distribution on the Certificates, on each Distribution
Date the Trust Administrator or the Paying Agent shall make distributions in
accordance with this Article V. 
Such distributions shall be made by wire transfer in immediately
available funds to an account specified in writing to the Trust Administrator
at least five (5) Business Days prior to the first Distribution Date to
such Certificateholder and at the expense of such Certificateholder; provided, however, that the final distribution in respect of
any Certificate shall be made only upon presentation and surrender of such
Certificate at the Corporate Trust Office of the Trust Administrator; provided, further, that the foregoing provisions shall not
apply to any Class of Certificates as long as such Certificate remains a
Book-Entry Certificate in which case all payments made shall be made through
the Clearing Agency and its Clearing Agency Participants.  Notwithstanding such final payment of
principal of any of the Certificates, each Residual Certificate will remain
outstanding until the termination of each REMIC and the payment in full of all
other amounts due with respect to the Residual Certificates and at such time
such final payment in retirement of any Residual Certificate will be made only
upon presentation and surrender of such Certificate at the Corporate Trust
Office of the Trust Administrator.  If
any payment required to be made on the Certificates is to be made on a day that
is not a Business Day, then such payment will be made on the next succeeding
Business Day.

 

(b)                                 All distributions or allocations
made with respect to Certificateholders within each Class on each
Distribution Date shall be allocated among the outstanding Certificates in such
Class equally in proportion to their respective initial Class Principal
Amounts or initial Class Notional Amounts (or Percentage Interests).

 

Section 5.02                                Distributions from the
Collection Account.

 

(a)                                  On each Distribution Date the
Trust Administrator (or the Paying Agent on behalf of the Trustee) shall
withdraw from the Collection Account the Total Distribution Amount (to the
extent such amount is on deposit in the Collection Account) and shall allocate
such amount to the interests issued in respect of REMIC 1, REMIC 2, REMIC 3 and
REMIC 4 and shall distribute such amount as specified in this Section.  All allocations and distributions made
between and with respect to Pool 1 and Pool 2 in this Section shall be
made concurrently.

 

(b)                                 On each Distribution Date, the
Trust Administrator shall distribute the Interest Remittance Amount for Pool 1
for such date in the following order of priority:

 

(i)                                     concurrently,
pro rata to the Class 1-Al
Certificates and the A-IO(1) Component, Current Interest (taking into
account the Pool 1 Net Funds Cap, if applicable) for such Classes and Component
and such Distribution Date and any

 

86

 

Carryforward Interest for such Classes and Component and such
Distribution Date; provided, however,
that any shortfall in Current Interest shall be allocated among the Class 1-A
Certificates and the A-IO(l) Component in proportion to the amount of Current Interest
that would otherwise be distributable thereon;

 

(ii)                                  concurrently,
pro rata to the Class 2-Al
and Class 2-A2 Certificates and the A-IO(2) Component, Current
Interest (taking into account distributions pursuant to subsection 5.02(c)(i) below,
as applicable, and the related Net Funds Cap, if applicable) for such Classes
and Components and such Distribution Date and any Carryforward Interest for
such Classes and Components and such Distribution Date;

 

(iii)                               to
the Class M1 Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(iv)                              to
the Class M2 Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(v)                                 to
the Class M3 Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(vi)                              to
the Class M4 Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(vii)                           to
the Class M5 Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(viii)                        to
the Class B Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(ix)                                to
the Trustee, any amounts reimbursable pursuant to Section 4.02(x) and not
previously reimbursed to the Trustee; and

 

(x)                                   for
application as part of Monthly Excess Cashflow for such Distribution Date, as
provided in subsection (f) of this Section, any Interest Remittance
Amount for Pool 1 remaining after application pursuant to clauses (i) through
(x) above.

 

(c)                                  On each Distribution Date, the
Trust Administrator shall distribute the Interest Remittance Amount for Pool 2
for such date in the following order of priority:

 

(i)                                     concurrently,
pro rata to the Class 2-Al, Class 2-A2
Certificates and the A-IO(2) Component, Current interest (taking into
account the Pool 2 Net Funds Cap, if applicable) for each such Class and
Component and such Distribution Date and any

 

87

 

Carryforward Interest for each such Class and Component and such
Distribution Date; provided, however,
that any shortfall in Current Interest shall be allocated among the Class 2-Al
and Class 2-A2 Certificates and the A-IO(2) Component in proportion
to the amount of Current Interest that would otherwise be distributable
thereon;

 

(ii)                                  concurrently,
pro rata to the Class 1-A
Certificates and the A-IO(l) Component, Current Interest (taking into account
distributions pursuant to subsection 5.02(b)(i) above, as applicable,
and the related Net Funds Cap, if applicable) for such Class and Component
and such Distribution Date and any Carryforward Interest for such Class and
Component and such Distribution Date;

 

(iii)                               to
the Class M1 Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(iv)                              to
the Class M2 Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(v)                                 to
the Class M3 Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(vi)                              to
the Class M4 Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(vii)                           to
the Class M5 Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for such
Class and such Distribution Date;

 

(viii)                        to
the Class B Certificates, Current Interest (taking into account the
Subordinate Net Funds Cap, if applicable) and any Carryforward Interest for
such Class and such Distribution Date;

 

(ix)                                to
the Trustee, any amounts reimbursable pursuant to Section 4.02(x) and not
previously reimbursed to the Trustee; and

 

(x)                                   for
application as part of Monthly Excess Cashflow for such Distribution Date, as
provided in subsection (f) of this Section, any Interest Remittance Amount
for Pool 2 remaining after application pursuant to clauses (i) through (x)
above.

 

(d)                                 On each Distribution Date, the
Trust Administrator shall distribute the Principal Distribution Amount with
respect to each Mortgage Pool for such date as follows:

 

(i)                                     On
each Distribution Date (a) prior to the Stepdown Date or (b) with
respect to which a Trigger Event is in effect, the Trustee will make the
following distributions, concurrently:

 

88

 

(A)                              For Pool 1:  Until the
aggregate Certificate Principal Amount of the Class 1-A, Class 2-Al, Class 2-A2,
Class M1, Class M2, Class M3, Class M4, Class M5 and Class B
Certificates equals the Target Amount for such Distribution Date, the Principal
Distribution Amount for Pool 1 will be distributed in the following order of
priority:

 

(1)                                  to
the Class 1-A Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(2)                                  sequentially
to the Class 2-Al and Class 2-A2 Certificates, after giving effect to
distributions pursuant to subsection 5.02(d)(i)(B)(l) below for such
Distribution Date, in that order, until their respective Class Principal
Amounts are reduced to zero;

 

(3)                                  to
the Class M1 Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(4)                                  to
the Class M2 Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(5)                                  to
the Class M3 Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(6)                                  to
the Class M4 Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(7)                                  to
the Class M5 Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(8)                                  to
the Class B Certificates, until the Class Principal Amount of such Class has
been reduced to zero; and

 

(9)                                  for
application as part of Monthly Excess Cashflow for such Distribution Date, as
provided in subsection (f) of this Section, any Principal
Distribution Amount for Pool 1 remaining after application pursuant to clauses (1) through
(8) of this Section 5.02(d)(i)(A).

 

(B)                                For Pool 2: Until the aggregate Certificate Principal Amount
of the Class 1-A, Class 2-Al, Class 2-A2, Class M1, Class M2,
Class M3, Class M4, Class M5 and Class B Certificates equals
the Target Amount for such Distribution Date, the Principal Distribution Amount
for Pool 2 will be distributed in the following order of priority:

 

(1)                                  sequentially,
to the Class 2-Al and Class 2A-2 Certificates, in that order, until
the Class Principal Amount of each such Class has been reduced to
zero;

 

89

 

(2)                                  to
the Class 1-A Certificates, after giving effect to distributions pursuant
to subsection 5.02(d)(i)(A)(l) above, until its Class Principal Amount
is reduced to zero;

 

(3)                                  to
the Class M1 Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(4)                                  to
the Class M2 Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(5)                                  to
the Class M3 Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(6)                                  to
the Class M4 Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(7)                                  to
the Class M5 Certificates, until the Class Principal Amount of such Class has
been reduced to zero;

 

(8)                                  to
the Class B Certificates, until the Class Principal Amount of such Class has
been reduced to zero; and

 

(9)                                  for
application as part of Monthly Excess Cashflow for such Distribution Date, as
provided in subsection (f) of this Section, any Principal
Distribution Amount for Pool 2 remaining after application pursuant to clauses (1) through
(8) of this Section 5.02(d)(i)(B).

 

Any Principal
Distribution Amount remaining on any Distribution Date after the Target Amount
is achieved will be applied as part of Monthly Excess Cashflow for such
Distribution Date as provided in subsection (f) of this Section.

 

(ii)                                  On
each Distribution Date (a) on or after the Stepdown Date and (b) with
respect to which a Trigger Event is not in effect, the Principal Distribution
Amount for each Mortgage Pool for such date will be distributed in the
following order of priority: 

 

(A)                              (1) so
long as the Class M1, Class M2, Class M3, Class M4, Class M5
or Class B Certificates are outstanding, to the Class 1-A
Certificates (from amounts generated by Pool 1, except as provided below) and
to the Class 2-Al and Class 2-A2 Certificates (from amounts generated
by Pool 2, except as provided below), in each case, in accordance with the related
Senior Priorities set forth above, an amount equal to the lesser of (x) the
Principal Distribution Amount for the related Mortgage Pool for such
Distribution Date and (y) the Related Senior Principal Distribution Amount for
such Mortgage Pool for such Distribution Date, in each case, until the Class Principal
Amount of each such Class has been reduced to zero; provided, however, to the extent that the
Principal

 

90

 

Distribution
Amount for a Mortgage Pool exceeds the Related Senior Principal Distribution
Amount for such Mortgage Pool, such excess shall be applied to the Senior
Certificates of the other Mortgage Pool in accordance with its related Senior
Priorities, in proportion to their respective Class Principal Amounts
after giving effect to distributions on such date, but in an amount not to
exceed the Senior Principal Distribution Amount for such Distribution Date (as
reduced by any distributions pursuant to subclauses (x) or (y) of this clause (1) on
such Distribution Date); or (2) if none of the Class M1, Class M2,
Class M3, Class M4, Class M5 or Class B Certificates are
outstanding, to the Class 1-A, Class 2-Al and Class 2-A2
Certificates (in accordance with their related Senior Priorities), the Principal
Distribution Amount for the related Mortgage Pool for such Distribution Date;

 

(B)                                to
the Class M1 Certificates, an amount equal to the lesser of (x) the excess
of (a) the aggregate Principal Distribution Amounts for each of Pool 1 and
Pool 2 for such Distribution Date over (b) the amount distributed to the Class 1-A,
Class 2-Al and Class 2-A2 Certificates on such date pursuant to
clause (A) above, and (y) the M1 Principal Distribution Amount for such
date, until the Class Principal Amount of such Class has been reduced
to zero;

 

(C)                                to
the Class M2 Certificates, an amount equal to the lesser of (x) the excess
of (a) the aggregate Principal Distribution Amounts for each of Pool 1 and
Pool 2 for such Distribution Date over (b) the amount distributed to the Class 1-A,
Class 2-Al, Class 2-A2 and Class M1 Certificates on such date
pursuant to clauses (A) and (B) above, and (y) the M2 Principal
Distribution Amount for such date, until the Class Principal Amount of
such Class has been reduced to zero;

 

(D)                               to
the Class M3 Certificates, an amount equal to the lesser of (x) the excess
of (a) the aggregate Principal Distribution Amounts for each of Pool 1 and
Pool 2 for such Distribution Date over (b) the amount distributed to the Class 1-A,
Class 2-Al, Class 2-A2, Class M1 and Class M2 Certificates
on such date pursuant to clauses (A), (B) and (C) above, and (y) the
M3 Principal Distribution Amount for such date, until the Class Principal
Amount of such Class has been reduced to zero;

 

(E)                                 to
the Class M4 Certificates, an amount equal to the lesser of (x) the excess
of (a) the aggregate Principal Distribution Amounts for each of Pool 1 and
Pool 2 for such Distribution Date over (b) the amount distributed to the Class 1-A,
Class 2-Al, Class 2-A2, Class M1, Class M2 and Class M3
Certificates on such date pursuant to clauses (A) through (D) above,
respectively, and (y) the M4 Principal Distribution Amount for such date, until
the Class Principal Amount of such Class has been reduced to zero;

 

(F)                                 to
the Class M5 Certificates, an amount equal to the lesser of (x) the excess
of (a) the aggregate Principal Distribution Amounts for each of Pool 1 and
Pool 2 for such Distribution Date over (b) the amount distributed to the Class 1-A,
Class 2-Al, Class 2-A2, Class M1, Class M2, Class M3
and Class M4

 

91

 

Certificates
on such date pursuant to clauses (A) through (E) above, respectively,
and (y) the M5 Principal Distribution Amount for such date, until the Class Principal
Amount of such Class has been reduced to zero;

 

(G)                                to
the Class B Certificates, an amount equal to the lesser of (x) the excess
of (a) the aggregate Principal Distribution Amounts for each of Pool 1 and
Pool 2 for such Distribution Date over (b) the amount distributed to the Class 1-A,
Class 2-Al, Class 2-A2, Class M1, Class M2, Class M3, Class M4
and Class M5 Certificates on such date pursuant to clauses (A) through
(F) above, respectively, and (y) the B Principal Distribution Amount for
such date, until the Class Principal Amount of such Class has been
reduced to zero; and

 

(H)                               for
application as part of Monthly Excess Cashflow for such Distribution Date, as
provided in subsection (f) of this Section, any Principal
Distribution Amount remaining after application pursuant to clauses (A) through
(G) above.

 

Notwithstanding
the foregoing, on any Distribution Date on which the Class Principal
Amount of each Class of Certificates having a higher priority of
distribution has been reduced to zero, any remaining Principal Distribution
Amount will be distributed to the remaining Certificates in the order of
priority set forth above until the Class Principal Amount of each such Class has
been reduced to zero.

 

(e)                                  On each Distribution Date, the
Trust Administrator shall distribute the Monthly Excess Cashflow for such date
in the following order of priority:

 

(i)                                     for
each Distribution Date occurring (a) before the Stepdown Date or (b) on
or after the Stepdown Date but for which a Trigger Event is in effect, then
until the aggregate Certificate Principal Amount of the Certificates equals the
Aggregate Loan Balance for such Distribution Date minus the Targeted
Overcollateralization Amount for such Distribution Date, in the following order
of priority:

 

(A)                              concurrently,
in proportion to the aggregate Class Principal Amount of the Senior
Certificates related to each Mortgage Pool, after giving effect to previous
principal distributions on such Distribution Date pursuant to subsections
5.02(d)(i)(A) and 5.02(d)(i)(B), to the Class 1-A, Class 2-A1
and Class 2-A2 Certificates, in accordance with their related Senior
Priorities;

 

(B)                                to
the Class M1 Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero;

 

(C)                                to
the Class M2 Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero;

 

(D)                               to
the Class M3 Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero;

 

92

 

(E)                                 to
the Class M4 Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero;

 

(F)                                 to
the Class M5 Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero; and

 

(G)                                to
the Class B Certificates, in reduction of their Class Principal
Amount, until the Class Principal Amount of such Class has been
reduced to zero;

 

(ii)                                  for
each Distribution Date occurring on or after the Stepdown Date and for which a
Trigger Event is not in effect, in the following order of priority:

 

(A)                              concurrently,
in proportion to the aggregate Class Principal Amount of the Class A
Certificates related to each Mortgage Pool, after giving effect to previous
principal distributions on such Distribution Date pursuant to subsections
5.02(d)(i)(A) and 5.02(d)(i)(B), to the Class 1-A, Class 2-A1 and
Class 2-A2 Certificates, in accordance with their related Senior
Priorities, in reduction of their respective Class Principal Amounts,
until the aggregate Class Principal Amount of the Senior Certificates,
after giving effect to distributions on such Distribution Date, equals the
Senior Target Amount;

 

(B)                                to
the Class M1 Certificates, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount for such Class, and the
Class 1-A, Class 2-Al and Class 2-A2 Certificates, after giving
effect to distributions on such Distribution Date, equals the M1 Target Amount;

 

(C)                                to
the Class M2 Certificates, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount for such Class, the Class M1,
Class 1-A, Class 2-A1 and Class 2-A2 Certificates, after giving
effect to distributions on such Distribution Date, equals the M2 Target Amount;

 

(D)                               to
the Class M3 Certificates, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount for such Class, the Class M1,
Class M2, Class 1-A, Class 2-A1 and Class 2-A2
Certificates, after giving effect to distributions on such Distribution Date,
equals the M3 Target Amount;

 

(E)                                 to
the Class M4 Certificates, in reduction of their Class Principal Amount,
until the aggregate Class Principal Amount for such Class, the Class M1,
Class M2, Class M3, Class 1-A, Class 2-Al and Class 2-A2
Certificates, after giving effect to distributions on such Distribution Date,
equals the M4 Target Amount;

 

(F)                                 to
the Class M5 Certificates, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount for such Class, the Class M1,
Class M2, Class M3, Class M4, Class 1-A, Class 2-Al
and Class 2-A2 Certificates, after giving effect to distributions on such
Distribution Date, equals the M5 Target Amount; and

 

93

 

(G)                                to
the Class B Certificates, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount for such Class, the Class M5.  Class M4, Class M3, Class M2, Class M1,
Class 1-A, Class 2-Al and Class 2-A2 Certificates, after giving
effect to distributions on such Distribution Date, equals the B Target Amount;

 

(iii)                               to
the Basis Risk Reserve Fund, an amount equal to the Basis Risk Payment for such
Distribution Date, and then from the Basis Risk Reserve Fund in the following
order of priority:

 

(A)                              concurrently,
in proportion to their respective Unpaid Basis Risk Shortfalls, after giving
effect to previous distributions on such Distribution Date, to the Class 1-A,
Class 2-A1 and Class 2-A2 Certificates, any applicable Basis Risk
Shortfall and Unpaid Basis Risk Shortfall for such Class and such
Distribution Date;

 

(B)                                to
the Class M1 Certificates, any applicable Basis Risk Shortfall and Unpaid
Basis Risk Shortfall for such Class and such Distribution Date;

 

(C)                                to
the Class M2 Certificates, any applicable Basis Risk Shortfall and Unpaid
Basis Risk Shortfall for such Class and such Distribution Date;

 

(D)                               to
the Class M3 Certificates, any applicable Basis Risk Shortfall and Unpaid
Basis Risk Shortfall for such Class and such Distribution Date;

 

(E)                                 to
the Class M4 Certificates, any applicable Basis Risk Shortfall and Unpaid
Basis Risk Shortfall for such Class and such Distribution Date;

 

(F)                                 to
the Class M5 Certificates, any applicable Basis Risk Shortfall and Unpaid
Basis Risk Shortfall for such Class and such Distribution Date;

 

(G)                                to
the Class B Certificates, any applicable Basis Risk Shortfall and Unpaid
Basis Risk Shortfall for such Class and such Distribution Date; and

 

(H)                               to
the Class X Certificateholder, the sum of (a) any amounts remaining
in the Basis Risk Reserve Fund, after taking into account distributions
pursuant to clauses (A) through (G) above, in excess of the Required
Reserve Fund Amount for such Distribution Date, and (b) any amounts paid
by the Cap Provider to the Trust Fund with respect to the Class X Cap;

 

(iv)                              to
the Class M1 Certificates, any Deferred Amount for such Class and
such Distribution Date;

 

(v)                                 to
the Class M2 Certificates, any Deferred Amount for such Class and
such Distribution Date;

 

(vi)                              to
the Class M3 Certificates, any Deferred Amount for such Class and
such Distribution Date;

 

94

 

(vii)                           to
the Class M4 Certificates, any Deferred Amount for such Class and
such Distribution Date;

 

(viii)                        to
the Class M5 Certificates, any Deferred Amount for such Class and
such Distribution Date;

 

(ix)                                to
the Class B Certificates, any Deferred Amount for such Class and such
Distribution Date;

 

(x)                                   to
the Class X Certificate, the Class X Distributable Amount for such
Distribution Date; and

 

(xi)                                to
the Class R Certificate, any amount remaining on such date after
application pursuant to clauses (i) through (xi) above.

 

(f)                                    On each Distribution Date, an
amount equal to the aggregate of all Prepayment Premiums collected during the
preceding Prepayment Period shall be distributed to the Class X
Certificate.

 

Section 5.03                                Allocation of Losses.

 

On each Distribution
Date, the Class Principal Amounts of the Class M1, Class M2, Class M3,
Class M4, Class M5 and Class B Certificates will be reduced by
the amount of any Applied Loss Amount for such date, in the following order of
priority:

 

(i)                                     to
the Class B Certificates, until the Class Principal Amount thereof
has been reduced to zero;

 

(ii)                                  to
the Class M5 Certificates, until the Class Principal Amount thereof
has been reduced to zero;

 

(iii)                               to
the Class M4 Certificates, until the Class Principal Amount thereof has
been reduced to zero;

 

(iv)                              to
the Class M3 Certificates, until the Class Principal Amount thereof
has been reduced to zero;

 

(v)                                 to
the Class M2 Certificates, until the Class Principal Amount thereof
has been reduced to zero; and

 

(vi)                              to
the Class M1 Certificates, until the Class Principal Amount thereof
has been reduced to zero.

 

Section 5.04                                Advances by Master Servicer,
Servicer, Subservicer and Trust Administrator.

 

(a)                                  Subject to Section 9.07,
Advances shall be made in respect of each Deposit Date as provided herein.  If, on any Determination Date, the Servicer
and the Subservicer determine

 

95

 

that any Scheduled Payments due during the
related Collection Period (other than Balloon Payments) have not been received,
the Servicer and the Subservicer shall advance such amount to the extent
provided in the Servicing Agreement.  If
the Servicer and the Subservicer fail to remit Advances required to be made
under the Servicing Agreement, the Master Servicer shall (in its capacity as
successor Servicer) make, or shall cause the successor Servicer to make, such
Advance on the Deposit Date immediately following such Determination Date.  If the Master Servicer determines that an
Advance is required, it shall on the Deposit Date immediately following such
Determination Date either (i) remit to the Trust Administrator from its
own funds (or funds advanced by the applicable Servicer) for deposit in the
Collection Account immediately available funds in an amount equal to such
Advance, (ii) cause to be made an appropriate entry in the records of the
Collection Account that funds in such account being held for future
distribution or withdrawal have been, as permitted by this Section 5.04,
used by the Master Servicer to make such Advance, and remit such immediately
available funds to the Trust Administrator for deposit in the Collection
Account or (iii) make Advances in the form of any combination of clauses (i) and
(ii) aggregating the amount of such Advance.  Any funds being held in the Collection
Account for future distribution to Certificateholders and so used shall be
replaced by the Master Servicer from its own funds by remittance to the Trust
Administrator for deposit in the Collection Account on or before any future
Deposit Date to the extent that funds in the Collection Account on such Deposit
Date shall be less than payments to Certificateholders required to be made on
the related Distribution Date.  The
Master Servicer, the Servicer and the Subservicer shall be entitled to be
reimbursed from the Collection Account for all Advances made by it as provided
in Section 4.02.  Notwithstanding
anything to the contrary herein, in the event the Master Servicer determines in
its reasonable judgment that an Advance is non-recoverable, the Master Servicer
shall be under no obligation to make such Advance.

 

(b)                                 In the event that each of the
Master Servicer, the Servicer or the Subservicer fails for any reason to make
an Advance required to be made pursuant to this Section 5.04 on or before
the Deposit Date, the Trustee, as successor Master Servicer pursuant to Section 6.14,
shall, on or before the related Distribution Date, deposit in the Collection
Account an amount equal to the excess of (a) Advances required to be made
by the Master Servicer, the Servicer and the Subservicer that would have been
deposited in such Collection Account over (b) the amount of any Advance
made by the Master Servicer, the Servicer and the Subservicer with respect to
such Distribution Date; provided, however,
that the Trustee shall be required to make such Advance only if it is not
prohibited by law from doing so and it has determined that such Advance would
be recoverable from amounts to be received with respect to such Mortgage Loan,
including late payments, Liquidation Proceeds, Insurance Proceeds, or
otherwise.  The Trustee shall be entitled
to be reimbursed from the Collection Account for Advances made by it pursuant
to this Section 5.04 as if it were the Master Servicer.

 

Section 5.05                                Compensating Interest Payments.

 

The amount of
the aggregate Master Servicing Fees payable to the Master Servicer in respect
of any Distribution Date shall be reduced (but not below zero) by the amount of
any Compensating Interest Payment for such Distribution Date, but only to the
extent that Prepayment Interest Shortfalls relating to such Distribution Date
are required to be paid but not actually paid by the Servicer and the
Subservicer on the applicable Servicer Remittance Date.

 

96

 

Such amount shall not be
treated as an Advance and shall not be reimbursable to the Master Servicer.

 

Section 5.06                                Basis Risk Reserve Fund.

 

(a)                                  On the Closing Date, the Trust
Administrator shall establish and maintain in its name, in trust for the
benefit of the holders of the Certificates, a Basis Risk Reserve Fund, into
which the Seller shall deposit $1,000. 
In addition, the Trust Administrator shall hold the Basis Risk Cap as an
asset in the Basis Risk Reserve Fund. 
The Basis Risk Reserve Fund shall be an Eligible Account, and funds on
deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including, without limitation, other moneys
of the Trust Administrator held pursuant to this Agreement.

 

(b)                                 The Trust Administrator shall
account for the Cap Agreement as though it comprised two component cap
agreements – the Basis Risk Cap and the Class X Cap.  The Class X Cap shall not be an asset of
the Trust Fund or the Basis Risk Reserve Fund. 
On each Distribution Date the Trust Administrator shall distribute to
the Class X Certificateholder pursuant to Section 5.02(f)(iii)(H) of
this Agreement any payments made by the Cap Provider to the Trust Fund for such
Distribution Date with respect to the Class X Cap, and the Trust
Administrator shall not treat such payments as amounts on deposit in the Basis
Risk Reserve Fund for purposes of determining the Required Reserve Fund Amount
for any Distribution Date.  On each Distribution
Date the Trust Administrator shall distribute in the order of priority and to
the extent specified in Section 5.02(f)(iii) of this Agreement the
sum of (without duplication) (a) any payments made by the Cap Provider to
the Trust Fund for such Distribution Date with respect to the Basis Risk Cap, (b) any
amounts then on deposit in the Basis Risk Reserve Fund, including any earnings
thereon, in respect of the Basis Risk Cap and (c) the Basis Risk Payment,
if any, for such Distribution Date.  On
any Distribution Date, any amounts that the Trust Administrator is not required
to distribute from the Basis Risk Reserve Fund pursuant to Section 5.02(f)(iii) of
this Agreement shall remain on deposit in the Basis Risk Reserve Fund.

 

(c)                                  Funds in the Basis Risk Reserve
Fund shall be invested in Eligible Investments. 
The Class X Certificate shall evidence ownership of the Basis Risk
Reserve Fund for federal income tax purposes and the Seller on behalf of the
Holder thereof shall direct the Trust Administrator, in writing, as to investment
of amounts on deposit therein.  The
Seller shall be liable for any losses incurred on such investments.  In the absence of written instructions from
the Seller as to investment of funds on deposit in the Basis Risk Reserve Fund,
such funds shall be invested in the Wells Fargo Prime Money Market Fund
Investment Account.

 

ARTICLE VI

CONCERNING THE TRUSTEE AND THE TRUST ADMINISTRATOR; EVENTS OF DEFAULT

 

Section 6.01                                Duties of Trustee and Trust
Administrator.

 

(a)                                  The Trustee, except during the
continuance of an Event of Default, and the Trust Administrator, undertake to
perform such duties and only such duties as are specifically set forth

 

97

 

in this Agreement.  Any permissive right of the Trustee or the
Trust Administrator provided for in this Agreement shall not be construed as a
duty of the Trustee or the Trust Administrator. 
If an Event of Default has occurred and has not otherwise been cured or
waived, the Trustee or the Trust Administrator shall exercise such of the
rights and powers vested in it by this Agreement and use the same degree of
care and skill in their exercise as a prudent Person would exercise or use
under the circumstances in the conduct of such Person’s own affairs, unless the
Trust Administrator is acting as Master Servicer, in which case it shall use
the same degree of care and skill as the Master Servicer hereunder.

 

(b)                                 Each of the Trustee and the
Trust Administrator, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee or the Trust Administrator which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they are on their face in the form required by this
Agreement; provided, however, that neither the
Trustee nor the Trust Administrator shall be responsible for the accuracy or
content of any such resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by the Master Servicer, the
Servicer or the Subservicer to the Trustee or the Trust Administrator pursuant
to this Agreement, and shall not be required to recalculate or verify any
numerical information furnished to the Trustee or the Trust Administrator
pursuant to this Agreement.  Subject to
the immediately preceding sentence, if any such resolution, certificate,
statement, opinion, report, document, order or other instrument is found not to
conform on its face to the form required by this Agreement in a material manner
the Trustee shall notify the Person providing such resolutions, certificates,
statements, opinions, reports or other documents of the non-conformity, and if
the instrument is not corrected to the Trustee’s satisfaction, the Trustee will
provide notice thereof to the Certificateholders and any NIMS Insurer and will,
at the expense of the Trust Fund, which expense shall be reasonable given the
scope and nature of the required action, take such further action as directed
by the Certificateholders and any NIMS Insurer.

 

(c)                                  Neither the Trustee nor the
Trust Administrator shall have any liability arising out of or in connection
with this Agreement, except for its negligence or willful misconduct.  Notwithstanding anything in this Agreement to
the contrary, neither the Trustee nor the Trust Administrator shall be liable
for special, indirect or consequential losses or damages of any kind whatsoever
(including, but not limited to, lost profits). 
No provision of this Agreement shall be construed to relieve the Trustee
or the Trust Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided,
however, that:

 

(i)                                     Neither
the Trustee nor the Trust Administrator shall be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Holders of Certificates as provided in Section 6.18
hereof;

 

(ii)                                  For
all purposes under this Agreement, the Trustee shall not be deemed to have
notice of any Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office, and
such notice references the Holders of the Certificates and this Agreement;

 

98

 

(iii)                               For
all purposes under this Agreement, the Trust Administrator shall not be deemed
to have notice of any Event of Default (other than resulting from a failure by
the Master Servicer to furnish information to the Trust Administrator when
required to do so) unless a Responsible Officer of the Trust Administrator has
actual knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trust Administrator at the address provided
in Section 11.07, and such notice references the Holders of the
Certificates and this Agreement;

 

(iv)                              No
provision of this Agreement shall require the Trustee or the Trust
Administrator to expend or risk its own funds or otherwise incur any 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 for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it; and none of the provisions
contained in this Agreement shall in any event require the Trustee or the Trust
Administrator to perform, or be responsible for the manner of performance of,
any of the obligations of the Master Servicer under this Agreement;

 

(v)                                 Neither
the Trustee nor the Trust Administrator shall be responsible for any act or
omission of the Master Servicer, the Depositor, the Seller or the Custodian and
neither the Trust Administrator nor the Trustee shall be responsible for any
act or omission of the other.

 

(d)                                 The Trustee shall have no duty
hereunder with respect to any complaint, claim, demand, notice or other
document it may receive or which may be alleged to have been delivered to or
served upon it by the parties as a consequence of the assignment of any
Mortgage Loan hereunder; provided, however,
that the Trustee shall promptly remit to the Master Servicer upon receipt any such
complaint, claim, demand, notice or other document (i) which is delivered
to the Corporate Trust Office of the Trustee and makes reference to this series
of Certificate or this Agreement, (ii) of which a Responsible Officer has
actual knowledge, and (iii) which contains information sufficient to
permit the Trustee to make a determination that the real property to which such
document relates is a Mortgaged Property.

 

(e)                                  Neither the Trustee nor the
Trust Administrator shall be personally liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance with
the direction of any NIMS Insurer or the Certificateholders of any Class holding
Certificates which evidence, as to such Class, Percentage Interests aggregating
not less than 25% as to the time, method and place of conducting any proceeding
for any remedy available to the Trustee or the Trust Administrator or
exercising any trust or power conferred upon the Trustee or the Trust
Administrator, as applicable, under this Agreement.

 

(f)                                    Neither the Trustee nor the
Trust Administrator shall be required to perform services under this Agreement,
or to expend or risk its own funds or otherwise incur financial liability for
the performance of any of its duties hereunder or the exercise of any of its
rights or powers if there is reasonable ground for believing that the timely
payment of its fees and expenses or the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee or the Trust Administrator, as applicable, to perform, or be
responsible

 

99

 

for the manner of performance of, any of the
obligations of the Master Servicer, the Servicer or the Subservicer under this
Agreement or the Servicing Agreement except during such time, if any, as the
Trust Administrator shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Master Servicer in accordance with the
terms of this Agreement.

 

(g)                                 The Trustee shall not be held
liable by reason of any insufficiency in the Collection Account resulting from
any investment loss on any Eligible Investment included therein (except to the
extent that the Trustee is the obligor and has defaulted thereon).

 

(h)                                 The Trustee shall not and,
except as otherwise provided herein, the Trust Administrator shall not have any
duty (A) to see to any recording, filing, or depositing of this Agreement
or any agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording or filing or depositing or to any rerecording, refiling or redepositing
of any thereof, (B) to see to any insurance, and (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or
any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund other than from funds available in the
Collection Account, the Trust Administration Account or the Collection Account,
as applicable.  Except as otherwise
provided herein, neither the Trustee nor the Trust Administrator shall have any
duty to confirm or verify the contents of any reports or certificates of the
Master Servicer, the Servicer or the Subservicer delivered to the Trustee or
the Trust Administrator pursuant to this Agreement believed by the Trustee or
the Trust Administrator, as applicable, to be genuine and to have been signed
or presented by the proper party or parties.

 

(i)                                     Neither the Trust Administrator
nor the Trustee shall be liable in its individual capacity for an error of
judgment made in good faith by a Responsible Officer or other officers of the
Trustee or the Trust Administrator, as applicable, unless it shall be proved
that the Trustee or the Trust Administrator, as applicable, was negligent in
ascertaining the pertinent facts.

 

(j)                                     Notwithstanding anything in this
Agreement to the contrary, neither the Trust Administrator nor the Trustee
shall be liable for special, indirect or consequential losses or damages of any
kind whatsoever (including, but not limited to, lost profits), even if the
Trustee or the Trust Administrator, as applicable, has been advised of the
likelihood of such loss or damage and regardless of the form of action.

 

(k)                                  Neither the Trust Administrator
nor the Trustee shall be responsible for the acts or omissions of the other, it
being understood that this Agreement shall not be construed to render them
agents of one another.

 

Section 6.02                                Certain Matters Affecting the
Trustee and the Trust Administrator.

 

Except as
otherwise provided in Section 6.01:

 

(i)                                     Each
of the Trustee and the Trust Administrator may request, and may rely and shall
be protected in acting or refraining from acting upon any resolution, Officer’s
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or

 

100

 

document believed by it to be genuine and to have been signed or
presented by the proper party or parties;

 

(ii)                                  Each
of the Trustee and the Trust Administrator may consult with counsel and any
advice of its counsel or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel;

 

(iii)                               Neither
the Trustee nor the Trust Administrator shall be personally liable for any
action taken, suffered or omitted by it in good faith and reasonably believed
by it to be authorized or within the discretion or rights or powers conferred
upon it by this Agreement;

 

(iv)                              Unless
an Event of Default shall have occurred and be continuing, neither the Trustee
nor the Trust Administrator shall be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document (provided the same appears regular on its face), unless requested
in writing to do so by any NIMS Insurer or the Holders of at least a majority in
Class Principal Amount (or Percentage Interest) of each Class of
Certificates; provided, however, that, if the
payment within a reasonable time to the Trustee or the Trust Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee or the
Trust Administrator, as applicable, not reasonably assured to the Trustee or
the Trust Administrator by the security afforded to it by the terms of this
Agreement, the Trustee or the Trust Administrator, as applicable, may require
reasonable indemnity against such expense or liability or payment of such
estimated expenses from any NIMS Insurer or the Certificateholders, as
applicable, as a condition to proceeding. 
The reasonable expense thereof shall be paid by the party requesting
such investigation and if not reimbursed by the requesting party shall be
reimbursed to the Trustee by the Trust Fund;

 

(v)                                 Each
of the Trustee and the Trust Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians or attorneys, which agents, custodians or attorneys
shall have any and all of the rights, powers, duties and obligations of the
Trustee and the Trust Administrator conferred on them by such appointment,
provided that each of the Trustee and the Trust Administrator shall continue to
be responsible for its duties and obligations hereunder to the extent provided
herein, and provided further that neither the Trustee nor the Trust
Administrator shall be responsible for any misconduct or negligence on the part
of any such agent or attorney appointed with due care by the Trustee or the
Trust Administrator, as applicable;

 

(vi)                              Neither
the Trustee nor the Trust Administrator shall be under any obligation to
exercise any of the trusts or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation hereto, in
each case at the request, order or direction of any of the Certificateholders
or any NIMS Insurer pursuant to the provisions of this Agreement, unless such
Certificateholders or any NIMS

 

101

 

Insurer shall have offered to the Trustee or the Trust Administrator,
as applicable, reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;

 

(vii)                           The
right of the Trustee and the Trust Administrator to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and neither
the Trustee nor the Trust Administrator shall be answerable for other than its
negligence or willful misconduct in the performance of such act; and

 

(viii)                        Neither
the Trustee nor the Trust Administrator shall be required to give any bond or
surety in respect of the execution of the Trust Fund created hereby or the
powers granted hereunder.

 

Section 6.03                                Trustee and Trust Administrator
Not Liable for Certificates.

 

The Trustee
and the Trust Administrator make no representations as to the validity or
sufficiency of this Agreement or of the Certificates (other than the
certificate of authentication on the Certificates) or of any Mortgage Loan, or
related document save that the Trustee and the Trust Administrator represent
that, assuming due execution and delivery by the other parties hereto, this
Agreement has been duly authorized, executed and delivered by it and
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms except that such enforceability may be subject to (A) applicable
bankruptcy and insolvency laws and other similar laws affecting the enforcement
of the rights of creditors generally, and (B) general principles of equity
regardless of whether such enforcement is considered in a proceeding in equity
or at law.  The Trustee and the Trust
Administrator shall not be accountable for the use or application by the
Depositor of funds paid to the Depositor in consideration of the assignment of
the Mortgage Loans to the Trust Fund by the Depositor or for the use or
application of any funds deposited into the Collection Account, the Collection
Account, the Trust Administration Account any Escrow Account or any other fund
or account maintained with respect to the Certificates.  The Trustee and the Trust Administrator shall
not be responsible for the legality or validity of this Agreement or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued or intended to be issued hereunder.  The Trustee shall not, and except as
otherwise provided herein, the Trust Administrator 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 it hereunder or to record this Agreement.

 

Section 6.04                                Trustee and the Trust
Administrator May Own Certificates.

 

The Trustee
and the Trust Administrator and any Affiliate or agent of either of them in its
individual or any other capacity may become the owner or pledgee of
Certificates and may transact banking and trust business with the other parties
hereto and their Affiliates with the same rights it would have if it were not
Trustee, Trust Administrator or such agent.

 

Section 6.05                                Eligibility Requirements for
Trustee and Trust Administrator.

 

The Trustee
and the Trust Administrator hereunder shall at all times be (i) an
institution insured by the FDIC, (ii) a corporation or national banking
association, organized and doing business under the laws of any State or the
United States of America, authorized under such laws

 

102

 

to exercise corporate trust
powers, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by federal or state authority and (iii) not
an Affiliate of the Master Servicer or the Servicer (except in the case of the
Trust Administrator).  If such
corporation or national banking association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then, for the purposes of this Section, the
combined capital and surplus of such corporation or national banking association
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 Trustee or the Trust Administrator shall cease
to be eligible in accordance with provisions of this Section, the Trustee or
the Trust Administrator, as applicable, shall resign immediately in the manner
and with the effect specified in Section 6.06.

 

Section 6.06                                Resignation and Removal of
Trustee and the Trust Administrator.

 

(a)                                  Each of the Trustee and the Trust
Administrator may at any time resign and be discharged from the trust hereby
created by giving written notice thereof to the Trustee or the Trust
Administrator, as applicable, the Depositor, any NIMS Insurer and the Master
Servicer.  Upon receiving such notice of
resignation, the Depositor will promptly appoint a successor trustee or a
successor Trust Administrator, as applicable, acceptable to any NIMS Insurer by
written instrument, one copy of which instrument shall be delivered to the
resigning Trustee and the resigning Trust Administrator, as applicable, one
copy to the successor trustee or successor Trust Administrator, as applicable,
and one copy to each of the Master Servicer and any NIMS Insurer.  If no successor trustee or successor Trust
Administrator shall have been so appointed and shall have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee or resigning Trust Administrator, as applicable, may petition any court
of competent jurisdiction for the appointment of a successor trustee or
successor Trust Administrator, as applicable.

 

(b)                                 If at any time (i) the
Trustee shall cease to be eligible in accordance with the provisions of Section 6.05
and shall fail to resign after written request therefor by the Depositor or any
NIMS Insurer, (ii) the Trustee or the Trust Administrator shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or the Trust Administrator of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
the Trust Administrator or of either of their property or affairs for the
purpose of rehabilitation, conservation or liquidation, (iii) the Trust
Administrator shall fail to observe or perform in any material respect any of
the covenants or agreements of the Trust Administrator contained in this
Agreement, including any failure to remit payment to the Trustee on the Deposit
Date which failure continues unremedied for a period of one Business Day
(unless such failure to remit payment is directly caused by a failure by the
Master Servicer to remit payments to the Trust Administrator and the Trustee
has not terminated the Master Servicer as a result of such failure to remit, in
which case the Trust Administrator shall remit payment as promptly as possible,
but in no case later than one Business Day after recovering payment from the
Master Servicer), (iv) a tax is imposed or threatened with respect to the
Trust Fund by any state in which the Trustee or the Trust Fund held by the
Trustee is located, (v) the continued use of the Trustee or Trust
Administrator would result in a downgrading of the rating by any Rating Agency
of any Class of Certificates with a rating or (vi) the Depositor
desires to replace the Trust Administrator with a successor Trust
Administrator, which successor is willing to sign the Form 10-K

 

103

 

Certification, then the Depositor, the Master
Servicer, the Trustee (with regard to clause (iii) only) or any NIMS
Insurer shall remove the Trustee or the Trust Administrator, as applicable, and
the Depositor shall appoint a successor trustee or successor Trust
Administrator, as applicable, acceptable to any NIMS Insurer and the Master
Servicer by written instrument, one copy of which instrument shall be delivered
to the Trustee or Trust Administrator so removed, one copy each to the
successor trustee or successor Trust Administrator, as applicable, and one copy
to the Master Servicer and any NIMS Insurer.

 

(c)                                  The Holders of more than 50% of
the Class Principal Amount (or Percentage Interest) of each Class of
Certificates (or any NIMS Insurer in the event of failure of the Trustee or
Trust Administrator, as applicable, to perform its obligations hereunder) may
at any time upon 30 days’ written notice to the Trustee or the Trust
Administrator, as applicable, and to the Depositor remove the Trustee or the
Trust Administrator, as applicable, by such written instrument, signed by such
Holders or their attorney-in-fact duly authorized (or by any NIMS Insurer), one
copy of which instrument shall be delivered to the Depositor, one copy to the
Trustee, one copy each to the Master Servicer and any NIMS Insurer; the
Depositor shall thereupon appoint a successor trustee or successor Trust
Administrator, as applicable, in accordance with this Section mutually
acceptable to the Depositor, the Master Servicer and any NIMS Insurer.

 

(d)                                 Any resignation or removal of
the Trustee or the Trust Administrator, as applicable, and appointment of a
successor trustee or successor Trust Administrator pursuant to any of the
provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee or the successor Trust Administrator, as
applicable, as provided in Section 6.07.

 

Section 6.07                                Successor Trustee and Successor
Trust Administrator.

 

(a)                                  Any successor trustee or
successor Trust Administrator appointed as provided in Section 6.06 shall
execute, acknowledge and deliver to the Depositor, the Master Servicer, any
NIMS Insurer and to its predecessor trustee or predecessor Trust Administrator,
as applicable, an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee or predecessor
Trust Administrator, as applicable, shall become effective and such successor
trustee or successor Trust Administrator, as applicable, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as trustee or Trust Administrator, as applicable, herein.  A predecessor trustee shall deliver to the
Trustee or any successor trustee (or assign to the Trustee its interest under
each Custodial Agreement, to the extent permitted thereunder), all Mortgage
Files and documents and statements related to each Mortgage File held by it
hereunder, and shall duly assign, transfer, deliver and pay over to the
successor trustee the entire Trust Fund, together with all necessary
instruments of transfer and assignment or other documents properly executed
necessary to effect such transfer and such of the records or copies thereof
maintained by the predecessor trustee in the administration hereof as may be
requested by the successor trustee and shall thereupon be discharged from all
duties and responsibilities under this Agreement.  In addition, the Master Servicer and the
predecessor trustee or predecessor Trust Administrator, as applicable, shall
execute and deliver such other instruments and do such other things as may
reasonably be required to more fully and certainly

 

104

 

vest and confirm in the successor trustee or
successor Trust Administrator, as applicable, all such rights, powers, duties
and obligations.

 

(b)                                 No successor trustee or
successor Trust Administrator shall accept appointment as provided in this Section unless
at the time of such appointment such successor trustee or successor Trust
Administrator shall be eligible under the provisions of Section 6.05.

 

(c)                                  Upon acceptance of appointment
by a successor trustee or successor Trust Administrator, as applicable, as
provided in this Section, the predecessor trustee or predecessor Trust
Administrator, as applicable, shall mail notice of the succession of such
trustee or Trust Administrator, as applicable, hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register and to any
Rating Agency.  The expenses of such
mailing shall be borne by the predecessor trustee or predecessor Trust
Administrator, as applicable.

 

Section 6.08                                Merger or Consolidation of
Trustee or the Trust Administrator.

 

Any Person
into which the Trustee or Trust Administrator may be merged or with which it
may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee or Trust Administrator shall be a party, or
any Persons succeeding to the business of the Trustee or Trust Administrator,
shall be the successor to the Trustee or Trust Administrator hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding, provided
that, in the case of the Trustee, such Person shall be eligible under the
provisions of Section 6.05.

 

Section 6.09                                Appointment of Co-Trustee,
Separate Trustee or Custodian.

 

(a)                                  Notwithstanding any other
provisions hereof, at any time, the Trustee, the Depositor or the Certificateholders
evidencing more than 50% of the Class Principal Amount (or Percentage
Interest) of every Class of Certificates shall have the power from time to
time to appoint one or more Persons, approved by the Trustee and any NIMS
Insurer, to act either as co-trustees jointly with the Trustee, or as separate
trustees, or as custodians, for the purpose of holding title to, foreclosing or
otherwise taking action with respect to any Mortgage Loan outside the state
where the Trustee has its principal place of business where such separate
trustee or co-trustee is necessary or advisable (or the Trustee has been
advised by the Master Servicer that such separate trustee or co-trustee is
necessary or advisable) under the laws of any state in which a property securing
a Mortgage Loan is located or for the purpose of otherwise conforming to any
legal requirement, restriction or condition in any state in which a property
securing a Mortgage Loan is located or in any state in which any portion of the
Trust Fund is located.  The separate
Trustees, co-trustees, or custodians so appointed shall be trustees or
custodians for the benefit of all the Certificateholders and shall have such
powers, rights and remedies as shall be specified in the instrument of
appointment; provided, however, that no such
appointment shall, or shall be deemed to, constitute the appointee an agent of
the Trustee.  The obligation of the Trust
Administrator to make Advances pursuant to Section 5.04 and 6.14 hereof
shall not be affected or assigned by the appointment of a co-trustee.

 

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

 

105

 

(i)                                     all
powers, duties, obligations and rights conferred upon the Trustee in respect of
the receipt, custody and payment of moneys shall be exercised solely by the
Trustee;

 

(ii)                                  all
other rights, powers, duties and obligations conferred or imposed upon the
Trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee, co-trustee, or custodian jointly, except to
the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations, including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction, shall be exercised and performed by such
separate trustee, co-trustee, or custodian;

 

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

 

(iv)                              the
Trustee or the Certificateholders evidencing more than 50% of the Aggregate
Voting Interests of the Certificates may at any time accept the resignation of
or remove any separate trustee, co-trustee or custodian, so appointed by it or
them, if such resignation or removal does not violate the other terms of this
Agreement.

 

(c)                                  Any notice, request or other
writing given to the 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, co-trustee or custodian shall refer to this Agreement and the
conditions of this Article VI.  Each
separate trustee and co-trustee, upon its acceptance of the trusts, shall be
vested with the estates or property specified in its instrument of appointment,
either jointly with the 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 Trustee. 
Every such instrument shall be filed with the Trustee and a copy given
to the Master Servicer and any NIMS Insurer.

 

(d)                                 Any separate trustee, co-trustee
or custodian may, at any time, constitute the 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 Agreement on its behalf
and in its name.  If any separate
trustee, co-trustee or custodian 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 Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.

 

(e)                                  No separate trustee, co-trustee
or custodian hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.05 hereunder and no notice to
Certificateholders of the appointment shall be required under Section 6.07
hereof.

 

(f)                                    The Trustee agrees to instruct
the co-trustees, if any, to the extent necessary to fulfill the Trustee’s
obligations hereunder.

 

106

 

(g)                                 The Trustee shall pay the
reasonable compensation of the co-trustees requested by the Trustee to be so
appointed (which compensation shall not reduce any compensation payable to the
Trustee) and, if paid by the Trustee, shall be a reimbursable expense pursuant
to Section 6.12.

 

Section 6.10                                Authenticating Agents.

 

(a)                                  The Trust Administrator will act
as the Authenticating Agent and shall be authorized to act on behalf of the
Trustee in authenticating Certificates. 
Upon the removal or resignation of the Trust Administrator, the Trustee
may appoint a successor Authenticating Agent. 
Wherever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee’s certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Trustee by an Authenticating Agent and a certificate of authentication executed
on behalf of the Trustee by an Authenticating Agent.  Each Authenticating Agent must be a
corporation organized and doing business under the laws of the United States of
America or of any state, having a combined capital and surplus of at least
$15,000,000, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities and acceptable to
any NIMS Insurer.

 

(b)                                 Any Person into which any
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which any Authenticating Agent shall be a party, or any Person
succeeding to the corporate agency business of any Authenticating Agent, shall
continue to be the Authenticating Agent without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.

 

(c)                                  Any Authenticating Agent may at
any time resign by giving at least 30 days’ advance written notice of
resignation to the Trustee, any NIMS Insurer and the Depositor.  The Trustee may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent, any NIMS Insurer and the Depositor.  Upon receiving a notice of resignation or
upon such a termination, or in case at any time any Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section 6.10,
the Trustee may appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Depositor and any NIMS Insurer and shall mail
notice of such appointment to all Holders of Certificates.  Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent.  No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 6.10.  No Authenticating Agent shall have
responsibility or liability for any action taken by it as such at the direction
of the Trustee.  Any Authenticating Agent
shall be entitled to reasonable compensation for its services and, if paid by
the Trustee, it shall be a reimbursable expense pursuant to Section 6.12.

 

Section 6.11                                Indemnification of Trustee and
Trust Administrator.

 

The Trustee
and the Trust Administrator and their respective directors, officers, employees
and agents shall be entitled to indemnification from the Trust Fund for any
loss,

 

107

 

liability or expense incurred
in connection with any legal proceeding or incurred without negligence or
willful misconduct on their part, arising out of, or in connection with, the
acceptance or administration of the trusts created hereunder or in connection
with the performance of their duties hereunder or under the Cap Agreement, any
Mortgage Loan Purchase Agreement, the Servicing Agreement or any Custodial
Agreement, including any applicable fees and expenses payable pursuant to Section 6.12
and the costs and expenses of defending themselves against any claim in
connection with the exercise or performance of any of their powers or duties
hereunder, provided that:

 

(i)                                     with
respect to any such claim, the Trustee or the Trust Administrator, as
applicable, shall have given the Depositor, the Master Servicer, any NIMS
Insurer and the Holders written notice thereof promptly after a Responsible
Officer of the Trustee or the Trust Administrator, as applicable, shall have
knowledge thereof provided that the failure to provide such prompt written
notice shall not affect the Trustee’s or Trust Administrator’s right to indemnification
hereunder;

 

(ii)                                  while
maintaining control over its own defense, the Trustee or the Trust
Administrator, as applicable, shall cooperate and consult fully with the
Depositor, the Master Servicer and any NIMS Insurer in preparing such defense;
and

 

(iii)                               notwithstanding
anything to the contrary in this Section 6.11, the Trust Fund shall not be
liable for settlement of any such claim by the Trustee or the Trust
Administrator, as applicable, entered into without the prior consent of the
Depositor, the Master Servicer and any NIMS Insurer, which consent shall not be
unreasonably withheld.

 

The provisions
of this Section 6.11 shall survive any termination of this Agreement and
the resignation or removal of the Trustee or the Trust Administrator, as applicable,
and shall be construed to include, but not be limited to any loss, liability or
expense under any environmental law.

 

Section 6.12                                Fees and Expenses of Trust
Administrator, Trustee and Custodian.

 

The Trust
Administrator shall be entitled to the Trust Administrator Fee and the Trustee
shall be entitled to a Trustee Fee (which shall be paid by the Master Servicer
from its Master Servicing Fee), and reimbursement of all reasonable expenses,
disbursements and advances incurred or made by the Trust Administrator or
Trustee, as applicable, in accordance with this Agreement (including fees and
expenses of its counsel and all persons not regularly in its employment and any
amounts described in Section 10.01 to which such party is entitled as
provided therein), except for expenses, disbursements and advances incurred by
the Trustee or Trust Administrator in the routine administration of its duties
hereunder and any such expenses arising from its negligence, bad faith or
willful misconduct.  The Custodian shall
receive compensation and reimbursement or payment of its expenses under the
Custodial Agreement as provided therein; provided
that, to the extent required under Section 6 of the Custodial
Agreement, the Trustee is hereby authorized to pay such compensation from
amounts on deposit in the Collection Account prior to any distributions to
Certificateholders pursuant to Section 5.02 hereof.

 

108

 

Section 6.13                                Collection of Monies.

 

Except as
otherwise expressly provided in this Agreement, the Trustee or the Trust
Administrator may demand payment or delivery of, and shall receive and collect,
all money and other property payable to or receivable by the Trustee pursuant
to this Agreement.  The Trustee or the
Trust Administrator shall hold all such money and property received by it as
part of the Trust Fund and shall distribute it as provided in this
Agreement.  If the Trustee or the Trust
Administrator shall not have timely received amounts to be remitted with respect
to the Mortgage Loans from the Master Servicer, the Trustee or the Trust
Administrator shall request the Master Servicer to make such distribution as
promptly as practicable or legally permitted. 
If the Trustee or the Trust Administrator shall subsequently receive any
such amount, it may withdraw such request.

 

Section 6.14                                Events of Default; Trustee To
Act; Appointment of Successor.

 

(a)                                  The occurrence of any one or
more of the following events shall constitute an “Event of Default”:

 

(i)                                     Any
failure by the Master Servicer to furnish to the Trust Administrator the
Mortgage Loan data sufficient to prepare the reports described in Section 4.03(a) (other
than with respect to the information referred to in clauses (xviii), (xix),
(xx) and (xxi) of such Section 4.03(a)) which continues unremedied for a
period of one Business Day after the date upon which written notice of such
failure shall have been given to such Master Servicer by the Trustee or the
Trust Administrator or to such Master Servicer, the Trust Administrator and the
Trustee by the Holders of not less than 25% of the Class Principal Amount
(or Class Notional Amount) of each Class of Certificates affected
thereby; or

 

(ii)                                  (A) Any
failure on the part of the Master Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Master Servicer contained in this Agreement (other than reporting requirements
under Sections 9.24 or Section 9.25 of this Agreement) which continues
unremedied for a period of 30 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Master Servicer by the Trustee or the Trust Administrator, or to the Master
Servicer, the Trust Administrator and the Trustee by the Holders of more than
50% of the Aggregate Voting Interests of the Certificates or by any NIMS
Insurer; (B) any failure by the Master Servicer to duly perform, within
the required time period, its obligations under Sections 9.24 or 9.25 of this Agreement
which failure continues unremedied for a period of one Business Day after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee; or

 

(iii)                               A
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Master Servicer, and such decree or order shall
have remained in force

 

109

 

undischarged or unstayed for a period of 60 days or any Rating Agency
reduces or withdraws or threatens to reduce or withdraw the rating of the
Certificates because of the financial condition or loan servicing capability of
such Master Servicer; or

 

(iv)                              The
Master Servicer shall consent to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, marshalling of assets
and liabilities, voluntary liquidation or similar proceedings of or relating to
the Master Servicer or of or relating to all or substantially all of its
property; or

 

(v)                                 The
Master Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or

 

(vi)                              The
Master Servicer shall be dissolved, or shall dispose of all or substantially
all of its assets, or consolidate with or merge into another entity or shall
permit another entity to consolidate or merge into it, such that the resulting
entity does not meet the criteria for a successor servicer as specified in Section 9.26
hereof; or

 

(vii)                           If
a representation or warranty set forth in Section 9.13 hereof shall prove
to be incorrect as of the time made in any respect that materially and
adversely affects the interests of the Certificateholders, and the circumstance
or condition in respect of which such representation or warranty was incorrect
shall not have been eliminated or cured within 30 days after the date on which
written notice of such incorrect representation or warranty shall have been
given to the Master Servicer by the Trustee or the Trust Administrator, or to
the Master Servicer, the Trust Administrator and the Trustee by the Holders of
more than 50% of the Aggregate Voting Interests of the Certificates or by any
NIMS Insurer; or

 

(viii)                        A
sale or pledge of any of the rights of the Master Servicer hereunder or an
assignment of this Agreement by the Master Servicer or a delegation of the
rights or duties of the Master Servicer hereunder shall have occurred in any
manner not otherwise permitted hereunder and without the prior written consent
of the Trustee, any NIMS Insurer and Certificateholders holding more than 50%
of the Aggregate Voting Interests of the Certificates; or

 

(ix)                                The
Master Servicer has notice or actual knowledge that the Servicer at any time is
not either an FNMA- or FHLMC- approved Seller/Servicer, and the Master Servicer
has not terminated the rights and obligations of the Servicer under the
Servicing Agreement and replaced the Servicer with an FNMA- or FHLMC-approved
servicer within 60 days of the date the Master Servicer receives such notice or
acquires such actual knowledge; or

 

(x)                                   After
receipt of notice from the Trustee or any NIMS Insurer, any failure of the
Master Servicer to remit to the Trust Administrator any payment required to be
made to the Trust Administrator for the benefit of Certificateholders under the
terms of this Agreement, including any Advance, on any Deposit Date which such
failure

 

110

 

continues unremedied for a period of one Business Day after the date
upon which notice of such failure shall have been given to the Master Servicer
by the Trustee.

 

If an Event of
Default described in clauses (i) through (ix) of this Section shall
occur, then, in each and every case, subject to applicable law, so long as any
such Event of Default shall not have been remedied within any period of time
prescribed by this Section, the Trustee, by notice in writing to the Master
Servicer (with a copy to the Trust Administrator) may, and shall, if so
directed by Certificateholders evidencing more than 50% of the Class Principal
Amount (or Class Notional Amount) of each Class of Certificates,
terminate all of the rights and obligations of the Master Servicer hereunder
and in and to the Mortgage Loans and the proceeds thereof.  If an Event of Default described in clause
(x) of this Section shall occur, then, in each and every case, subject to
applicable law, so long as such Event of Default shall not have been remedied
within the time period prescribed by clause (x) of this Section 6.14, the
Trustee, by notice in writing to the Master Servicer, shall promptly terminate
all of the rights and obligations of the Master Servicer hereunder and in and
to the Mortgage Loans and the proceeds thereof. 
On or after the receipt by the Master Servicer of such written notice,
all authority and power of the Master Servicer, and only in its capacity as
Master Servicer under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the Trust Administrator and
upon receipt of written notice by the Trust Administrator from the Trustee
pursuant to and under the terms of this Agreement; provided,
however, the parties acknowledge that notwithstanding the preceding
sentence there may be a transition period, not to exceed 90 days, in order to
effect the transfer of the Master Servicing obligations to the Trust Administrator.  The Trust Administrator is hereby authorized
and empowered to execute and deliver, on behalf of the defaulting Master
Servicer as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents or otherwise.  The defaulting
Master Servicer agrees to cooperate with the Trustee and the Trust
Administrator in effecting the termination of the defaulting Master Servicer’s
responsibilities and rights hereunder as Master Servicer including, without
limitation, notifying Servicer of the assignment of the master servicing
function and providing the Trust Administrator or its designee all documents
and records in electronic or other form reasonably requested by it to enable
the Trust Administrator or its designee to assume the defaulting Master
Servicer’s functions hereunder and the transfer to the Trust Administrator for
administration by it of all amounts which shall at the time be or should have
been deposited by the defaulting Master Servicer in the Collection Account
maintained by such defaulting Master Servicer and any other account or fund
maintained with respect to the Certificates or thereafter received with respect
to the Mortgage Loans.  The Master
Servicer being terminated shall bear all costs of a master servicing transfer,
including but not limited to those of the Trustee or Trust Administrator
reasonably allocable to specific employees and overhead, legal fees and
expenses, accounting and financial consulting fees and expenses, and costs of
amending the Agreement, if necessary.

 

The Trust
Administrator and the Trustee shall be entitled to be reimbursed from the
Master Servicer (or by the Trust Fund, if the Master Servicer is unable to
fulfill its obligations hereunder) for all costs associated with the transfer
of servicing from the predecessor Master Servicer, including, without
limitation, any costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of such servicing

 

111

 

data as may be required by the
Trust Administrator to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Trust Administrator to master service the
Mortgage Loans properly and effectively. 
If the terminated Master Servicer does not pay such reimbursement within
thirty (30) days of its receipt of an invoice therefore, such reimbursement
shall be an expense of the Trust and the Trust Administrator and the Trustee,
as applicable, shall be entitled to withdraw such reimbursement from amounts on
deposit in the Collection Account pursuant to Section 4.04(b); provided
that the terminated Master Servicer shall reimburse the Trust for any such
expense incurred by the Trust; and provided, further,
that the Trust Administrator shall decide whether and to what extent it is in
the best interest of the Certificateholders to pursue any remedy against any
party obligated to make such reimbursement.

 

Notwithstanding
the termination of its activities as Master Servicer, each terminated Master
Servicer shall continue to be entitled to reimbursement to the extent provided
in Section 4.02 to the extent such reimbursement relates to the period
prior to such Master Servicer’s termination.

 

If any Event
of Default shall occur, the Trustee, upon a Responsible Officer of the Trustee
becoming aware of the occurrence thereof, shall promptly notify the Trust
Administrator, any NIMS Insurer and each Rating Agency of the nature and extent
of such Event of Default.  The Trust
Administrator shall immediately give written notice to the Trustee and the
Master Servicer upon the Master Servicer’s failure to remit funds on the
Deposit Date.

 

(b)                                 On and after the time the Master
Servicer receives a notice of termination from the Trustee pursuant to Section 6.14(a) or
the Trustee receives the resignation of the Master Servicer evidenced by an
Opinion of Counsel pursuant to Section 9.27 and within a period of time
not to exceed 90 days, the Trustee, unless another master servicer shall have
been appointed, shall be the successor in all respects to the Master Servicer
in its capacity as such under this Agreement and the transactions set forth or
provided for herein and shall have all the rights and powers and be subject to
all the responsibilities, duties and liabilities relating thereto and arising
thereafter placed on the Master Servicer hereunder, including the obligation to
make Advances; provided, however, that any
failure to perform such duties or responsibilities caused by the Master
Servicer’s or the Trustee’s failure to provide information required by this
Agreement shall not be considered a default by the Trustee hereunder.  In addition, the Trustee shall have no
responsibility for any act or omission of the Master Servicer prior to the issuance
of any notice of termination and within a period of time not to exceed 90 days
thereafter.  The Trustee shall have no
liability relating to the representations and warranties of the Master Servicer
set forth in Section 9.14.  In the
Trustee’s capacity as such successor, the Trustee shall have the same
limitations on liability herein granted to the Master Servicer.  As compensation therefor, the Trustee shall
be entitled to receive all compensation payable to the Master Servicer under
this Agreement, including the Master Servicing Fee.

 

(c)                                  Notwithstanding the above, the
Trustee may, if it shall be unwilling to continue to so act, or shall, if it is
unable to so act, petition a court of competent jurisdiction to appoint, or
appoint on its own behalf any established housing and home finance institution
servicer, master servicer, servicing or mortgage servicing institution having a
net worth of not less than $15,000,000 and meeting such other standards for a
successor master servicer as are set forth in

 

112

 

this Agreement, as the successor to such
Master Servicer in the assumption of all of the responsibilities, duties or
liabilities of the Master Servicer hereunder. 
Any entity designated by the Trustee as a successor master servicer may
be an Affiliate of the Trustee; provided, however,
that, unless such Affiliate meets the net worth requirements and other
standards set forth herein for a successor master servicer, the Trustee, in its
individual capacity shall agree, at the time of such designation, to be and
remain liable to the Trust Fund for such Affiliate’s actions and omissions in
performing its duties hereunder.  In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however,
that no such compensation shall be in excess of that permitted to the Master
Servicer hereunder.  The Trustee, the
Trust Administrator and such successor shall take such actions, consistent with
this Agreement, as shall be necessary to effectuate any such succession and may
make other arrangements with respect to the servicing to be conducted hereunder
which are not inconsistent herewith.  The
Master Servicer shall cooperate with the Trustee, the Trust Administrator and
any successor master servicer in effecting the termination of the Master
Servicer’s responsibilities and rights hereunder including, without limitation,
notifying Mortgagors of the assignment of the master servicing functions and
providing the Trustee, the Trust Administrator and successor master servicer,
as applicable, all documents and records in electronic or other form reasonably
requested by it to enable it to assume the Master Servicer’s functions
hereunder and the transfer to the Trustee, the Trust Administrator or such
successor master servicer, as applicable, all amounts which shall at the time
be or should have been deposited by the Master Servicer in the Collection
Account and any other account or fund maintained with respect to the
Certificates or thereafter be received with respect to the Mortgage Loans.  Neither the Trustee, the Trust Administrator
nor any other successor master servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof caused by (i) the failure of
the Master Servicer to deliver, or any delay in delivering, cash, documents or
records to it, (ii) the failure of the Master Servicer to cooperate as
required by this Agreement, (iii) the failure of the Master Servicer to
deliver the Mortgage Loan data to the Trust Administrator as required by this
Agreement or (iv) restrictions imposed by any regulatory authority having
jurisdiction over the Master Servicer. 
Neither the Trustee nor any other successor master servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by (i) the
failure of the Trustee to deliver, or any delay in delivering cash, documents
or records to it, or (ii) the failure of Trustee to cooperate as required
by this Agreement.

 

Section 6.15                                Additional Remedies of Trustee
Upon Event of Default.

 

During the continuance
of any Event of Default, so long as such Event of Default shall not have been
remedied, the Trustee, in addition to the rights specified in Section 6.14,
shall have the right, in its own name and as trustee of an express trust, to
take all actions now or hereafter existing at law, in equity or by statute to
enforce its rights and remedies and to protect the interests, and enforce the
rights and remedies, of any NIMS Insurer and the Certificateholders (including
the institution and prosecution of all judicial, administrative and other
proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to

 

113

 

any other remedy, and no delay
or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.

 

Section 6.16                                Waiver of Defaults.

 

More than 50%
of the Aggregate Voting Interests of Certificateholders, with the consent of
any NIMS Insurer may waive any default or Event of Default by the Master
Servicer in the performance of its obligations hereunder, except that a default
in the making of any required deposit to the Collection Account that would
result in a failure of the Trustee to make any required payment of principal of
or interest on the Certificates may only be waived with the consent of 100% of
the affected Certificateholders, with the consent of any NIMS Insurer. Upon any
such waiver of a past default, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.

 

Section 6.17                                Notification to Holders.

 

Upon
termination of the Master Servicer or appointment of a successor to the Master
Servicer, in each case as provided herein, the Trustee shall promptly mail
notice thereof by first class mail to the Trust Administrator, the
Certificateholders at their respective addresses appearing on the Certificate
Register and any NIMS Insurer. The Trustee shall also, within 45 days after the
occurrence of any Event of Default known to a Responsible Officer of the
Trustee, give written notice thereof to Trust Administrator, any NIMS Insurer and
the Certificateholders, unless such Event of Default shall have been cured or
waived prior to the issuance of such notice and within such 45-day period.

 

Section 6.18                                Directions by Certificateholders
and Duties of Trustee During Event of Default.

 

Subject to the
provisions of Section 8.01 hereof, during the continuance of any Event of
Default, Holders of Certificates evidencing not less than 25% of the Class Principal
Amount (or Percentage Interest) of each Class of Certificates affected
thereby may, with the consent of any NIMS Insurer, direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Agreement;
provided, however, that the Trustee
shall be under no obligation to pursue any such remedy, or to exercise any of
the trusts or powers vested in it by this Agreement (including, without
limitation, (i) the conducting or defending of any administrative action
or litigation hereunder or in relation hereto and (ii) the terminating of
the Master Servicer or any successor master servicer from its rights and duties
as master servicer hereunder) at the request, order or direction of any of the
Certificateholders or any NIMS Insurer, unless such Certificateholders or any
NIMS Insurer shall have offered to the Trustee reasonable security or indemnity
against the cost, expenses and liabilities which may be incurred therein or
thereby; and, provided further, that, subject to the provisions of Section 8.01,
the Trustee shall have the right to decline to follow any such direction if the
Trustee, in accordance with an Opinion of Counsel acceptable to any NIMS
Insurer, determines that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith determines that the action or
proceeding so directed would involve it

 

114

 

in personal liability for which
it is not indemnified to its satisfaction or be unjustly prejudicial to the non-assenting
Certificateholders.

 

Section 6.19                                Action Upon Certain Failures of
the Master Servicer and Upon Event of Default.

 

In the event
that the Trustee or the Trust Administrator shall have actual knowledge of any
action or inaction of the Master Servicer that would become an Event of Default
upon the Master Servicer’s failure to remedy the same after notice, the Trustee
or the Trust Administrator, as applicable, shall give notice thereof to the
Master Servicer and any NIMS Insurer and the Trustee or Trust Administrator, as
applicable.

 

Section 6.20                                Preparation of Tax Returns and
Other Reports.

 

(a)                                  The Trust Administrator shall
prepare or cause to be prepared on behalf of the Trust Fund, based upon
information calculated in accordance with this Agreement pursuant to
instructions given by the Depositor, and the Trust Administrator shall file
federal tax returns, all in accordance with Article X hereof.  If the Trust Administrator determines that a
state tax return or other return is required, then, at its sole expense, the
Trust Administrator shall prepare and file such state income tax returns and
such other returns as may be required by applicable law relating to the Trust
Fund, and, if required by state law, and shall file any other documents to the
extent required by applicable state tax law (to the extent such documents are
in the Trust Administrator’s possession). 
The Trust Administrator shall forward copies to the Depositor of all
such returns and Form 1099 supplemental tax information and such other
information within the control of the Trust Administrator as the Depositor may
reasonably request in writing, and shall forward to the Trustee for
distribution to each Certificateholder such forms and furnish such information
within the control of the Trust Administrator as are required by the Code and
the REMIC Provisions to be furnished to them, and will prepare and disseminate
to the Trustee for distribution to Certificateholders Form 1099
(supplemental tax information) (or otherwise furnish information within the
control of the Trust Administrator and the Trustee) to the extent required by
applicable law.  The Master Servicer will
indemnify the Trust Administrator and the Trustee for any liability of or
assessment against the Trust Administrator and the Trustee, as applicable,
resulting from any error in any of such tax or information returns directly
resulting from errors in the information provided by such Master Servicer.

 

(b)                                 The Trust Administrator shall
prepare and file with the Internal Revenue Service (“IRS”), on behalf of the
Trust Fund and each of REMIC 1, REMIC 2, REMIC 3 and REMIC 4, an application
for an employer identification number on IRS Form SS-4 or by any other
acceptable method.  The Trust
Administrator shall also file a Form 8811 as required.  The Trust Administrator, upon receipt from
the IRS of the Notice of Taxpayer Identification Number Assigned, shall upon
request promptly forward a copy of such notice to the Trustee and the
Depositor.  The Trustee shall have no
obligation to verify the information in any Form 8811 or Form SS-4
filing.

 

(c)                                  The Depositor shall prepare or
cause to be prepared the initial current report on Form 8-K.  Thereafter,
within 15 days after each Distribution Date, the Trust Administrator shall, in
accordance with industry standards, file with the Securities and Exchange
Commission (the

 

115

 

“Commission”) via the Electronic Data
Gathering and Retrieval System (EDGAR), a Form 8-K with a copy of the
statement to the Certificateholders for such Distribution Date as an exhibit
thereto.  Prior to January 30, 2006,
the Trust Administrator shall, in accordance with industry standards, file a Form 15
Suspension Notification with respect to the Trust Fund, if applicable.  Prior to March 30, 2006, the Trust
Administrator shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. 
The Form 10-K shall include the certification required pursuant to Rule l3a-14
under the Securities and Exchange Act of 1934, as amended (the “Form 10-K
Certification”) signed by an appropriate party or parties (which Form 10-K
Certification the Trust Administrator shall be required to sign).  The Depositor hereby grants to the Trust
Administrator a limited power of attorney to execute and file each Form 8-K
on behalf of the Depositor.  Such power
of attorney shall continue until either the earlier of (i) receipt by the
Trust Administrator from the Depositor of written termination of such power of
attorney and (ii) the termination of the Trust Fund.  The Depositor agrees to promptly furnish to
the Trust Administrator, from time to time upon request, such further
information, reports, and financial statements within its control related to
this Agreement and the Mortgage Loans as the Trust Administrator reasonably
deems appropriate to prepare and file all necessary reports, and financial
statements within its control related to this Agreement and the Mortgage Loans
as the Trust Administrator reasonably deems appropriate to prepare and file all
necessary reports with the Commission. 
The Trust Administrator shall have no responsibility to file any items
other than those specified in this section.

 

(d)                                 Each person (including their
officers or directors) that signs any Form 10-K Certification shall be
entitled to indemnification from the Trust Fund for any liability or expense
incurred by it in connection with such certification, other than any liability
or expense attributable to such Person’s own bad faith, negligence or willful
misconduct.  The provisions of this subsection shall
survive any termination of this Agreement and the resignation or removal of
such Person.

 

ARTICLE VII

PURCHASE OF MORTGAGE LOANS AND 

TERMINATION OF THE TRUST FUND

 

Section 7.01                                Purchase of Mortgage Loans;
Termination of Trust Fund Upon Purchase or Liquidation of All Mortgage Loans.

 

(a)                                  The respective obligations and
responsibilities of the Trustee and the Master Servicer created hereby (other
than the obligation of the Trustee to make payments to Certificateholders as
set forth in Section 7.02, the obligation of the Master Servicer to make a
final remittance to the Trust Administrator pursuant to Section 4.01, the
obligation of the Trust Administrator to make a final remittance to the Trustee
pursuant to Section 4.05 and the obligations of the Master Servicer to the
Trustee pursuant to Sections 9.10 and 9.14) shall terminate on the earliest of (i) the
final payment or other liquidation of the last Mortgage Loan remaining in the
Trust Fund and the disposition of all REO Property, (ii) the sale of the
property held by the Trust Fund in accordance with Section 7.01(b) and
(iii) the Latest Possible Maturity Date; provided,
however, that in no event shall the Trust Fund created hereby
continue beyond the expiration of 2l years from the death of the last survivor
of the descendants of Joseph P. Kennedy,

 

116

 

the late Ambassador of the United States to
the Court of St. James’s, living on the date hereof.  Any termination of the Trust Fund shall be
carried out in such a manner so that the termination of each REMIC included
therein shall qualify as a “qualified liquidation” under the REMIC Provisions.

 

(b)                                 On any Distribution Date
occurring on or after the Initial Optional Purchase Date, Fieldstone Mortgage
Company (as owner of the servicing rights), with the prior written consent of
any NIMS Insurer which consent shall not be unreasonably withheld, has the
option to cause the Trust Fund to adopt a plan of complete liquidation pursuant
to Section 7.03(a)(i) hereof to sell all of its property.  Fieldstone Mortgage Company has agreed not to
exercise such option so long as any NIM Securities remain outstanding.  If Fieldstone Mortgage Company fails to exercise
such option, the NIMS Insurer, if any, will have the right to exercise such
option so long as it is insuring the net interest margin securities or any
amounts payable to the NIMS Insurer in respect of the insurance remain unpaid.  If Fieldstone Mortgage Company and the NIMS
Insurer, if any, fail to exercise such option, the Subservicer will have the
right to exercise such option.  Upon
exercise of such option by Fieldstone Mortgage Company, the NIMS Insurer or the
Subservicer, the property of the Trust Fund shall be sold to Fieldstone
Mortgage Company, the NIMS Insurer or the Subservicer, as applicable, at a
price (the “Termination Price”) equal to the sum of (i) 100% of the unpaid
principal balance of each Mortgage Loan on the day of such purchase plus interest
accrued thereon at the applicable Mortgage Rate with respect to any Mortgage
Loan to the Due Date in the Collection Period immediately preceding the related
Distribution Date to the date of such repurchase, (ii) the amount of any
costs and damages incurred by the Trust Fund associated with any violation of
any applicable federal, state, or local predatory or abusive lending law
arising from or in connection with the origination of any Mortgage Loan
purchased by Fieldstone Mortgage Company, the NIMS Insurer or the Subservicer,
as applicable, pursuant to this Section 7.01(b) and (iii) the
fair market value of any REO Property and any other property held by any REMIC,
such fair market value to be determined by an appraiser or appraisers mutually
agreed upon by Fieldstone Mortgage Company, any NIMS Insurer and the
Trustee.  The Master Servicer, the Trust
Administrator, the Servicer and the Subservicer (or the Trustee, if applicable)
shall be reimbursed from the Termination Price for any Mortgage Loan or related
REO Property for any Advances made or other amounts advanced with respect to
the Mortgage Loans that are reimbursable to such Persons under this Agreement
or the Servicing Agreement (or to the Trustee hereunder), together with any
accrued and unpaid compensation due to the Master Servicer, the NIMS Insurer or
the Subservicer hereunder or the Servicer and the Subservicer thereunder.

 

Section 7.02                                Procedure Upon Termination of
Trust Fund.

 

(a)                                  Notice of any termination
pursuant to the provisions of Section 7.01, specifying the Distribution
Date upon which the final distribution shall be made, shall be given promptly
by the Trust Administrator by first class mail to Certificateholders mailed
upon (x) the sale of all of the property of the Trust Fund by the Trustee
pursuant to Section 7.01(b) or (y) upon the final payment or other
liquidation of the last Mortgage Loan or REO Property in the Trust Fund.  Such notice shall specify (A) the
Distribution Date upon which final distribution on the Certificates of all
amounts required to be distributed to Certificateholders pursuant to Section 5.02
will be made upon presentation and surrender of the Certificates at the
Corporate Trust Office of the Trust Administrator, and (B) that the Record
Date otherwise applicable to such Distribution Date is not

 

117

 

applicable, distribution being made only upon
presentation and surrender of the Certificates at the office or agency of the
Trust Administrator therein specified.  The
Trust Administrator shall give such notice to the Trustee, the Master Servicer
and the Certificate Registrar at the time such notice is given to Holders of
the Certificates.  Upon any such
termination, the duties of the Certificate Registrar with respect to the
Certificates shall terminate and the Trust Administrator shall terminate the
Collection Account and any other account or fund maintained with respect to the
Certificates, subject to the Trust Administrator’s obligation hereunder to hold
all amounts payable to Certificateholders in trust without interest pending
such payment.

 

(b)                                 In the event that all of the
Holders do not surrender their Certificates for cancellation within three
months after the time specified in the above-mentioned written notice, the
Trust Administrator shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. 
If within one year after the second notice any Certificates shall not
have been surrendered for cancellation, the Trust Administrator may take
appropriate steps to contact the remaining Certificateholders concerning
surrender of such Certificates, and the cost thereof shall be paid out of the
amounts distributable to such Holders. 
If within two years after the second notice any Certificates shall not
have been surrendered for cancellation, the Trust Administrator shall, subject
to applicable state law relating to escheatment, hold all amounts distributable
to such Holders for the benefit of such Holders.  No interest shall accrue on any amount held
by the Trust Administrator and not distributed to a Certificateholder due to
such Certificateholder’s failure to surrender its Certificate(s) for payment of
the final distribution thereon in accordance with this Section.

 

(c)                                  Any reasonable expenses incurred
by the Trustee or Trust Administrator in connection with any termination or
liquidation of the Trust Fund shall be reimbursed from proceeds received from
the liquidation of the Trust Fund.

 

Section 7.03                                Additional Trust Fund
Termination Requirements.

 

(a)                                  Any termination of the Trust
Fund shall be effected in accordance with the following additional
requirements, unless the Trustee receives (at the expense of the party
exercising the option to purchase all of the Mortgage Loans pursuant to Section 7.01(b)),
an Opinion of Counsel, addressed to the Trustee and any NIMS Insurer to the
effect that the failure of the Trust Fund to comply with the requirements of
this Section 7.03 will not result in an Adverse REMIC Event:

 

(i)                                     Within
89 days prior to the time of the making of the final payment on the
Certificates, upon notification by Fieldstone Mortgage Company, any NIMS
Insurer or the Subservicer that it intends to exercise its option to cause the
termination of the Trust Fund, the Trustee shall adopt a plan of complete
liquidation of the Trust Fund on behalf of each REMIC, meeting the requirements
of a qualified liquidation under the REMIC Provisions;

 

(ii)                                  Any
sale of the assets of the Trust Fund pursuant to Section 7.02 shall be a
sale for cash and shall occur at or after the time of adoption of such a plan
of

 

118

 

complete liquidation and prior to the time of making of the final
payment on the Certificates;

 

(iii)                               On
the date specified for final payment of the Certificates, the Trust
Administrator shall make final distributions of principal and interest on the
Certificates in accordance with Section 5.02 and, after payment of, or
provision for any outstanding expenses, distribute or credit, or cause to be
distributed or credited, to the Holders of the Residual Certificates all cash
on hand after such final payment (other than cash retained to meet claims), and
the Trust Fund (and each REMIC) shall terminate at that time; and

 

(iv)                              In
no event may the final payment on the Certificates or the final distribution or
credit to the Holders of the Residual Certificates be made after the 89th day
from the date on which the plan of complete liquidation is adopted.

 

(b)                                 By its acceptance of a Residual
Certificate, each Holder thereof hereby agrees to accept the plan of complete
liquidation prepared by the Depositor and adopted by the Trustee under this Section and
to take such other action in connection therewith as may be reasonably
requested by the Trust Administrator, Master Servicer or the Servicer.

 

(c)                                  In connection with the
termination of the Trust Fund, the Trustee may request an Opinion of Counsel
addressed to the Trustee (at the expense of the Person exercising the option to
purchase all Mortgage Loans pursuant to Section 7.01(b)) to the effect
that all the requirements of a qualified liquidation under the REMIC Provisions
have been met.

 

Section 7.04                                Optional Repurchase Right.

 

The NIMS
Insurer, if any, may repurchase any Distressed Mortgage Loan for a purchase
price equal to the outstanding principal balance of such Mortgage Loan, plus
accrued interest thereon to the date of repurchase plus any unreimbursed
Advances, Servicing Advances, Servicing Fees or Master Servicing Fees allocable
to such Distressed Mortgage Loan.  Any
such repurchase shall be accomplished by the NIM Insurer’s remittance of the
purchase price for the Distressed Mortgage Loan to the Master Servicer for
deposit into the Collection Account.

 

ARTICLE VIII

RIGHTS OF CERTIFICATEHOLDERS

 

Section 8.01                                Limitation on Rights of Holders.

 

(a)                                  The death or incapacity of any
Certificateholder shall not operate to terminate this Agreement or this Trust
Fund, nor entitle such Certificateholder’s legal representatives or heirs to
claim an accounting or take any action or proceeding in any court for a
partition or winding up of this Trust Fund, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.  Except as otherwise expressly provided
herein, no Certificateholder, solely by virtue of its status as a
Certificateholder, shall have any right to vote or in any manner otherwise
control the Master Servicer or the operation and management of the Trust Fund,
or the obligations of the parties hereto, nor shall anything herein set forth,
or contained in the terms of the Certificates, be construed so as to constitute
the Certificateholders from time to time as

 

119

 

partners or members of an
association, nor shall any Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.

 

(b)                                 No Certificateholder, solely by
virtue of its status as Certificateholder, shall have any right by virtue or by
availing of any provision of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of Certificates evidencing not less than
25% of the Class Principal Amount or Class Notional Amount (or
Percentage Interest) of Certificates of each Class affected thereby shall,
with the prior written consent of any NIMS Insurer, have made written request
upon the Trustee to institute such action, suit or proceeding in its own name
as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the cost, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for sixty days after its receipt
of such notice, request and offer of indemnity, shall have neglected or refused
to institute any such action, suit or proceeding and no direction inconsistent
with such written request has been given such Trustee during such sixty-day
period by such Certificateholders or any NIMS insurer; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder, any NIMS Insurer, the Trust Administrator and the
Trustee, that no one or more Holders of Certificates shall have any right in
any manner whatever by virtue or by availing of any provision of this Agreement
to affect, disturb or prejudice the rights of the Holders of any other of such
Certificates or the rights of any NIMS Insurer, or to obtain or seek to obtain
priority over or preference to any other such Holder or any NIMS Insurer, or to
enforce any right under this Agreement, except in the manner herein provided
and for the benefit of all Certificateholders and the NIMS Insurer.  For the protection and enforcement of the
provisions of this Section, each and every Certificateholder, the NIMS Insurer
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

 

Section 8.02                                Access to List of Holders.

 

(a)                                  If the Trustee is not acting as
Certificate Registrar, the Certificate Registrar will furnish or cause to be
furnished to the Trustee and any NIMS Insurer, within fifteen days after
receipt by the Certificate Registrar of a request by the Trustee or any NIMS
Insurer in writing, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Certificateholders of each Class as of
the most recent Record Date.

 

(b)                                 If any NIMS Insurer or three or
more Holders or Certificate Owners (hereinafter referred to as “Applicants”)
apply in writing to the Trustee, and such application states that the
Applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Certificates and is accompanied by a
copy of the communication which such Applicants propose to transmit, then the
Trustee shall, within five Business Days after the receipt of such application,
afford such Applicants reasonable access during the normal business hours of
the Trustee to the most recent list of Certificateholders held by the Trustee
or shall, as an alternative, send, at the Applicants’ expense, the written
communication proffered by the Applicants to all Certificateholders at their
addresses as they appear in the Certificate Register.

 

120

 

(c)                                  Every Holder or Certificate
Owner, if the Holder is a Clearing Agency, by receiving and holding a
Certificate, agrees with the Depositor, the Master Servicer, the Trust
Administrator, any NIMS Insurer, the Certificate Registrar and the Trustee that
neither the Depositor, the Master Servicer, the Trust Administrator, any NIMS
Insurer, the Certificate Registrar nor the Trustee shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Certificateholders hereunder, regardless of the source from which such
information was derived.

 

Section 8.03                                Acts of Holders of Certificates.

 

(a)                                  Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by this
Agreement to be given or taken by Holders or Certificate Owner, if the Holder
is a Clearing Agency, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent 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 Trustee and the Trust Administrator and, where
expressly required herein, to the Master Servicer.  Such instrument or instruments (as the action
embodies therein and evidenced thereby) are herein sometimes referred to as an “Act”
of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or
of a writing appointing any such agents shall be sufficient for any purpose of
this Agreement and conclusive in favor of the Trustee, the Trust Administrator
and the Master Servicer, if made in the manner provided in this Section.  Each of the Trustee, the Trust Administrator
and the Master Servicer shall promptly notify the others of receipt of any such
instrument by it, and shall promptly forward a copy of such instrument to the
others.

 

(b)                                 The fact and date of the
execution by any Person of any such instrument or writing may be proved by the
affidavit of a witness of such execution or by the certificate of any notary
public or other officer authorized by law to take acknowledgments or deeds,
certifying that the individual signing such instrument or writing acknowledged
to him the execution thereof.  Whenever
such execution is by an officer of a corporation or a member of a partnership
on behalf of such corporation or partnership, such certificate or affidavit
shall also constitute sufficient proof of his authority.  The fact and date of the execution of any
such instrument or writing, or the authority of the individual executing the
same, may also be proved in any other manner which the Trustee deems
sufficient.

 

(c)                                  The ownership of Certificates
(whether or not such Certificates shall be overdue and notwithstanding any
notation of ownership or other writing thereon made by anyone other than the
Trustee) shall be proved by the Certificate Register, and none of the Trustee,
the Master Servicer, the Trust Administrator, the NIMS Insurer, or the
Depositor shall be affected by any notice to the contrary.

 

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

 

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ARTICLE IX

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS 

BY THE MASTER SERVICER

 

Section 9.01                                Duties of the Master Servicer.

 

The
Certificateholders, by their purchase and acceptance of the Certificates,
appoint Wells Fargo Bank Minnesota, National Association, as Master
Servicer.  For and on behalf of the
Depositor, the Trustee and the Certificateholders, the Master Servicer shall
master service the Mortgage Loans in accordance with the provisions of this
Agreement and the provisions of the Servicing Agreement.

 

The parties
acknowledge and agree that, pursuant to the terms of the Servicing Agreement,
beginning on [          ], 2005, the
Subservicer will perform the obligations of the Servicer under Articles III, IV
and V of the Servicing Agreement (except as expressly set forth therein).  For purposes of this Article IX, all
references herein to the Servicer shall mean Fieldstone Mortgage Company as
servicer before such servicing transfer date and shall mean the Subservicer
thereafter, except to the extent that the context requires otherwise.

 

Section 9.02                                Master Servicer Fidelity Bond
and Master Servicer Errors and Omissions Insurance Policy.

 

(a)                                  The Master Servicer, at its
expense, shall maintain in effect a Master Servicer Fidelity Bond and a Master
Servicer Errors and Omissions Insurance Policy, affording coverage with respect
to all directors, officers, employees and other Persons acting on such Master
Servicer’s behalf, and covering errors and omissions in the performance of the
Master Servicer’s obligations hereunder. 
The Master Servicer Errors and Omissions Insurance Policy and the Master
Servicer Fidelity Bond shall be in such form and amount that would be
consistent with coverage customarily maintained by master servicers of mortgage
loans similar to the Mortgage Loans and shall by its terms not be cancelable
without thirty days’ prior written notice to the Trustee and any NIMS Insurer,
the Master Servicer shall provide the Trustee and any NIMS Insurer upon
request, with a copy of such policy and fidelity bond.  The Master Servicer shall (i) require
the Servicer to maintain an Errors and Omissions Insurance Policy and a
Servicer Fidelity Bond in accordance with the provisions of the Servicing
Agreement, (ii) cause the Servicer or the Subservicer to provide to the
Master Servicer certificates evidencing that such policy and bond is in effect
and to furnish to the Master Servicer any notice of cancellation, non-renewal,
or modification of the policy or bond received by it, as and to the extent
provided in the Servicing Agreement, and (iii) furnish copies of such
policies and of the certificates and notices referred to in clause (ii) to
the Trustee upon request.

 

(b)                                 The Master Servicer shall
promptly report to the Trustee and any NIMS Insurer any material changes that
may occur in the Master Servicer Fidelity Bond or the Master Servicer Errors
and Omissions Insurance Policy and shall furnish to the Trustee and any NIMS
Insurer, on request, certificates evidencing that such bond and insurance
policy are in full force and effect.  The
Master Servicer shall promptly report to the Trustee and any NIMS Insurer all
cases of embezzlement or fraud, if such events involve funds relating to the
Mortgage Loans.  The total

 

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losses, regardless of whether claims are
filed with the applicable insurer or surety, shall be disclosed in such reports
together with the amount of such losses covered by insurance.  If a bond or insurance claim report is filed
with any of such bonding companies or insurers, the Master Servicer shall
promptly furnish a copy of such report to the Trustee and any NIMS
Insurer.  Any amounts relating to the
Mortgage Loans collected by the Master Servicer under any such bond or policy
shall be promptly remitted by the Master Servicer to the Trustee for deposit
into the Collection Account.  Any amounts
relating to the Mortgage Loans collected by the applicable Servicer under any
such bond or policy shall be remitted to the Master Servicer to the extent
provided in the Servicing Agreement.

 

Section 9.03                                Master Servicer’s Financial
Statements and Related Information.

 

For each year
this Agreement is in effect, the Master Servicer shall submit to the Trustee,
any NIMS Insurer, each Rating Agency and the Depositor a copy of its annual
unaudited financial statements on or prior to May 31 of each year,
beginning May 31, 2006.  Such
financial statements shall include a balance sheet, income statement, statement
of retained earnings, statement of additional paid-in capital, statement of
changes in financial position and all related notes and schedules and shall be
in comparative form, certified by a nationally recognized firm of Independent
Accountants to the effect that such statements were examined and prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with that of the preceding year.

 

Section 9.04                                Power to Act; Procedures.

 

(a)                                  The Master Servicer shall master
service the Mortgage Loans and shall have full power and authority, subject to
the REMIC Provisions and the provisions of Article X hereof, and the
Servicer shall have full power and authority (to the extent provided in the
Servicing Agreement) to do any and all things that it may deem necessary or
desirable in connection with the servicing and administration of the Mortgage
Loans, including but not limited to the power and authority (i) to execute
and deliver, on behalf of the Certificateholders and the Trustee, customary
consents or waivers and other instruments and documents, (ii) to consent
to transfers of any Mortgaged Property and assumptions of the Mortgage Notes
and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other
conversion of the ownership of the Mortgaged Property securing any Mortgage
Loan, in each case, in accordance with the provisions of this Agreement and the
Servicing Agreement, as applicable; provided that the Master Servicer shall not
take, or knowingly permit the Servicer to take, any action that is inconsistent
with or prejudices the interests of the Trust Fund or the Certificateholders in
any Mortgage Loan or the rights and interests of the Depositor, the Trustee,
the Certificateholders under this Agreement. 
The Master Servicer shall represent and protect the interests of the
Trust Fund in the same manner as it protects its own interests in mortgage
loans in its own portfolio in any claim, proceeding or litigation regarding a
Mortgage Loan and shall not make or knowingly permit the Servicer to make any
modification, waiver or amendment of any term of any Mortgage Loan that would
cause an Adverse REMIC Event.  Without
limiting the generality of the foregoing, the Master Servicer in its own name
or in the name of the Servicer, and the Servicer, to the extent such authority
is delegated to the Servicer under the Servicing Agreement, is hereby
authorized and empowered by the Trustee when the Master Servicer or the
Servicer, as the case may be, believes it appropriate in its best judgment and
in

 

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accordance with Accepted Servicing Practices
and the Servicing Agreement, to execute and deliver, on behalf of itself and
the Certificateholders, the Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and
all other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties.  The
Trustee shall furnish to the Master Servicer, upon request, with any powers of
attorney empowering the Master Servicer or the Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with the Servicing Agreement and
this Agreement, and the Trustee shall execute and deliver such other documents,
as the Master Servicer may request, necessary or appropriate to enable the
Master Servicer to master service the Mortgage Loans and carry out its duties
hereunder and to allow the Servicer to service the Mortgage Loans, in each case
in accordance with Accepted Servicing Practices (and the Trustee shall have no
liability for misuse of any such powers of attorney by the Master Servicer or
the Servicer).  If the Master Servicer or
the Trustee has been advised that it is likely that the laws of the state in
which action is to be taken prohibit such action if taken in the name of the
Trustee or that the Trustee would be adversely affected under the “doing
business” or tax laws of such state if such action is taken in its name, then
upon request of the Trustee the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 6.09 hereof.  In no event shall the Master Servicer,
without the Trustee’s written consent: (i) initiate any action, suit or
proceeding solely under the Trustee’s name without indicating the Master
Servicer’s representative capacity or (ii) take any action with the intent
to cause, and which actually does cause, the Trustee to be registered to do
business in any state.  The Master
Servicer shall indemnify the Trustee for any and all costs, liabilities and
expenses incurred by the Trustee in connection with the negligent or willful
misuse of such powers of attorney by the Master Servicer.  In the performance of its duties hereunder,
the Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee on behalf
of the Trust Fund, be deemed to be the agent of the Trustee.

 

(b)                                 In master servicing and
administering the Mortgage Loans, the Master Servicer shall employ procedures
and exercise the same care that it customarily employs and exercises in master
servicing and administering loans for its own account, giving due consideration
to Accepted Servicing Practices where such practices do not conflict with this
Agreement.  Consistent with the
foregoing, the Master Servicer may, and may permit the Servicer to, in its
discretion (i) waive any late payment charge (but not any Prepayment
Premium) and (ii) extend the due dates for payments due on a Mortgage Note
for a period not greater than 120 days; provided, however,
that the maturity of any Mortgage Loan shall not be extended past the date on
which the final payment is due on the latest maturing Mortgage Loan as of the
Cut-off Date.  In the event of any
extension described in clause (ii) above, the Master Servicer shall make
or cause the Servicer and the Subservicer (if required by the Servicing
Agreement) to make Advances on the related Mortgage Loan in accordance with the
provisions of Section 5.04 on the basis of the amortization schedule of
such Mortgage Loan without modification thereof by reason of such
extension.  Notwithstanding anything to
the contrary in this Agreement, the Master Servicer shall not knowingly permit
any modification, waiver or amendment of any material term of any Mortgage
Loan, unless: (1) such Mortgage Loan is in default or default by the
related Mortgagor is, in the reasonable judgment of the Master Servicer, the
Servicer or the Subservicer, reasonably foreseeable and in the case of a waiver
if a Prepayment Premium such waiver would maximize

 

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recovery of total proceeds, from the Mortgage
Loan, taking into account the amount of the Prepayment Premium and the related
Mortgage Loan and, (2) the Master Servicer shall have provided or (if
required by the Servicing Agreement) caused to be provided to the Trustee an
Opinion of Counsel addressed to the Trustee (which opinion shall, if provided
by the Master Servicer, be an expense reimbursed from the Collection Account
pursuant to Section 4.02(v)) in writing to the effect that such
modification, waiver or amendment would not result in an Adverse REMIC Event.

 

Section 9.05                                Enforcement of Servicer’s and
Master Servicer’s Obligations.

 

(a)                                  The Servicing Agreement requires
the applicable Servicer, respectively, to service the Mortgage Loans in
accordance with the provisions thereof. 
References in this Agreement to actions taken or to be taken by the
Master Servicer include actions taken or to be taken by the Servicer on behalf
of the Master Servicer.  Any fees and
other amounts payable to the Servicer shall be deducted from amounts remitted
to the Master Servicer by the Servicer (to the extent permitted by the
Servicing Agreement) and shall not be an obligation of the Trust Fund or the
Master Servicer.

 

(b)                                 Costs incurred by the Master
Servicer or by the Servicer in effecting the timely payment of taxes and
assessments on the properties subject to the Mortgage Loans may be added to the
amount owing under the related Mortgage Note where the terms of the Mortgage
Note so permit; provided, however, that the
addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders.  Such costs, to the extent that they are
unanticipated, extraordinary costs, and not ordinary or routine costs shall be
recoverable as a Servicing Advance by the Master Servicer pursuant to Section 4.02.

 

Section 9.06                                Termination of the Servicing
Agreement; Successor Servicers.

 

(a)                                  The Master Servicer shall be
entitled to terminate the rights and obligations of the Servicer or (if the
Servicer fails to do so pursuant to the provision of the Servicing Agreement)
the Subservicer under the Servicing Agreement in accordance with the terms and
conditions of the Servicing Agreement and without any limitation by virtue of
this Agreement; provided, however, that in the
event of termination of either the Servicer or both the Servicer and the
Subservicer by the Master Servicer, the Master Servicer shall provide for the
servicing of the Mortgage Loans by a successor Servicer to be appointed as
provided in the Servicing Agreement.

 

The parties
acknowledge that notwithstanding the preceding sentence, there may be a
transition period, not to exceed 90 days, in order to effect the transfer of
servicing to a successor Servicer.  The
Master Servicer shall be entitled to be reimbursed from the Servicer or the
Subservicer (or by the Trust Fund, if the Servicer or the Subservicer is unable
to fulfill its obligations under the Servicing Agreement) for all costs
associated with the transfer of servicing from the predecessor servicer,
including without limitation, any costs or expenses associated with the
complete transfer or all servicing data and the completion, correction or
manipulation of such servicing data, as may be required by the Master Servicer to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the Master Servicer to service the Mortgage Loans properly and
effectively.

 

125

 

(b)                                 If the Master Servicer acts as a
successor Servicer, it will not assume liability for the representations and
warranties of the Servicer, if any, that it replaces.  The Master Servicer shall use reasonable
efforts to have the successor Servicer assume liability for the representations
and warranties made by the terminated Servicer, as applicable, in the Servicing
Agreement, and in the event of any such assumption by the successor Servicer,
the Trustee or the Master Servicer, as applicable, may, in the exercise of its
business judgment, release the terminated Servicer from liability for such
representations and warranties.

 

(c)                                  If the Master Servicer acts as a
successor Servicer, it will have no obligation to make an Advance if it
determines in its reasonable judgment that such Advance is non-recoverable.  To the extent that the Master Servicer is
unable to find a successor Servicer that is willing to service the Mortgage
Loans for the Servicing Fee because of the obligation of the Servicer to make
Advances regardless of whether such Advance is recoverable, the Servicing
Agreement may be amended to provide that the successor Servicer shall have no
obligation to make an Advance if it determines in its reasonable judgment that
such Advance is non-recoverable and provides an Officer’s Certificate to such
effect to the Master Servicer, the Trustee and the NIMS Insurer.

 

Section 9.07                                Master Servicer Liable for
Enforcement.

 

Notwithstanding
the Servicing Agreement, the Master Servicer shall remain obligated and liable
to the Trustee, any NIMS Insurer and the Certificateholders in accordance with
the provisions of this Agreement, to the extent of its obligations hereunder,
without diminution of such obligation or liability by virtue of the Servicing
Agreement.  The Master Servicer shall use
commercially reasonable efforts to ensure that the Mortgage Loans are serviced
in accordance with the provisions of this Agreement and shall use commercially
reasonable efforts to enforce the provisions of the Servicing Agreement for the
benefit of the Certificateholders and any NIMS Insurer.  The Master Servicer shall be entitled to
enter into any agreement with the Servicer for indemnification of the Master
Servicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.  Except as
expressly set forth herein, the Master Servicer shall have no liability for the
acts or omissions of the Servicer in the performance by the Servicer of its
obligations under the Servicing Agreement.

 

Section 9.08                                No Contractual Relationship
Between the Servicer, the Subservicer and Trustee or Depositor.

 

The Servicing
Agreement that may be entered into and any other transactions or services
relating to the Mortgage Loans involving the Servicer or the Subservicer in its
capacity as such and not as an originator shall be deemed to be between the
Servicer or the Subservicer, the Seller and the Master Servicer, and the
Trustee, any NIMS Insurer and the Depositor shall not be deemed parties thereto
and shall have no obligations, duties or liabilities with respect to the
Servicer except as set forth in Section 9.9 hereof, but shall have rights
thereunder as third party beneficiaries. 
It is furthermore understood and agreed by the parties hereto that the
obligations of the Servicer or the Subservicer are set forth in their entirety
in the Servicer’s the Servicing Agreement and the Servicer has no obligations
under and is not otherwise bound by the terms of this Agreement.

 

126

 

Section 9.09                                Assumption of Servicing Agreement
by Trust Administrator.

 

(a)                                  In the event the Master Servicer
shall for any reason no longer be the Master Servicer (including by reason of
any Event of Default under this Agreement), after a period not to exceed ninety
days after the Trust Administrator receives written notice from the Trustee
pursuant to Section 6.14 or Section 9.27, as applicable, the Trust
Administrator shall thereupon assume all of the rights and obligations of such
Master Servicer hereunder and under the Servicing Agreement entered into with
respect to the Mortgage Loans.  The Trust
Administrator, its designee or any successor master servicer appointed by the
Trust Administrator shall be deemed to have assumed all of the Master Servicer’s
interest herein and therein to the same extent as if such Servicing Agreement
had been assigned to the assuming party, except that the Master Servicer shall
not thereby be relieved of any liability or obligations of the Master Servicer
under such Servicing Agreement accruing prior to its replacement as Master
Servicer, and shall be liable to the Trust Administrator and any NIMS Insurer,
and hereby agrees to indemnify and hold harmless the Trust Administrator and
any NIMS Insurer from and against all costs, damages, expenses and liabilities
(including reasonable attorneys’ fees) incurred by the Trust Administrator or
any NIMS Insurer as a result of such liability or obligations of the Master
Servicer and in connection with the Trust Administrator’s assumption (but not
its performance, except to the extent that costs or liability of the Trust
Administrator are created or increased as a result of negligent or wrongful
acts or omissions of the Master Servicer prior to its replacement as Master
Servicer) of the Master Servicer’s obligations, duties or responsibilities
thereunder.

 

(b)                                 The Master Servicer that has
been terminated shall, upon request of the Trust Administrator but at the
expense of such Master Servicer, deliver to the assuming party all documents
and records relating to the Servicing Agreement and the related Mortgage Loans
and an accounting of amounts collected and held by it and otherwise use its
best efforts to effect the orderly and efficient transfer of the Servicing
Agreement to the assuming party.

 

Section 9.10                                Due-on-Sale Clauses; Assumption
Agreements.

 

To the extent
provided in the Servicing Agreement, to the extent Mortgage Loans contain
enforceable due-on-sale clauses, the Master Servicer shall cause the related
Servicer to enforce such clauses in accordance with the Servicing Agreement.  If applicable law prohibits the enforcement
of a due-on-sale clause or such clause is otherwise not enforced in accordance
with the Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the Servicing Agreement.

 

Section 9.11                                Release of Mortgage Files.

 

(a)                                  Upon (i) becoming aware of
the payment in full of any Mortgage Loan or (ii) the receipt by the Master
Servicer of a notification that payment in full has been or will be escrowed in
a manner customary for such purposes, the Master Servicer will, or will cause
the Servicer or the Subservicer to, promptly notify the Trustee (or the
Custodian) and the Trust Administrator by a certification (which certification
shall include a statement to the effect that all amounts received in connection
with such payment that are required to be deposited in the Collection Account
have been or will be so deposited) of a Servicing Officer and shall cause the
Servicer to request (on the form attached hereto as Exhibit C or on the
form attached to the Custodial

 

127

 

Agreement) the Trustee or the Custodian, to
deliver to the Servicer the related Mortgage File.  Upon receipt of such certification and
request, the Trustee or the Custodian (with the consent, and at the direction
of the Trustee), shall promptly release the related Mortgage File to the
Servicer or the Subservicer and the Trustee shall have no further
responsibility with regard to such Mortgage File.  Upon any such payment in full, the Master
Servicer is authorized, and the Servicer and the Subservicer, to the extent
such authority is provided for under the Servicing Agreement, is authorized, to
give, as agent for the Trustee, as the mortgagee under the Mortgage that
secured the Mortgage Loan, an instrument of satisfaction (or assignment of
mortgage without recourse) regarding the Mortgaged Property subject to the
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of such payment, it being understood and agreed that no expenses
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Collection Account.

 

(b)                                 From time to time and as
appropriate for the servicing or foreclosure of any Mortgage Loan and in
accordance with Accepted Servicing Practices and the Servicing Agreement, the
Trustee shall execute such documents as shall be prepared and furnished to the
Trustee by the Master Servicer, the Servicer or the Subservicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution
of any such proceedings.  The Trustee or
the Custodian, shall, upon request of the Master Servicer, the Servicer or the
Subservicer, and delivery to the Trustee or the Custodian, of a trust receipt
signed by a Servicing Officer substantially in the form of Exhibit C or on
the form attached to the Custodial Agreement, release the related Mortgage File
held in its possession or control to the Master Servicer (or the
Servicer).  Such trust receipt shall
obligate the Master Servicer or Servicer to return the Mortgage File to the
Trustee or the Custodian, as applicable, when the need therefor by the Master
Servicer, the Servicer or the Subservicer no longer exists unless the Mortgage
Loan shall be liquidated, in which case, upon receipt of a certificate of a
Servicing Officer similar to that hereinabove specified, the trust receipt
shall be released by the Trustee or the Custodian, as applicable, to the Master
Servicer (or the Servicer).

 

Section 9.12                                Documents, Records and Funds in
Possession of Master Servicer To Be Held for Trustee.

 

(a)                                  The Master Servicer shall
transmit, or cause the Servicer or the Subservicer to transmit, to the Trustee
such documents and instruments coming into the possession of the Master
Servicer or the Servicer from time to time as are required by the terms hereof
or of the Servicing Agreement to be delivered to the Trustee or the
Custodian.  Any funds received by the
Master Servicer, the Servicer or the Subservicer in respect of any Mortgage
Loan or which otherwise are collected by the Master Servicer, the Servicer or
the Subservicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be held for the benefit of the Trustee and the
Certificateholders subject to the Master Servicer’s right to retain or withdraw
from the Collection Account the Master Servicing Fee and other amounts provided
in this Agreement and to the right of the Servicer and the Subservicer to
retain the Servicing Fee and other amounts as provided in the Servicing
Agreement.  The Master Servicer shall,
and shall (to the extent provided, in the Servicing Agreement) cause the
Servicer or the Subservicer to, provide access to information and documentation
regarding the Mortgage Loans to the Trustee, any NIMS Insurer, their respective
agents and accountants at any time upon reasonable request

 

128

 

and during normal business hours, and to
Certificateholders that are savings and loan associations, banks or insurance
companies, the Office of Thrift Supervision, the FDIC and the supervisory
agents and examiners of such Office and Corporation or examiners of any other
federal or state banking or insurance regulatory authority if so required by
applicable regulations of the Office of Thrift Supervision or other regulatory
authority, such access to be afforded without charge but only upon reasonable
request in writing and during normal business hours at the offices of the
Master Servicer designated by it.  In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.

 

(b)                                 All Mortgage Files and funds
collected or held by, or under the control of, the Master Servicer, the
Servicer or the Subservicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds or
Insurance Proceeds, shall be held by the Master Servicer, the Servicer or the
Subservicer for and on behalf of the Trustee and the Certificateholders and
shall be and remain the sole and exclusive property of the Trustee; provided, however, that the Master Servicer, the Servicer or
the Subservicer shall be entitled to setoff against, and deduct from, any such
funds any amounts that are properly due and payable to the Master Servicer, the
Servicer or the Subservicer under this Agreement or the Servicing Agreement and
shall be authorized to remit such funds to the Trust Administrator in
accordance with this Agreement.

 

(c)                                  The Master Servicer hereby
acknowledges that concurrently with the execution of this Agreement, the Trustee
shall own or, to the extent that a court of competent jurisdiction shall deem
the conveyance of the Mortgage Loans from the Seller to the Depositor not to
constitute a sale, the Trustee shall have a security interest in the Mortgage
Loans and in all Mortgage Files representing such Mortgage Loans and in all
funds and investment property now or hereafter held by, or under the control
of, the Servicer, the Subservicer or the Master Servicer that are collected by
the Servicer, the Subservicer or the Master Servicer in connection with the
Mortgage Loans, whether as scheduled installments of principal and interest or
as full or partial prepayments of principal or interest or as Liquidation
Proceeds or Insurance Proceeds or otherwise, and in all proceeds of the
foregoing and proceeds of proceeds (but excluding any fee or other amounts to
which the Servicer is entitled under the Servicing Agreement, or the Master
Servicer or the Depositor is entitled to hereunder); and the Master Servicer
agrees that so long as the Mortgage Loans are assigned to and held by the
Trustee or any Custodian, all documents or instruments constituting part of the
Mortgage Files, and such funds relating to the Mortgage Loans which come into
the possession or custody of, or which are subject to the control of, the
Master Servicer, the Servicer or the Subservicer shall be held by the Master
Servicer, the Servicer or the Subservicer for and on behalf of the Trustee as
the Trustee’s agent and bailee for purposes of perfecting the Trustee’s security
interest therein as provided by the applicable Uniform Commercial Code or other
applicable laws.

 

(d)                                 The Master Servicer agrees that
it shall not, and shall not authorize the Servicer or the Subservicer to,
create, incur or subject any Mortgage Loans, or any funds that are deposited in
any Custodial Account, Escrow Account or the Collection Account, or any funds
that otherwise are or may become due or payable to the Trustee, to any claim,
lien, security interest, judgment, levy, writ of attachment or other
encumbrance, nor assert by legal action or otherwise any claim or right of
setoff against any Mortgage Loan or any funds collected on, or in connection
with, a Mortgage Loan.

 

129

 

Section 9.13                                Representations and Warranties
of the Master Servicer.

 

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

 

(i)                                     it
is validly existing and in good standing under the laws of the state of its
incorporation, and as Master Servicer has full power and authority to transact
any and all business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the execution,
delivery and performance of which have been duly authorized by all necessary
corporate action on the part of the Master Servicer;

 

(ii)                                  the
execution and delivery of this Agreement by the Master Servicer and its
performance and compliance with the terms of this Agreement will not (A) violate
the Master Servicer’s charter or bylaws, (B) violate any law or regulation
or any administrative decree or order to which it is subject or (C) constitute
a default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Master Servicer is a party or by
which it is bound or to which any of its assets are subject, which violation,
default or breach would materially and adversely affect the Master Servicer’s
ability to perform its obligations under this Agreement;

 

(iii)                               this
Agreement constitutes, assuming due authorization, execution and delivery
hereof by the other respective parties hereto, a legal, valid and binding
obligation of the Master Servicer, enforceable against it in accordance with
the terms hereof, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the enforcement
of creditors’ rights in general, and by general equity principles (regardless
of whether such enforcement is considered in a proceeding in equity or at law);

 

(iv)                              the
Master Servicer is not in default with respect to any order or decree of any
court or any order or regulation of any federal, state, municipal or
governmental agency to the extent that any such default would materially and
adversely affect its performance hereunder;

 

(v)                                 the
Master Servicer is not a party to or bound by any agreement or instrument or
subject to any charter provision, bylaw or any other corporate restriction or
any judgment, order, writ, injunction, decree, law or regulation that may
materially and adversely affect its ability as Master Servicer to perform its
obligations under this Agreement or that requires the consent of any third
person to the execution of this Agreement or the performance by the Master
Servicer of its obligations under this Agreement;

 

(vi)                              no
litigation is pending or, to the best of the Master Servicer’s knowledge,
threatened against the Master Servicer which would prohibit its entering into
this Agreement or performing its obligations under this Agreement;

 

130

 

(vii)                           the
Master Servicer, or an affiliate thereof the primary business of which is the
servicing of conventional residential mortgage loans, is a FNMA- or
FHLMC-approved seller/servicer;

 

(viii)                        no
consent, approval, authorization or order of any court or governmental agency
or body is required for the execution, delivery and performance by the Master
Servicer of or compliance by the Master Servicer with this Agreement or the
consummation of the transactions contemplated by this Agreement, except for
such consents, approvals, authorizations and orders (if any) as have been
obtained;

 

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

 

(x)                                   the
Master Servicer has obtained an Errors and Omissions Insurance Policy and a
Fidelity Bond in accordance with Section 9.02 each of which is in full
force and effect, and each of which provides at least such coverage as is
required hereunder; and

 

(xi)                                the
information about the Master Servicer under the heading “The Master Servicer”
in the Offering Documents relating to the Master Servicer does not include an
untrue statement of a material fact and does not omit to state a material fact,
with respect to the statements made, necessary in order to make the statements
in light of the circumstances under which they were made not misleading.

 

(b)                                 It is understood and agreed that
the representations and warranties set forth in this Section 9.13 shall
survive the execution and delivery of this Agreement.  The Master Servicer shall indemnify the
Depositor, the Trust Administrator, the Trustee and any NIMS Insurer and hold
them harmless against any loss, damages, penalties, fines, forfeitures, legal
fees and related costs, judgments, and other costs and expenses resulting from
any claim, demand, defense or assertion based on or grounded upon, or resulting
from, a breach of the Master Servicer’s representations and warranties
contained in Section 9.13(a).  It is
understood and agreed that the enforcement of the obligation of the Master
Servicer set forth in this Section to indemnify the Depositor, the
Trustee, the Trust Administrator and any NIMS Insurer as provided in this Section constitutes
the sole remedy (other than as set forth in Section 6.14) of the
Depositor, the Trustee, the Trust Administrator and any NIMS Insurer,
respecting a breach of the foregoing representations and warranties.  Such indemnification shall survive any
termination of the Master Servicer as Master Servicer hereunder, and any
termination of this Agreement.

 

Any cause of
action against the Master Servicer relating to or arising out of the breach of
any representations and warranties made in this Section shall accrue upon
discovery of such breach by either the Depositor, the Master Servicer, the
Trustee or any NIMS Insurer or notice, thereof by any one of such parties to
the other parties.  Notwithstanding
anything in this Agreement to the contrary, the Master Servicer shall not be
liable for special, indirect or consequential losses or damages of any kind
whatsoever (including, but not limited to, lost profits).

 

131

 

(c)                                  It is understood and agreed that
the representations and warranties of the Depositor set forth in Sections
2.03(a)(i) through (vi) shall survive the execution and delivery of
this Agreement.  The Depositor shall
indemnify the Master Servicer and hold each harmless against any loss, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of the Depositor’s
representations and warranties contained in Sections 2.03(a)(i) through (vi) hereof.  It is understood and agreed that the
enforcement of the obligation of the Depositor set forth in this Section to
indemnify the Master Servicer as provided in this Section constitutes the
sole remedy hereunder of the Master Servicer respecting a breach by the
Depositor of the representations and warranties in Sections 2.03(a)(i) through
(vi) hereof.

 

Any cause of
action against the Master Servicer relating to or arising out of the breach of
any representations and warranties made in this Section shall accrue upon
discovery of such breach by either the Depositor, the Master Servicer, the
Trustee or any NIMS Insurer or notice thereof by any one of such parties to the
other parties.  Notwithstanding anything
in this Agreement to the contrary, the Master Servicer shall not be liable for
special, indirect or consequential losses or damages of any kind whatsoever
(including, but not limited to, lost profits).

 

Section 9.14                                Opinion.

 

On or before
the Closing Date, the Master Servicer shall cause to be delivered to the
Depositor, the Seller, the Trustee and any NIMS Insurer one or more Opinions of
Counsel, dated the Closing Date, in form and substance reasonably satisfactory
to the Depositor and Lehman Brothers Inc., as to the due authorization,
execution and delivery of this Agreement by the Master Servicer and the
enforceability thereof.

 

Section 9.15                                Standard Hazard and Flood
Insurance Policies.

 

For each
Mortgage Loan other than a Cooperative Loan, the Master Servicer shall
maintain, or cause to be maintained by the Servicer, standard fire and casualty
insurance and, where applicable, flood insurance, all in accordance with the
provisions of this Agreement and the Servicing Agreement, as applicable.  It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set forth
in the Servicing Agreement and that no earthquake or other additional insurance
is to be required of any Mortgagor or to be maintained on property acquired in
respect of a defaulted loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance.

 

Pursuant to Section 4.01,
any amounts collected by the Master Servicer, or by the Servicer, under any
insurance policies maintained pursuant to this Section 9.16 or the
Servicing Agreement (other than amounts to be applied to the restoration or
repair of the property subject to the related Mortgage or released to the
Mortgagor in accordance with the Servicing Agreement) shall be deposited into
the Collection Account, subject to withdrawal pursuant to Section 4.02.  Any cost incurred by the Master Servicer or
the Servicer in maintaining any such insurance if the Mortgagor defaults in its
obligation to do so shall be added to the amount owing

 

132

 

under the Mortgage Loan where
the terms of the Mortgage Loan so permit; provided, however,
that the addition of any such cost shall not be taken into account for purposes
of calculating the distributions to be made to Certificateholders and shall be
recoverable by the Master Servicer, the Servicer or the Subservicer pursuant to
Section 4.02.

 

Section 9.16                                Presentment of Claims and
Collection of Proceeds.

 

The Master
Servicer shall cause the Servicer or the Subservicer (to the extent provided in
the Servicing Agreement) to, prepare and present on behalf of the Trustee and
the Certificateholders all claims under the Insurance Policies with respect to
the Mortgage Loans, and take such actions (including the negotiation,
settlement, compromise or enforcement of the insured’s claim) as shall be
necessary to realize recovery under such policies.  Any proceeds disbursed to the Master Servicer
(or disbursed to the Servicer or the Subservicer and remitted to the Master
Servicer) in respect of such policies or bonds shall be promptly deposited in
the Collection Account or the Custodial Account upon receipt, except that any
amounts realized that are to be applied to the repair or restoration of the
related Mortgaged Property as a condition requisite to the presentation of
claims on the related Mortgage Loan to the insurer under any applicable
Insurance Policy need not be so deposited (or remitted).

 

Section 9.17                                [Reserved].

 

Section 9.18                                Trustee To Retain Possession of
Certain Insurance Policies and Documents.

 

The Trustee
(or the Custodian on behalf of the Trustee) shall retain possession and custody
of the originals of the Primary Mortgage Insurance Policies or certificate of
insurance if applicable and any certificates of renewal as to the foregoing as
may be issued from time to time as contemplated by this Agreement.  Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer
otherwise has fulfilled its obligations under this Agreement, the Trustee (or
the Custodian) shall also retain possession and custody of each Mortgage File
in accordance with and subject to the terms and conditions of this
Agreement.  The Master Servicer shall
promptly deliver or cause the Servicer to deliver to the Trustee (or the
Custodian), upon the execution or receipt thereof the originals of the Primary
Mortgage Insurance Policies and any certificates of renewal thereof, and such
other documents or instruments that constitute portions of the Mortgage File
that come into the possession of the Master Servicer or the Servicer from time
to time.

 

Section 9.19                                [Reserved]

 

Section 9.20                                Compensation to the Master
Servicer.

 

The Master
Servicer shall be entitled to be paid from funds in the Collection Account,
subject to Section 5.05, the Master Servicing Fee to the extent permitted
by Section 4.02.  Servicing
compensation in the form of assumption fees, if any, late payment charges, as
collected, if any, or otherwise (but not including any Prepayment Premium)
shall be for the benefit of the Master Servicer (or the Servicer) and shall not
be deposited in the Collection Account. 
The Master Servicer shall be entitled to direct the Trust Administrator
to pay the Master Servicing Fee to such Master Servicer by withdrawal from the
Collection Account to the

 

133

 

extent that payments have been
received with respect to the applicable Mortgage Loan.  The Master Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder and
shall not be entitled to reimbursement therefor except as provided in this
Agreement.  Pursuant to Section 4.01(e),
all income and gain realized from any investment of funds in the Collection
Account shall be for the benefit of the Master Servicer as compensation.  The provisions of this Section 9.20 are
subject to the provisions of Section 6.14.

 

Section 9.21                                REO Property.

 

(a)                                  In the event the Trust Fund
acquires ownership of any REO Property in respect of any Mortgage Loan, the
deed or certificate of sale shall be issued to the Trustee, or to its nominee,
on behalf of the Certificateholders.  The
Master Servicer shall use its reasonable best efforts to sell, or cause the
Servicer, to the extent provided in the Servicing Agreement any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the Servicing Agreement, as applicable, but in all events within
the time period, and subject to the conditions set forth in Article X
hereof.  Pursuant to its efforts to sell
such REO Property, the Master Servicer shall protect and conserve, or cause the
Servicer to protect and conserve, such REO Property in the manner and to such
extent required by the Servicing Agreement, subject to Article X hereof.

 

(b)                                 The Master Servicer shall
deposit or cause to be deposited all funds collected and received by it, or
recovered from the Servicer or the Subservicer, in connection with the
operation of any REO Property in the Collection Account.

 

(c)                                  The Master Servicer, the
Servicer and the Subservicer, upon the final disposition of any REO Property,
shall be entitled to reimbursement for any related unreimbursed Advances and
other unreimbursed advances as well as any unpaid Master Servicing Fees or
Servicing Fees from Liquidation Proceeds received in connection with the final
disposition of such REO Property; provided,
that (without limitation of any other right of reimbursement that
the Master Servicer, the Servicer or the Subservicer shall have hereunder) any
such unreimbursed Advances as well as any unpaid Net Master Servicing Fees or
Servicing Fees may be reimbursed or paid, as the case maybe, prior to final
disposition, out of any net rental income or other net amounts derived from
such REO Property.

 

(d)                                 The Liquidation Proceeds from
the final disposition of the REO Property, net of any payment to the Master
Servicer and the Servicer as provided above, shall be deposited in the
Collection Account on or prior to the Determination Date in the month following
receipt thereof and be remitted by wire transfer in immediately available funds
to the Trust Administrator for deposit into the Collection Account on the next
succeeding Deposit Date.

 

Section 9.22                                [Reserved].

 

Section 9.23                                Reports to the Trustee.

 

(a)                                  Not later than 30 days after
each Distribution Date, the Trust Administrator shall, upon request, forward to
the Trustee a statement, deemed to have been certified by a Responsible
Officer, setting forth the status of the Collection Account maintained by the
Trust Administrator as of the close of business on the related Distribution
Date, indicating that all distributions

 

134

 

required by this Agreement have been made (or
if any required distribution has not been made by the Trust Administrator,
specifying the nature and status thereof) and showing, for the period covered
by such statement, the aggregate of deposits into and withdrawals from the
Collection Account.  Copies of such
statement shall be provided by the Trust Administrator, upon request, to the
Depositor, Attention: Contract Finance, any NIMS Insurer and any
Certificateholders (or by the Trustee at the Trust Administrator’s expense if
the Trust Administrator shall fail to provide such copies to the
Certificateholders (unless (i) the Trust Administrator shall have failed
to provide the Trustee with such statement or (ii) the Trustee shall be
unaware of the Trust Administrator’s failure to provide such statement)).

 

(b)                                 Not later than two Business Days
following each Distribution Date, the Trust Administrator shall deliver to one
Person designated by the Depositor, in a format consistent with other
electronic loan level reporting supplied by the Trust Administrator in
connection with similar transactions, “loan level” information with respect to
the Mortgage Loans as of the related Determination Date, to the extent that
such information has been provided to the Trust Administrator by the Master
Servicer or by the Depositor.

 

(c)                                  All information, reports and
statements prepared by the Master Servicer under this Agreement shall be based
on information supplied to the Master Servicer by the Servicer or the
Subservicer without independent verification thereof and the Master Servicer
shall be entitled to rely, on such information.

 

Section 9.24                                Annual Officer’s Certificate as
to Compliance.

 

(a)                                  The Master Servicer shall
deliver to the Trust Administrator and any NIMS Insurer on the 15th of March of
each calendar year, commencing in March 2006, an Officer’s Certificate,
certifying that with respect to the period ending on the immediately preceding December 31:
(i) such Servicing Officer has reviewed the activities of such Master
Servicer during the preceding calendar year or portion thereof and its
performance under this Agreement, (ii) to the best of such Servicing
Officer’s knowledge, based on such review, such Master Servicer has performed
and fulfilled its duties, responsibilities and obligations under this Agreement
in all material respects throughout such year, or, if there has been a default
in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that the Servicer has failed
to perform any of its duties, responsibilities and obligations under its
Servicing Agreement in all material respects throughout such year, or, if there
has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof, and (iv) the
Master Servicer has received from the Servicer an annual certificate of
compliance and a copy of the Servicer’s annual audit report, in each case to
the extent required under the Servicing Agreement, or, if any such certificate
or report has not been received by the Master Servicer, the Master Servicer is
using its best reasonable efforts to obtain such certificate or report.

 

(b)                                 Copies of such statements shall
be provided to any Certificateholder upon request, by the Master Servicer or by
the Trustee at the Master Servicer’s expense if the Master Servicer failed to
provide such copies (unless (i) the Master Servicer shall have failed to
provide the

 

135

 

Trustee with such statement or (ii) the
Trustee shall be unaware of the Master Servicer’s failure to provide such
statement).

 

Section 9.25                                Annual Independent Accountants’
Servicing Report.

 

If the Master
Servicer (or any of its Affiliates) has, during the course of any fiscal year,
directly serviced, as a successor Servicer, any of the Mortgage Loans, then the
Master Servicer at its expense shall cause a nationally recognized firm of
independent certified public accountants to furnish a statement to the Trust
Administrator, any NIMS Insurer and the Depositor no later than five Business
Days after the fifteenth of March of each calendar year, commencing in March 2006
to the effect that, with respect to the most recently ended calendar year, such
firm has examined certain records and documents relating to the Master Servicer’s
performance of its servicing obligations under this Agreement and pooling and
servicing and trust agreements in material respects similar to this Agreement
and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
FHLMC or the Uniform Single Attestation Program for Mortgage Bankers, such firm
is of the opinion that the Master Servicer’s activities have been conducted in
compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such
firm believes to be immaterial, (ii) such other exceptions as are set
forth in such statement and (iii) such exceptions that the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
Serviced by FHLMC requires it to report. 
Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Trustee at the expense of the Master
Servicer if the Master Servicer shall fail to provide such copies.  If such report discloses exceptions that are
material, the Master Servicer shall advise the Trustee whether such exceptions
have been or are susceptible of cure, and will take prompt action to do so.

 

Section 9.26                                Merger or Consolidation.

 

Any Person
into which the Master Servicer may be merged or consolidated, or any Person
resulting from any merger, conversion, other change in form or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor to the Master Servicer
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the
successor or resulting Person to the Master Servicer shall be a Person that
shall be qualified and approved to service mortgage loans for FNMA or FHLMC and
shall have a net worth of not less than $15,000,000.

 

Section 9.27                                Resignation of Master Servicer.

 

Except as
otherwise provided in Sections 9.26 and 9.28 hereof, the Master Servicer shall
not resign from the obligations and duties hereby imposed on it unless it
determines that the Master Servicer’s duties hereunder are no longer
permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it and cannot be
cured.  Any such determination permitting
the resignation of the Master Servicer shall be evidenced by an Opinion of
Counsel that shall be Independent to such effect delivered to the Trustee and
any NIMS Insurer.  No such resignation
shall become effective until the Trust

 

136

 

Administrator shall have
assumed, or a successor master servicer acceptable to any NIMS Insurer and the
Trust Administrator shall have been appointed by the Trustee and until such
successor shall have assumed, the Master Servicer’s responsibilities and obligations
under this Agreement.  Notice of such
resignation shall be given promptly by the Master Servicer and the Depositor to
the Trustee, the Trust Administrator and any NIMS Insurer.

 

Section 9.28                                Assignment or Delegation of
Duties by the Master Servicer.

 

Except as
expressly provided herein, the Master Servicer shall not assign or transfer any
of its rights, benefits or privileges hereunder to any other Person, or
delegate to or subcontract with, or authorize or appoint any other Person to
perform any of the duties, covenants or obligations to be performed by the
Master Servicer hereunder; provided, however,
that the Master Servicer shall have the right without the prior written consent
of the Trustee, any NIMS Insurer or the Depositor to delegate or assign to or
subcontract with or authorize or appoint an Affiliate of the Master Servicer to
perform and carry out any duties, covenants or obligations to be performed and
carried out by the Master Servicer hereunder. 
In no case, however, shall any such delegation, subcontracting or
assignment to an Affiliate of the Master Servicer relieve the Master Servicer
of any liability hereunder.  Notice of
such permitted assignment shall be given promptly by the Master Servicer to the
Depositor, the Trustee, the Trust Administrator and any NIMS Insurer.  If, pursuant to any provision hereof, the
duties of the Master Servicer are transferred to a successor master servicer,
the entire amount of the Master Servicing Fees and other compensation payable
to the Master Servicer pursuant hereto, including amounts payable to or
permitted to be retained or withdrawn by the Master Servicer pursuant to Section 9.21
hereof, shall thereafter be payable to such successor master servicer.

 

Section 9.29                                Limitation on Liability of the
Master Servicer and Others.

 

(a)                                  The Master Servicer undertakes
to perform such duties and only such duties as are specifically set forth in
this Agreement.

 

(b)                                 No provision of this Agreement
shall be construed to relieve the Master Servicer from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct; provided, however, that the duties and
obligations of the Master Servicer shall be determined solely by the express
provisions of this Agreement, the Master Servicer shall not be liable except
for the performance of such duties and obligations as are specifically set
forth in this Agreement; no implied covenants or obligations shall be read into
this Agreement against the Master Servicer and, in absence of bad faith on the
part of the Master Servicer, the Master Servicer may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Master Servicer and
conforming to the requirements of this Agreement.

 

(c)                                  Neither the Master Servicer nor
any of the directors, officers, employees or agents of the Master Servicer
shall be under any liability to the Trustee or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Master Servicer
or any such person against any liability that would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence in its performance of
its duties or by

 

137

 

reason of reckless disregard for its
obligations and duties under this Agreement. 
The Master Servicer and any director, officer, employee or agent of the
Master Servicer shall be entitled to indemnification by the Trust Fund and will
be held harmless against any loss, liability or expense incurred in connection
with any legal action relating to this Agreement or the Certificates other than
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of his or its duties hereunder or by
reason of reckless disregard of his or its obligations and duties hereunder.  The Master Servicer and any director,
officer, employee or agent of the Master Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. 
The Master Servicer shall be under no obligation to appear in, prosecute
or defend any legal action that is not incidental to its duties to master
service the Mortgage Loans in accordance with this Agreement and that in its
opinion may involve it in any expenses or liability; provided,
however, that the Master Servicer may in its sole discretion
undertake any such action that it may deem necessary or desirable in respect to
this Agreement and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. 
In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund and the Master Servicer shall be entitled to be reimbursed therefor
out of the Collection Account it maintains as provided by Section 4.02.

 

The Master
Servicer shall not be liable for any acts or omissions of the Servicer.  In particular, the Master Servicer shall not
be liable for any course of action taken by the Servicer with respect to loss
mitigation of defaulted Mortgage Loans.

 

Section 9.30                                Indemnification; Third-Party
Claims.

 

The Master
Servicer agrees to indemnify the Depositor, the Trustee, the Trust
Administrator and any NIMS Insurer, and hold them harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liability, fees and expenses that the
Depositor, the Trustee, the Trust Administrator or any NIMS Insurer may sustain
as a result of the failure of the Master Servicer to perform its duties and
master service the Mortgage Loans in compliance with the terms of this
Agreement.  The Depositor, the Trustee,
the Trust Administrator and any NIMS Insurer shall immediately notify the
Master Servicer if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans entitling the Depositor, the Trustee or any
NIMS Insurer to indemnification hereunder, whereupon the Master Servicer shall
assume the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or them in respect of such
claim.

 

Section 9.31                                Special Servicing of Delinquent
Mortgage Loans.

 

If permitted
under the terms of the Servicing Agreement, the Seller may appoint, pursuant to
the terms of the Servicing Agreement and with the written consent of the
Depositor, the Master Servicer, the Trustee, the Trust Administrator and any
NIMS Insurer, a Special Servicer to special service any Distressed Mortgage
Loans.  Any applicable Termination Fee
related to the termination of the related Servicer and the appointment of any
Special Servicer shall be paid by the Seller. 
Any fees paid to any such Special Servicer shall not exceed the
Servicing Fee Rate.

 

138

 

Section 9.32                                Alternative Index.

 

In the event
that the Index for any Mortgage Loan, as specified in the related Mortgage
Note, becomes unavailable for any reason, the Master Servicer shall select an
alternative index, which in all cases shall be an index that constitutes a
qualified rate on a regular interest under the REMIC Provisions, in accordance
with the terms of such Mortgage Note or, if such Mortgage Note does not make
provision for the selection of an alternative index in such event, the Master
Servicer shall, subject to applicable law, select an alternative index based on
information comparable to that used in connection with the original Index and,
in either case, such alternative index shall thereafter be the Index for such
Mortgage Loan.

 

Section 9.33                                [Reserved].

 

Section 9.34                                [Reserved].

 

Section 9.35                                [Reserved].

 

ARTICLE X

REMIC ADMINISTRATION

 

Section 10.01                          REMIC Administration.

 

(a)                                  REMIC elections as set forth in
the Preliminary Statement shall be made on Forms 1066 or other appropriate
federal tax or information return for the taxable year ending on the last day
of the calendar year in which the Certificates are issued.  The regular interests and residual interest
in each REMIC shall be as designated in the Preliminary Statement.

 

(b)                                 The Closing Date is hereby
designated as the “Startup Day” of each REMIC within the meaning of section 860G(a)(9) of
the Code.  The latest possible maturity
date for purposes of Treasury Regulation 1.860G-l(a)(4) will be the Latest
Possible Maturity Date.

 

(c)                                  The Trust Administrator shall
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto.  The Trust Administrator shall
pay any and all tax related expenses (not including taxes) of each REMIC,
including but not limited to any professional fees or expenses related to
audits or any administrative or judicial proceedings with respect to such REMIC
that involve the Internal Revenue Service or state tax authorities, but only to
the extent that (i) such expenses are ordinary or routine expenses,
including expenses of a routine audit but not expenses of litigation (except as
described in (ii)); or (ii) such expenses or liabilities (including taxes
and penalties) are attributable to the negligence or willful misconduct of the
Trust Administrator in fulfilling its duties hereunder (including its duties as
tax return preparer).  The Trust
Administrator shall be entitled to reimbursement of expenses to the extent
provided in clause (i) above from the Trust Administration Account, provided, however, the Trust Administrator shall not be
entitled to reimbursement for expenses incurred in connection with the
preparation of tax returns and other reports as required by Section 6.20
and this Section.

 

139

 

(d)                                 The Trust Administrator shall
prepare, and the Trustee shall sign and file, as instructed by the Trust
Administrator, all of each REMIC’s federal and appropriate state tax and
information returns as such REMIC’s direct representative.  The expenses of preparing and filing such
returns shall be borne by the Trust Administrator.

 

(e)                                  The Trust Administrator or its
designee shall perform on behalf of each REMIC all reporting and other tax
compliance duties that are the responsibility of such REMIC under the Code, the
REMIC Provisions, or other compliance guidance issued by the Internal Revenue
Service or any state or local taxing authority. 
Among its other duties, if required by the Code, the REMIC Provisions,
or other such guidance, the Trust Administrator shall provide (i) upon
receipt of reasonable compensation from the Trust (not to exceed $5,000 per
year), to the Treasury or other governmental authority such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any disqualified person or organization pursuant to Treasury
Regulation I.860E-2(a)(5) and any person designated in Section 860E(e)(3) of
the Code and (ii) to the Trustee such information as is necessary for the
Trustee to provide to the Certificateholders such information or reports as are
required by the Code or REMIC Provisions.

 

(f)                                    The Trustee, the Trust
Administrator, the Master Servicer and the Holders of Certificates shall take
any action or cause any REMIC to take any action necessary to create or
maintain the status of any REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status.  Neither the Trustee, the Trust Administrator,
the Master Servicer nor the Holder of any Residual Certificate shall knowingly
take any action, cause any REMIC to take any action or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could result in an Adverse REMIC Event unless the
Trustee, the Trust Administrator, any NIMS Insurer and the Master Servicer have
received an Opinion of Counsel addressed to the Trustee (at the expense of the
party seeking to take such action) to the effect that the contemplated action
will not result in an Adverse REMIC Event. 
In addition, prior to taking any action with respect to any REMIC or the
assets therein, or causing any REMIC to take any action, which is not expressly
permitted under the terms of this Agreement, any Holder of a Residual
Certificate will consult with the Trustee, the Trust Administrator, the Master
Servicer, any NIMS Insurer or their respective designees, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to any REMIC, and no such Person shall take any such action or cause
any REMIC to take any such action as to which the Trustee, the Trust
Administrator, the Master Servicer or any NIMS Insurer has advised it in
writing that an Adverse REMIC Event could occur.

 

(g)                                 Each Holder of a Residual
Certificate shall pay when due any and all taxes imposed on the related REMIC
by federal or state governmental authorities. 
To the extent that such taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in any such REMIC or, if no such amounts are available, out of
other amounts held in the Collection Account, and shall reduce amounts
otherwise payable to holders of regular interests in any such REMIC, as the
case may be.

 

140

 

(h)                                 The Trust Administrator shall,
for federal income tax purposes, maintain books and records with respect to
each REMIC on a calendar year and on an accrual basis.

 

(i)                                     No additional contributions of
assets shall be made to any REMIC, except as expressly provided in this
Agreement.

 

(j)                                     Neither the Trust Administrator
nor the Master Servicer shall enter into any arrangement by which any REMIC
will receive a fee or other compensation for services;

 

(k)                                  On or before September 15
of each calendar year beginning in 2005, the Trust Administrator shall deliver
to the Trustee and any NIMS Insurer an Officer’s Certificate stating, without
regard to any actions taken by any party other than the Trust Administrator,
the Trust Administrator’s compliance with provisions of this Section 10.01.

 

(l)                                     The Basis Risk Reserve Fund
shall be treated as an outside reserve fund within the meaning of Treasury
Regulation Section l.860G-2(h) that is owned by the Holder of the Class X
Certificate and that is not an asset of any REMIC, and all amounts deposited
into the Basis Risk Reserve Fund shall be treated as amounts distributed to the
Class X Certificateholder.  The
rights of the holders of LIBOR Certificates to receive payments from the Basis
Risk Reserve Fund shall be treated as rights in an interest rate cap contract
written by the holder of the Class X Certificate in favor of the holders
of the LIBOR Certificates.  Thus, each
LIBOR Certificate shall be treated as representing not only ownership of
regular interests in REMIC 4, but also ownership of an interest in an interest
rate cap contract.  For tax purposes, the
interest rate cap contract shall be deemed to have a value of $[          ].

 

(m)                               In addition, for purposes of the
REMIC Provisions, with respect to any REMIC Capped Distribution Date: (i) the
Certificate Interest Rate for each Class of Certificates, other than the Class R
Certificates, shall be the REMIC Capped Rate; and (ii) any amounts distributed
on such Certificates on such REMIC Capped Distribution Date in excess of the
REMIC Capped Rate shall be deemed to have been paid by the Class X
Certificateholder pursuant to a notional principal contract.  For tax purposes, the notional principal contract
shall be deemed to have a nominal value.

 

Section 10.02                          Prohibited Transactions and
Activities.

 

Neither the
Depositor, the Master Servicer nor the Trustee shall sell, dispose of, or
substitute for any of the Mortgage Loans, except in a disposition pursuant to (i) the
foreclosure of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of each REMIC pursuant to Article VII of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a
repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor
acquire any assets for any REMIC, nor sell or dispose of any investments in the
Collection Account for gain, nor accept any contributions to any REMIC after
the Closing Date, unless the Trustee and any NIMS Insurer has received an
Opinion of Counsel addressed to the Trustee (at the expense of the party
causing such sale, disposition, or substitution) that such disposition,
acquisition, substitution, or acceptance will not (a) result in an Adverse
REMIC Event, (b) affect the distribution of interest or principal on the
Certificates or (c) result in the encumbrance of the

 

141

 

assets transferred or assigned
to the Trust Fund (except pursuant to the provisions of this Agreement).

 

Section 10.03                          Indemnification with Respect to
Certain Taxes and Loss of REMIC Status.

 

Upon the
occurrence of an Adverse REMIC Event due to the negligent performance by the
Trustee or the Trust Administrator, as applicable, of its duties and
obligations set forth herein, the Trustee or the Trust Administrator, as
applicable, shall indemnify any NIMS Insurer, the Holder of the related
Residual Certificate or the Trust Fund, as applicable, against any and all
losses, claims, damages, liabilities or expenses (“Losses”) resulting from such
negligence; provided, however, that neither the
Trustee nor the Trust Administrator shall be liable for any such Losses
attributable to the action or inaction of the Master Servicer, the Depositor, the
Class X Certificateholder, the Holder of such Residual Certificate or the
Trust Administrator (with regard to the Trustee), as applicable, nor for any
such Losses resulting from misinformation provided by the Holder of such
Residual Certificate on which the Trust Administrator has relied.  The foregoing shall not be deemed to limit or
restrict the rights and remedies of the Holder of such Residual Certificate now
or hereafter existing at law or in equity. 
Notwithstanding the foregoing, however, in no event shall the Trustee or
the Trust Administrator, as applicable, have any liability (1) for any
action or omission that is taken in accordance with and in compliance with the
express terms of, or which is expressly permitted by the terms of, this
Agreement or the Servicing Agreement, (2) for any Losses other than
arising out of a negligent performance by the Trustee or the Trust
Administrator, as applicable, of its duties and obligations set forth herein,
and (3) for any special or consequential damages to Certificateholders (in
addition to payment of principal and interest on the Certificates).  In addition, neither the Trustee nor the
Trust Administrator shall have any liability for the actions or failure to act
of the other.

 

Section 10.04                          REO Property.

 

(a)                                  Notwithstanding any other
provision of this Agreement, the Master Servicer, acting on behalf of the
Trustee hereunder, shall not, except to the extent provided in the Servicing
Agreement, knowingly permit the Servicer to, rent, lease, or otherwise earn
income on behalf of any REMIC with respect to any REO Property which might
cause an Adverse REMIC Event unless the Master Servicer has advised, or has
caused the applicable Servicer to advise, the Trustee and any NIMS Insurer in
writing to the effect that, under the REMIC Provisions, such action would not
result in an Adverse REMIC Event.

 

(b)                                 The Master Servicer shall cause
the applicable Servicer (to the extent provided in its Servicing Agreement) to
make reasonable efforts to sell any REO Property for its fair market
value.  In any event, however, the Master
Servicer shall cause the Servicer or Subservicer (to the extent provided in its
Servicing Agreement) to, dispose of any REO Property within three years of its acquisition
by the Trust Fund unless the Servicer or Subservicer has received a grant of
extension from the Internal Revenue Service to the effect that, under the REMIC
Provisions, the REMIC may hold REO Property for a longer period without causing
an Adverse REMIC Event.  If the Servicer
or Subservicer has received such an extension, then the Master Servicer shall
cause the Servicer or Subservicer to continue to attempt to sell the REO
Property for its fair market value for such period longer than three years as
such extension permits (the “Extended Period”). 
If the Servicer or Subservicer has not received such an extension and is
unable to sell

 

142

 

the REO Property within 33 months after its
acquisition by the Trust Fund or if the Servicer or Subservicer has received
such an extension, and the Servicer or Subservicer is unable to sell the REO
Property within the period ending three months before the close of the Extended
Period, the Master Servicer shall cause the Servicer, before the end of the three
year period or the Extended Period, as applicable, to (i) purchase such
REO Property at a price equal to the REO Property’s fair market value or (ii) auction
the REO Property to the highest bidder (which may be the Servicer or
Subservicer) in an auction reasonably designed to produce a fair price prior to
the expiration of the three-year period or the Extended Period, as the case may
be.

 

ARTICLE XI

 

MISCELLANEOUS PROVISIONS

 

Section 11.01                          Binding Nature of Agreement;
Assignment.

 

This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

 

Section 11.02                          Entire Agreement.

 

This Agreement
contains the entire agreement and understanding among the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter hereof.  The express terms
hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.

 

Section 11.03                          Amendment.

 

(a)                                  This Agreement may be amended
from time to time by the Depositor, the Master Servicer, the Trust Administrator
and the Trustee, with the consent of any NIMS Insurer, (i) to cure any
ambiguity, (ii) to cause the provisions herein to conform to or be
consistent with or in furtherance of the statements made with respect to the
Certificates, the Trust Fund or this Agreement in any Offering Document, or to
correct or supplement any provision herein which may be inconsistent with any
other provisions herein or with the provisions of the Servicing Agreement, (iii) to
make any other provisions with respect to matters or questions arising under
this Agreement or (iv) to add, delete, or amend any provisions to the
extent necessary or desirable to comply with any requirements imposed by the
Code and the REMIC Provisions.  No such
amendment effected pursuant to the preceding sentence shall, as evidenced by an
Opinion of Counsel, result in an Adverse REMIC Event, nor shall such amendment
effected pursuant to clause (iii) of such sentence adversely affect in any
material respect the interests of any Holder. 
Prior to entering into any amendment without the consent of Holders
pursuant to this paragraph, the Trustee and any NIMS Insurer shall be provided
with an Opinion of Counsel addressed to the Trustee and any NIMS Insurer (at
the expense of the party requesting such amendment) to the effect that such
amendment is permitted under this Section. 
Any such amendment shall be deemed not to adversely affect in any
material respect any Holder, if the Trustee receives written

 

143

 

confirmation from each Rating Agency that
such amendment will not cause such Rating Agency to reduce the then current
rating assigned to the Certificates.

 

(b)                                 This Agreement may also be
amended from time to time by the Depositor, the Master Servicer, the Trust
Administrator and the Trustee, with the consent of any NIMS Insurer, and with
the consent of the Holders of not less than 66-2/3% of the Class Principal
Amount (or Percentage Interest) of each Class of Certificates affected
thereby 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 the Holders; provided, however,
that no such amendment shall be made unless the Trustee and any NIMS Insurer
receives an Opinion of Counsel addressed to the Trustee and the NIMS Insurer,
at the expense of the party requesting the change, that such change will not
cause an Adverse REMIC Event; and provided further, that no such amendment may (i) reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate, without
the consent of the Holder of such Certificate or (ii) reduce the aforesaid
percentages of Class Principal Amount or Class Notional Amount (or
Percentage Interest) of Certificates of each Class, the Holders of which are
required to consent to any such amendment without the consent of the Holders of
100% of the Class Principal Amount or Class Notional Amount (or Percentage
Interest) of each Class of Certificates affected thereby.  For purposes of this paragraph, references to
“Holder” or “Holders” shall be deemed to include, in the case of any Class of
Book-Entry Certificates, the related Certificate Owners.

 

(c)                                  Promptly after the execution of
any such amendment, the Trustee shall furnish written notification of the
substance of such amendment to each Holder, the Depositor, any NIMS Insurer and
to the Rating Agencies.

 

(d)                                 It shall not be necessary for
the consent of Holders under this Section 11.03 to approve the particular
form of any proposed amendment, but it shall be sufficient if such consent
shall approve the substance thereof.  The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.

 

(e)                                  Notwithstanding anything to the
contrary in the Servicing Agreement, the Trustee shall not consent to any
amendment of the Servicing Agreement except pursuant to the standards provided
in this Section with respect to amendment of this Agreement.

 

Section 11.04                          Voting Rights.

 

Except to the
extent that the consent of all affected Certificateholders is required pursuant
to this Agreement, with respect to any provision of this Agreement requiring
the consent of Certificateholders representing specified percentages of
aggregate outstanding Certificate Principal Amount or Class Notional
Amount (or Percentage Interest), Certificates owned by the Depositor, the
Master Servicer, the Trust Administrator, the Trustee, the Servicer or
Affiliates thereof are not to be counted so long as such Certificates are owned
by the Depositor, the Master Servicer, the Trust Administrator, the Trustee,
the Servicer or any Affiliate thereof.

 

144

 

Section 11.05                          Provision
of Information.

 

(a)                                  For so
long as any of the Certificates of any Series or Class are “restricted
securities” within the meaning of Rule 144(a)(3) under the Act, each of
the Depositor, the Master Servicer and the Trust Administrator agree to
cooperate with each other to provide to any Certificateholders, any NIM
Security holder and to any prospective purchaser of Certificates designated by
such holder, upon the request of such holder or prospective purchaser, any
information required to be provided to such holder or prospective purchaser to
satisfy the condition set forth in Rule l44A(d)(4) under the Act.  Any reasonable, out-of-pocket expenses
incurred by the Trustee or the Trust Administrator in providing such
information shall be reimbursed by the Depositor.

 

(b)                                 The
Trust Administrator shall provide to any person to whom a Prospectus was
delivered, upon the request of such person specifying the document or documents
requested, (i) a copy (excluding exhibits) of any report on Form 8-K or Form
10-K filed with the Securities and Exchange Commission pursuant to Section
6.20(c) and (ii) a copy of any other document incorporated by reference in the
Prospectus.  Any reasonable out-of-pocket
expenses incurred by the Trust Administrator in providing copies of such
documents shall be reimbursed by the Depositor.

 

(c)                                  On
each Distribution Date, the Trust Administrator shall deliver or cause to be
delivered by first class mail or make available on its website to the
Depositor, Attention:  Contract Finance,
a copy of the report delivered to Certificateholders pursuant to Section 4.03.

 

Section 11.06                          Governing
Law.

 

THIS AGREEMENT 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 11.07                          Notices.

 

All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given when received by (a) in the case of
the Depositor, Fieldstone Mortgage Investment Corporation, 11000 Broken Land
Parkway, Suite 600, Columbia, Maryland 21044, (b) in the case of the Seller,
Fieldstone Mortgage Company, 11000 Broken Land Parkway, Suite 600, Columbia,
Maryland 21044, Attention: Fieldstone Mortgage Investment Trust 2005-[   ],
(c) in the case of the Trustee, the Corporate Trust Office, (d) in the case of
the Master Servicer and the Trust Administrator, [                          ],
Attention: Fieldstone Mortgage Investment Trust 2005-[   ],
telecopy number [                    ],
(or, in the case of the Trust Administrator, its Corporate Trust Office, as
applicable) or, as to each party such other address as may hereafter be
furnished by such party to the other parties in writing.  All demands, notices and communications to a
party hereunder shall be in writing and shall be deemed to have been duly given
when delivered to such party at the relevant address, facsimile number or
electronic

 

145

 

mail address set forth above or at such other
address, facsimile number or electronic mail address as such party may designate
from time to time by written notice in accordance with this Section 11.07.

 

Section 11.08                          Severability
of Provisions.

 

If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.

 

Section 11.09                          Indulgences;
No Waivers.

 

Neither the failure nor any delay on the part of a party to exercise
any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of any
other right, remedy, power or privilege, nor shall any waiver of any right,
remedy, power or privilege with respect to any occurrence be construed as a
waiver of such right, remedy, power or privilege with respect to any other
occurrence.  No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted
such waiver.

 

Section 11.10                          Headings
Not To Affect Interpretation.

 

The headings contained in this Agreement are for convenience of
reference only, and they shall not be used in the interpretation hereof.

 

Section 11.11                          Benefits
of Agreement.

 

The Depositor shall promptly notify each Custodian and the Trustee in
writing of the issuance of any Class of NIMS Securities issued by a NIMS
Insurer and the identity of such NIMS Insurer. 
Thereafter, the NIMS Insurer shall be deemed a third-party beneficiary
of this Agreement to the same extent as if it were a party hereto, and shall
have the right to enforce the provisions of this Agreement so long as the NIMS
Securities remaining outstanding or the NIMS Insurer is owed amounts in respect
of its guarantee of payment of such NIMS Securities.  Nothing in this Agreement or in the
Certificates, express or implied, shall give to any Person, other than the
parties to this Agreement and their successors hereunder, the Holders of the
Certificates and the NIMS Insurer, any benefit or any legal or equitable right,
power, remedy or claim under this Agreement, except to the extent specified in
Section 11.15.

 

Section 11.12                          Special
Notices to the Rating Agencies and any NIMS Insurer.

 

(a)                                  The
Depositor shall give prompt notice to the Rating Agencies and any NIMS Insurer
of the occurrence of any of the following events of which it has notice:

 

(i)                                     any amendment to this Agreement pursuant to
Section 11.03;

 

146

 

(ii)                                  any Assignment by the Master Servicer of its
rights hereunder or delegation of its duties hereunder;

 

(iii)                               the occurrence of any Event of Default
described in Section 6.14;

 

(iv)                              any notice of termination given to the Master
Servicer pursuant to Section 6.14 and any resignation of the Master Servicer
hereunder;

 

(v)                                 the appointment of any successor to any
Master Servicer pursuant to Section 6.14;

 

(vi)                              the making of a final payment pursuant to
Section 7.02; and

 

(vii)                           any termination of the rights and obligations
of the Servicer under the Servicing Agreement.

 

(b)                                 All
notices to the Rating Agencies provided for this Section shall be in writing
and sent by first class mail, telecopy or overnight courier, as follows:

 

If to Moody’s, to:

 

Moody’s Investors Services,
Inc.

99 Church Street

New York, New York 10007

Attention:  Residential Mortgages

 

If to S&P, to:

Standard & Poor’s
Ratings Services

55 Water Street

New York, New York

Attention:  Residential Mortgages

 

If to Fitch, to:

Fitch, Inc.

One State Street Plaza

New York, New York 10004

Attention:  Residential Mortgages

 

(c)                                  The
Trust Administrator shall provide or make available to the Rating Agencies
reports prepared pursuant to Section 4.03. 
In addition, the Trust Administrator shall, at the expense of the Trust
Fund, make available to each Rating Agency such information as such Rating
Agency may reasonably request regarding the Certificates or the Trust Fund, to
the extent that such information is reasonably available to the Trust
Administrator.

 

Section 11.13                          Conflicts.

 

To the extent that the terms of this Agreement conflict with the terms
of the Servicing Agreement, the Servicing Agreement shall govern.

 

147

 

Section 11.14                          Counterparts.

 

This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.

 

Section 11.15                          Transfer
of Servicing.

 

The Seller agrees that it shall provide written notice to the Master
Servicer, the Trust Administrator, any NIMS Insurer and the Trustee thirty days
prior to any proposed transfer or assignment by the Seller of its rights under
the Servicing Agreement or of the servicing thereunder or delegation of its
rights or duties thereunder or any portion thereof to any other Person other
than the initial Servicer under such Servicing Agreement.  In addition, the ability of the Seller to
transfer or assign its rights and delegate its duties under the Servicing
Agreement or to transfer the servicing thereunder to a successor servicer shall
be subject to the following conditions:

 

(i)                                     satisfaction of the conditions to such
transfer as set forth in the Servicing Agreement including, without limitation,
receipt of written consent of any NIMS Insurer and the Master Servicer to such
transfer;

 

(ii)                                  Such successor servicer must be qualified to
service loans for FNMA or FHLMC, and must be a member in good standing of MERS;

 

(iii)                               Such successor servicer must satisfy the
seller/servicer eligibility standards in the Servicing Agreement, exclusive of
any experience in mortgage loan origination;

 

(iv)                              Such successor servicer must execute and
deliver to the Trustee an agreement, in form and substance reasonably
satisfactory to the Trustee, that contains an assumption by such successor
servicer of the due and punctual performance and observance of each covenant
and condition to be performed and observed by the applicable Servicer under the
Servicing Agreement or, in the case of a transfer of servicing to a party that
is already the Servicer pursuant to this Agreement, an agreement to add the
related Mortgage Loans to the Servicing Agreement already in effect with the
Servicer;

 

(v)                                 If the successor servicer is not the Servicer
of Mortgage Loans at the time of the transfer, there must be delivered to the
Trustee a letter from each Rating Agency to the effect that such transfer of
servicing will not result in a qualification, withdrawal or downgrade of the
then-current rating of any of the Certificates; and

 

(vi)                              The Seller shall, at its cost and expense,
take such steps, or cause the terminated Servicer to take such steps, as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the Mortgage Loans to such successor servicer, including, but not
limited to, the following: (A) to the extent required by the terms of the
Mortgage Loans and by applicable federal and state laws and regulations, the
Seller shall cause the prior Servicer to timely mail to each obligor under a
Mortgage Loan any required notices or disclosures describing the transfer of
servicing of the Mortgage

 

148

 

Loans to the successor
servicer; (B) prior to the effective date of such transfer of servicing, the
Seller shall cause the prior Servicer to transmit to any related insurer
notification of such transfer of servicing; (C) on or prior to the effective
date of such transfer of servicing, the Seller shall cause the prior Servicer
to deliver to the successor servicer all Mortgage Loan Documents and any
related records or materials; (D) on or prior to the effective date of such
transfer of servicing, the Seller shall cause the prior Servicer to transfer to
the successor servicer, or, if such transfer occurs after a Servicer Remittance
Date but before the next succeeding Deposit Date, to the Trustee, all funds
held by the prior Servicer in respect of the Mortgage Loans; (E) on or prior to
the effective date of such transfer of servicing, the Seller shall cause the
prior Servicer to, after the effective date of the transfer of servicing to the
successor servicer, continue to forward to such successor servicer, within one
Business Day of receipt, the amount of any payments or other recoveries
received by the prior Servicer, and to notify the successor servicer of the
source and proper application of each such payment or recovery; and (F) the
Seller shall cause the prior Servicer to, after the effective date of transfer
of servicing to the successor servicer, continue to cooperate with the
successor servicer to facilitate such transfer in such manner and to such
extent as the successor servicer may reasonably request.  Notwithstanding the foregoing, the prior
Servicer shall be obligated to perform the items listed above to the extent
provided in the Servicing Agreement.

 

Section 11.16                          Option
to Contribute Derivative Instrument.

 

(a)                                  At any
time on or after the Closing Date, the Seller shall have the right to
contribute to, and deposit into, the Trust a derivative contract or comparable
instrument (a “Derivative Instrument”). 
The derivative may have a notional amount in excess of the sum of the
beneficial interests in the trusts.  Any
such instrument shall constitute a fully prepaid agreement.  All collections, proceeds and other amounts
received by the Trust Administrator in respect of such instrument shall be
distributed to the Class X Certificates on the Distribution Date following
receipt thereof.  In no event shall such
an instrument constitute a part of any REMIC created hereunder.  In addition, in the event any such instrument
is deposited, the Trust shall be deemed to be divided into two separate and
discrete sub-trusts.  The assets of one
such sub-trust shall consist of all the assets of the Trust other than the
Derivative Instrument and the assets of the other sub-trust shall consist
solely of such instrument.  The Trust
Administrator shall have no tax reporting duties with respect to any such
Derivative Instrument or any related Sub-trust.

 

(b)                                 Notwithstanding
paragraph (a) above, in the event of the conveyance by the Seller of the Class
X Certificates to a trust established for the issuance of a series of NIMS
Securities, the Seller shall no longer have the right to deposit a Derivative
Instrument into the Trust.  For purposes
hereof, “NIMS Securities” are securities that evidence an interest in, or are
secured by, distributions on the Class X Certificate.

 

Section 11.17                          Ability
to Exercise Discretion with Respect to Defaulted Loans.

 

(a)                                  In managing the liquidation of defaulted
Mortgage Loans, Fieldstone Mortgage Company, in its capacity as Servicer, will
have sole discretion, subject to the terms of the Servicing Agreement, to sell
defaulted Mortgage Loans.  However, if
NIMS Securities are issued

 

149

 

that are secured by all or a portion of the
Class X Certificates, the servicing activities of Fieldstone Mortgages Company
will conform to the provisions of the Servicing Agreement and Fieldstone
Mortgage Company’s applicable standard policies and procedures and Fieldstone
Mortgage Company’s ability to sell defaulted Mortgage Loans will cease.

 

150

 

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

 

	
   

  	
  FIELDSTONE MORTGAGE
  INVESTMENT

  
	
   

  	
  CORPORATION, as Depositor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                              ],

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                              ],
  as Master Servicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                              ],
  as Trust Administrator

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIELDSTONE MORTGAGE COMPANY,
  as

  
	
   

  	
  Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT A

 

FORMS
OF CERTIFICATES

 

 

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES,
THIS CERTIFICATE REPRESENTS OWNERSHIP OF A “REGULAR INTEREST” IN A “REAL ESTATE
MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
AND A RIGHT TO RECEIVE PAYMENTS FROM THE BASIS RISK RESERVE FUND.

 

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

 

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE
PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE CERTIFICATE
PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AS SET FORTH HEREIN.

 

UNLESS THIS CERTIFICATE 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 CERTIFICATE 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.

 

 

FIELDSTONE MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATES, SERIES 2005-[  ]

 

MORTGAGE-BACKED CERTIFICATE, CLASS 1-A

 

Evidencing a beneficial
interest in two pools consisting primarily of certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans and other assets in a trust fund established by:

 

FIELDSTONE MORTGAGE INVESTMENT CORPORATION

 

	
  Initial Class Principal

  	
   

  	
  Initial Certificate

  
	
  Amount of the Class 1-A

  	
   

  	
  Principal Amount of this

  
	
  Certificates:

  	
   

  	
  Certificate:

  
	
   

  	
   

  	
   

  
	
  Certificate

  	
   

  	
  Cut-off Date: [        ],
  2005

  
	
  Interest Rate: Variable

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
  CUSIP:

  

 

 

THIS CERTIFIES THAT CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Amount of this Certificate by the Initial Class
Principal Amount of the Class 1-A Certificates, both as specified above)
evidencing beneficial ownership in a Trust Fund consisting primarily of (i)
certain conventional, first and second lien, adjustable and fixed rate, fully
amortizing and balloon, residential mortgage loans acquired by the Trust Fund
(the “Mortgage Loans”), together with all collections therefrom and proceeds
thereof (excluding all scheduled payments of principal and interest due on the
Mortgage Loans on or before the Cut-off Date), (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Depositor’s rights
under the Mortgage Loan Purchase Agreement (including any security interest
created thereby), (iv) the Depositor’s rights under any Insurance Policies
related to the Mortgage Loans, (v) amounts on deposit from time to time in the
Collection Account and the Basis Risk Reserve Fund and (vi) amounts, if any,
payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this Certificate 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 [             ],
2005 (each, a “Distribution Date”), to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount, if any, required to be distributed to all the Certificates of
the Class represented by this Certificate. 
All sums distributable on this Certificate are payable in the coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts.

 

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

 

Unless the certificate of authentication hereon has been executed by or
on behalf of the Trust Administrator, whose name appears below by manual
signature, this Certificate shall not be entitled to any benefit under the
Trust Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate
to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ],
  2005

  

 

TRUST ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Certificates referred to in the within-mentioned
Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ],
  2005

  

 

 

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES,
THIS CERTIFICATE REPRESENTS OWNERSHIP OF A “REGULAR INTEREST” IN A “REAL ESTATE
MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
AND A RIGHT TO RECEIVE PAYMENTS FROM THE BASIS RISK RESERVE FUND.

 

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

 

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE
PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE CERTIFICATE
PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AS SET FORTH HEREIN.

 

UNLESS THIS CERTIFICATE 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 CERTIFICATE 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.

 

 

FIELDSTONE MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS 2-A1

 

Evidencing a beneficial
interest in two pools consisting primarily of certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans and other assets in a trust fund established by:

 

FIELDSTONE MORTGAGE INVESTMENT CORPORATION

 

	
  Initial Class Principal

  	
   

  	
  Initial Certificate

  
	
  Amount of the Class 2-A1

  	
   

  	
  Principal Amount of this

  
	
  Certificates:

  	
   

  	
  Certificate:

  
	
   

  	
   

  	
   

  
	
  Certificate

  	
   

  	
  Cut-off Date: [         ],
  2005

  
	
  Interest Rate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
  CUSIP:

  

 

 

THIS CERTIFIES THAT CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Amount of this Certificate by the Initial Class
Principal Amount of the Class 2-A1 Certificates, both as specified above)
evidencing beneficial ownership in a Trust Fund consisting primarily of (i)
certain conventional, first and second lien, adjustable and fixed rate, fully
amortizing and balloon, residential mortgage loans acquired by the Trust Fund
(the “Mortgage Loans”), together with all collections therefrom and proceeds
thereof (excluding all scheduled payments of principal and interest due on the
Mortgage Loans on or before the Cut-off Date), (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Depositor’s rights
under the Mortgage Loan Purchase Agreement (including any security interest
created thereby), (iv) the Depositor’s rights under any Insurance Policies
related to the Mortgage Loans, (v) amounts on deposit from time to time in the
Collection Account and the Basis Risk Reserve Fund and (vi) amounts, if any,
payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this Certificate 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 [            ],
2005 (each, a “Distribution Date”), to the Person in whose name this Certificate
is registered at the close of business on the Business Day immediately
preceding such Distribution Date (the “Record Date”), in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount, if any, required to be distributed to all the Certificates of the Class
represented by this Certificate.  All
sums distributable on this Certificate are payable in the coin or currency of
the United States of America which at the time of payment is legal tender for
the payment of public and private debts.

 

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

 

Unless the certificate of authentication hereon has been executed by or
on behalf of the Trust Administrator, whose name appears below by manual
signature, this Certificate shall not be entitled to any benefit under the
Trust Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate
to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ],
  2005

  

 

TRUST ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Certificates referred to in the within-mentioned
Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ],
  2005

  

 

 

 

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES,
THIS CERTIFICATE REPRESENTS OWNERSHIP OF A “REGULAR INTEREST” IN A “REAL ESTATE
MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
AND A RIGHT TO RECEIVE PAYMENTS FROM THE BASIS RISK RESERVE FUND.

 

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

 

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE
PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE CERTIFICATE
PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AS SET FORTH HEREIN.

 

UNLESS THIS CERTIFICATE 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 CERTIFICATE 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.

 

 

FIELDSTONE MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS 2-A2

 

Evidencing a beneficial
interest in two pools consisting primarily of certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans and other assets in a trust fund established by:

 

FIELDSTONE MORTGAGE INVESTMENT CORPORATION

 

	
  Initial Class Principal

  	
   

  	
  Initial Certificate

  
	
  Amount of the Class 2-A2

  	
   

  	
  Principal Amount of this

  
	
  Certificates:

  	
   

  	
  Certificate:

  
	
   

  	
   

  	
   

  
	
  Certificate

  	
   

  	
  Cut-off Date: [        ],
  2005

  
	
  Interest Rate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
  CUSIP:

  

 

 

THIS CERTIFIES THAT CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Amount of this Certificate by the Initial Class
Principal Amount of the Class 2-A2 Certificates, both as specified above)
evidencing beneficial ownership in a Trust Fund consisting primarily of (i)
certain conventional, first and second lien, adjustable and fixed rate, fully
amortizing and balloon, residential mortgage loans acquired by the Trust Fund
(the “Mortgage Loans”), together with all collections therefrom and proceeds
thereof (excluding all scheduled payments of principal and interest due on the
Mortgage Loans on or before the Cut-off Date), (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Depositor’s rights
under the Mortgage Loan Purchase Agreement (including any security interest
created thereby), (iv) the Depositor’s rights under any Insurance Policies
related to the Mortgage Loans, (v) amounts on deposit from time to time in the
Collection Account and the Basis Risk Reserve Fund and (vi) amounts, if any,
payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this Certificate 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 [              ],
2005 (each, a “Distribution Date”), to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount, if any, required to be distributed to all the Certificates of
the Class represented by this Certificate. 
All sums distributable on this Certificate are payable in the coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts.

 

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

 

Unless the certificate of authentication hereon has been executed by or
on behalf of the Trust Administrator, whose name appears below by manual
signature, this Certificate shall not be entitled to any benefit under the
Trust Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate
to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ],
  2005

  

 

TRUST ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Certificates referred to in the within-mentioned
Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ],
  2005

  

 

 

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES,
THIS CERTIFICATE REPRESENTS OWNERSHIP OF A “REGULAR INTEREST” IN A “REAL ESTATE
MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
AND A RIGHT TO RECEIVE PAYMENTS FROM THE BASIS RISK RESERVE FUND.

 

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

 

PRINCIPAL WILL NOT BE DISTRIBUTABLE IN
RESPECT OF THIS CERTIFICATE.  INTEREST IS
CALCULATED ON THIS CERTIFICATE BASED ON A NOTIONAL AMOUNT DETERMINED AS
DESCRIBED IN THE TRUST AGREEMENT.  THE
NOTIONAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL
NOTIONAL AMOUNT OF THIS CERTIFICATE AS SET FORTH HEREON.

 

UNLESS THIS CERTIFICATE 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 CERTIFICATE 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.

 

 

FIELDSTONE MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS A-IO

 

Evidencing a beneficial
interest in two pools consisting primarily of certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans and other assets in a trust fund established by:

 

FIELDSTONE MORTGAGE INVESTMENT CORPORATION

 

	
  Initial Class Notional

  	
   

  	
  Initial Notional

  
	
  Amount of the Class A-IO

  	
   

  	
  Amount of this

  
	
  Certificates:

  	
   

  	
  Certificate:

  
	
   

  	
   

  	
   

  
	
  Percentages Interest of
  this

  	
   

  	
   

  
	
  Certificate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Certificate

  	
   

  	
  Cut-off Date: [        ],
  2005

  
	
  Interest Rate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
  CUSIP:

  

 

 

THIS CERTIFIES THAT CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Notional Amount of this Certificate by the Initial Class Notional
Amount of the Class A-IO Certificates, both as specified above) evidencing
beneficial ownership in a Trust Fund consisting primarily of (i) certain
conventional, first and second lien, adjustable and fixed rate, fully
amortizing and balloon, residential mortgage loans acquired by the Trust Fund
(the “Mortgage Loans”), together with all collections therefrom and proceeds
thereof (excluding all scheduled payments of principal and interest due on the
Mortgage Loans on or before the Cut-off Date), (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Depositor’s rights
under the Mortgage Loan Purchase Agreement (including any security interest
created thereby), (iv) the Depositor’s rights under any Insurance Policies
related to the Mortgage Loans, (v) amounts on deposit from time to time in the
Collection Account and the Basis Risk Reserve Fund and (vi) amounts, if any,
payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this Certificate 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 [             ],
2005 (each, a “Distribution Date”), to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount, if any, required to be distributed to all the Certificates of
the Class represented by this Certificate. 
All sums distributable on this Certificate are payable in the coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts.

 

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

 

Unless the certificate of authentication hereon has been executed by or
on behalf of the Trust Administrator, whose name appears below by manual
signature, this Certificate shall not be entitled to any benefit under the
Trust Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate
to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [                   ]

  

 

TRUST ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Certificates referred to in the within-mentioned
Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ],
  2005

  

 

 

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES,
THIS CERTIFICATE REPRESENTS OWNERSHIP OF A “REGULAR INTEREST” IN A “REAL ESTATE
MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
AND A RIGHT TO RECEIVE PAYMENTS FROM THE BASIS RISK RESERVE FUND.

 

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

 

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE
PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH
HEREIN.  ACCORDINGLY, THE CERTIFICATE
PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE INITIAL
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AS SET FORTH HEREIN.

 

THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF
PAYMENT AS DESCRIBED IN THE TRUST AGREEMENT REFERRED TO HEREIN.

 

UNLESS THIS CERTIFICATE 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 CERTIFICATE 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.

 

NO TRANSFER OF THIS CERTIFICATE SHALL BE
REGISTERED IF ITS RATING IS BELOW INVESTMENT GRADE UPON ACQUISITION UNLESS THE
PROSPECTIVE TRANSFEREE PROVIDES THE TRUST ADMINISTRATOR WITH (A) A
CERTIFICATION TO THE EFFECT THAT SUCH TRANSFEREE (1) IS NEITHER 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 INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (COLLECTIVELY, A “PLAN”),
NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF
ANY SUCH PLAN OR (2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH
TRANSFEREE IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN “INSURANCE
COMPANY GENERAL ACCOUNT” (AS SUCH TERM IS DEFINED IN SECTION V(e) OF THE
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 (“PTCE 95-60”)) AND THAT THE
PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE

 

 

COVERED
UNDER SECTIONS I AND III OF PTCE 95-60; OR (B) AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUST ADMINISTRATOR, AND UPON WHICH THE TRUSTEE, THE MASTER
SERVICER, THE DEPOSITOR, THE TRUST ADMINISTRATOR AND THE NIMS INSURER SHALL BE
ENTITLED TO RELY, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF SUCH
CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT RESULT IN ANY NON-EXEMPT
PROHIBITED TRANSACTIONS UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR, THE TRUST
ADMINISTRATOR OR THE NIMS INSURER TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF COUNSEL
SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE TRUSTEE, THE MASTER SERVICER, THE
DEPOSITOR, THE TRUST ADMINISTRATOR OR THE NIMS INSURER.  A TRANSFEREE OF A BOOK- ENTRY CERTIFICATE
SHALL BE DEEMED TO HAVE MADE A REPRESENTATION AS REQUIRED HEREIN.

 

 

FIELDSTONE
MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS M1

 

Evidencing a beneficial
interest in two pools consisting primarily of certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans and other assets in a trust fund established by:

 

FIELDSTONE
MORTGAGE INVESTMENT CORPORATION

 

	
  Initial Class Principal

  	
   

  	
  Initial Certificate

  
	
  Amount of the Class M1

  	
   

  	
  Principal Amount of this

  
	
  Certificates:

  	
   

  	
  Certificate:

  
	
   

  	
   

  	
   

  
	
  Certificate

  	
   

  	
  Cut-off Date: [       ], 2005

  
	
  Interest Rate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
  CUSIP:

  

 

 

THIS CERTIFIES THAT CEDE &
CO. is the registered owner of the Percentage Interest evidenced by this
Certificate (obtained by dividing the Initial Certificate Principal Amount of
this Certificate by the Initial Class Principal Amount of all Class M1
Certificates, both as specified above) evidencing beneficial ownership in a
Trust Fund consisting primarily of (i) certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans acquired by the Trust Fund (the “Mortgage Loans”),
together with all collections therefrom and proceeds thereof (excluding all
scheduled payments of principal and interest due on the Mortgage Loans on or
before the Cut-off Date), (ii) any REO Property, together with all collections
thereon and proceeds thereof, (iii) the Depositor’s rights under the
Mortgage Loan Purchase Agreement (including any security interest created
thereby), (iv) the Depositor’s rights under any Insurance Policies related
to the Mortgage Loans, (v) amounts on deposit from time to time in the
Collection Account and the Basis Risk Reserve Fund and (vi) amounts, if
any, payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this
Certificate 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 [              ],
2005 (each, a “Distribution Date”), to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount, if any, required to be distributed to all the Certificates of
the Class represented by this Certificate. 
All sums distributable on this Certificate are payable in the coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts.

 

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

 

Unless the certificate of
authentication hereon has been executed by or on behalf of the Trust
Administrator, whose name appears below by manual signature, this Certificate
shall not be entitled to any benefit under the Trust Agreement or be valid for
any purpose.

 

 

IN WITNESS WHEREOF, the
Trust Administrator has caused this Certificate to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

TRUST
ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Certificates referred to in the within-mentioned Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

 

SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS OWNERSHIP OF
A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND A RIGHT TO RECEIVE PAYMENTS
FROM THE BASIS RISK RESERVE FUND.

 

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

 

DISTRIBUTIONS
IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE
MADE IN INSTALLMENTS AS SET FORTH HEREIN. 
ACCORDINGLY, THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY
TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AS SET FORTH HEREIN.

 

THIS
CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE TRUST
AGREEMENT REFERRED TO HEREIN.

 

UNLESS
THIS CERTIFICATE 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 CERTIFICATE 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.

 

NO
TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED IF ITS RATING IS BELOW
INVESTMENT GRADE UPON ACQUISITION UNLESS THE PROSPECTIVE TRANSFEREE PROVIDES
THE TRUST ADMINISTRATOR WITH (A) A CERTIFICATION TO THE EFFECT THAT SUCH
TRANSFEREE (1) IS NEITHER 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (COLLECTIVELY, A “PLAN”),
NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF
ANY SUCH PLAN OR (2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH
TRANSFEREE IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN “INSURANCE
COMPANY GENERAL ACCOUNT” (AS SUCH TERM IS DEFINED IN SECTION V(e) OF
THE PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 (“PTCE 95-60”)) AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTIONS I AND
III OF PTCE 95-60; OR (B) AN OPINION OF

 

 

COUNSEL
SATISFACTORY TO THE TRUST ADMINISTRATOR, AND UPON WHICH THE TRUSTEE, THE MASTER
SERVICER, THE DEPOSITOR, THE TRUST ADMINISTRATOR AND THE NIMS INSURER SHALL BE
ENTITLED TO RELY, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF SUCH
CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT RESULT IN ANY NON-EXEMPT
PROHIBITED TRANSACTIONS UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR, THE TRUST
ADMINISTRATOR OR THE NIMS INSURER TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF COUNSEL
SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE TRUSTEE, THE MASTER SERVICER,
THE DEPOSITOR, THE TRUST ADMINISTRATOR OR THE NIMS INSURER.  A TRANSFEREE OF A BOOK- ENTRY CERTIFICATE
SHALL BE DEEMED TO HAVE MADE A REPRESENTATION AS REQUIRED HEREIN.

 

 

FIELDSTONE
MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS M2

 

Evidencing a beneficial interest
in two pools consisting primarily of certain conventional, first and second
lien, adjustable and fixed rate, fully amortizing and balloon, residential
mortgage loans and other assets in a trust fund established by:

 

FIELDSTONE
MORTGAGE INVESTMENT CORPORATION

 

	
  Initial Class Principal

  	
   

  	
  Initial Certificate

  
	
  Amount of the Class M2

  	
   

  	
  Principal Amount of this

  
	
  Certificates:

  	
   

  	
  Certificate:

  
	
   

  	
   

  	
   

  
	
  Certificate

  	
   

  	
  Cut-off Date: [       ], 2005

  
	
  Interest Rate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
  CUSIP:

  

 

 

THIS CERTIFIES THAT CEDE &
CO. is the registered owner of the Percentage Interest evidenced by this
Certificate (obtained by dividing the Initial Certificate Principal Amount of
this Certificate by the Initial Class Principal Amount of Class M2
Certificates, both as specified above) evidencing beneficial ownership in a
Trust Fund consisting primarily of (i) certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans acquired by the Trust Fund (the “Mortgage Loans”),
together with all collections therefrom and proceeds thereof (excluding all
scheduled payments of principal and interest due on the Mortgage Loans on or
before the Cut-off Date), (ii) any REO Property, together with all
collections thereon and proceeds thereof, (iii) the Depositor’s rights
under the Mortgage Loan Purchase Agreement (including any security interest
created thereby), (iv) the Depositor’s rights under any Insurance Policies
related to the Mortgage Loans, (v) amounts on deposit from time to time in
the Collection Account and the Basis Risk Reserve Fund and (vi) amounts,
if any, payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this
Certificate 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 [               ],
2005 (each, a “Distribution Date”), to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount, if any, required to be distributed to all the Certificates of
the Class represented by this Certificate. 
All sums distributable on this Certificate are payable in the coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts.

 

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

 

Unless the certificate of
authentication hereon has been executed by or on behalf of the Trust
Administrator, whose name appears below by manual signature, this Certificate
shall not be entitled to any benefit under the Trust Agreement or be valid for
any purpose.

 

 

IN WITNESS WHEREOF, the
Trust Administrator has caused this Certificate to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

TRUST
ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Certificates referred to in the within-mentioned Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

 

SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS OWNERSHIP OF
A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND A RIGHT TO RECEIVE PAYMENTS
FROM THE BASIS RISK RESERVE FUND.

 

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

 

DISTRIBUTIONS
IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE
MADE IN INSTALLMENTS AS SET FORTH HEREIN. 
ACCORDINGLY, THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY
TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AS SET FORTH HEREIN.

 

THIS
CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE TRUST
AGREEMENT REFERRED TO HEREIN.

 

UNLESS
THIS CERTIFICATE 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 CERTIFICATE 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.

 

NO
TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED IF ITS RATING IS BELOW
INVESTMENT GRADE UPON ACQUISITION UNLESS THE PROSPECTIVE TRANSFEREE PROVIDES
THE TRUST ADMINISTRATOR WITH (A) A CERTIFICATION TO THE EFFECT THAT SUCH
TRANSFEREE (1) IS NEITHER 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (COLLECTIVELY, A “PLAN”),
NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF
ANY SUCH PLAN OR (2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH
TRANSFEREE IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN “INSURANCE
COMPANY GENERAL ACCOUNT” (AS SUCH TERM IS DEFINED IN SECTION V(e) OF
THE PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 (“PTCE 95-60”)) AND THE
PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE

 

 

COVERED
UNDER SECTIONS I AND III OF PTCE 95-60; OR (B) AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUST ADMINISTRATOR, AND UPON WHICH THE TRUSTEE, THE MASTER
SERVICER, THE DEPOSITOR, THE TRUST ADMINISTRATOR AND THE NIMS INSURER SHALL BE
ENTITLED TO RELY, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE
BY THE PROSPECTIVE TRANSFEREE WILL NOT RESULT IN ANY NON-EXEMPT PROHIBITED
TRANSACTIONS UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE AND WILL
NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR, THE TRUST
ADMINISTRATOR OR THE NIMS INSURER TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF COUNSEL
SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE TRUSTEE, THE MASTER SERVICER,
THE DEPOSITOR, THE TRUST ADMINISTRATOR OR THE NIMS INSURER.  A TRANSFEREE OF A BOOK- ENTRY CERTIFICATE
SHALL BE DEEMED TO HAVE MADE A REPRESENTATION AS REQUIRED HEREIN.

 

 

FIELDSTONE
MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS M3

 

Evidencing a beneficial
interest in two pools consisting primarily of certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans and other assets in a trust fund established by:

 

FIELDSTONE
MORTGAGE INVESTMENT CORPORATION

 

	
  Initial Class Principal

  	
   

  	
  Initial Certificate

  
	
  Amount of the Class M3

  	
   

  	
  Principal Amount of this

  
	
  Certificates:

  	
   

  	
  Certificate:

  
	
   

  	
   

  	
   

  
	
  Certificate

  	
   

  	
  Cut-off Date: [       ], 2005

  
	
  Interest Rate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
  CUSIP:

  

 

 

THIS CERTIFIES THAT CEDE &
CO. is the registered owner of the Percentage Interest evidenced by this
Certificate (obtained by dividing the Initial Certificate Principal Amount of
this Certificate by the Initial Class Principal Amount of all Class M3
Certificates, both as specified above) evidencing beneficial ownership in a
Trust Fund consisting primarily of (i) certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans acquired by the Trust Fund (the “Mortgage Loans”),
together with all collections therefrom and proceeds thereof (excluding all
scheduled payments of principal and interest due on the Mortgage Loans on or
before the Cut-off Date), (ii) any REO Property, together with all
collections thereon and proceeds thereof, (iii) the Depositor’s rights
under the Mortgage Loan Purchase Agreement (including any security interest
created thereby), (iv) the Depositor’s rights under any Insurance Policies
related to the Mortgage Loans, (v) amounts on deposit from time to time in
the Collection Account and the Basis Risk Reserve Fund and (vi) amounts,
if any, payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this
Certificate 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 [                ],
2005 (each, a “Distribution Date”), to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount, if any, required to be distributed to all the Certificates of
the Class represented by this Certificate. 
All sums distributable on this Certificate are payable in the coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts.

 

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

 

Unless the certificate of
authentication hereon has been executed by or on behalf of the Trust
Administrator, whose name appears below by manual signature, this Certificate
shall not be entitled to any benefit under the Trust Agreement or be valid for
any purpose.

 

 

IN WITNESS WHEREOF, the
Trust Administrator has caused this Certificate to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

TRUST
ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Certificates referred to in the within-mentioned Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

 

SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS OWNERSHIP OF
A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND A RIGHT TO RECEIVE PAYMENTS
FROM THE BASIS RISK RESERVE FUND.

 

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

 

DISTRIBUTIONS
IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE
MADE IN INSTALLMENTS AS SET FORTH HEREIN. 
ACCORDINGLY, THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY
TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AS SET FORTH HEREIN.

 

THIS
CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE TRUST
AGREEMENT REFERRED TO HEREIN.

 

UNLESS
THIS CERTIFICATE 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 CERTIFICATE 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.

 

NO
TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED IF ITS RATING IS BELOW
INVESTMENT GRADE UPON ACQUISITION UNLESS THE PROSPECTIVE TRANSFEREE PROVIDES
THE TRUST ADMINISTRATOR WITH (A) A CERTIFICATION TO THE EFFECT THAT SUCH
TRANSFEREE (1) IS NEITHER 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (COLLECTIVELY, A “PLAN”),
NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF
ANY SUCH PLAN OR (2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH
TRANSFEREE IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN “INSURANCE
COMPANY GENERAL ACCOUNT” (AS SUCH TERM IS DEFINED IN SECTION V(e) OF
THE PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 (“PTCE 95-60”)) AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE

 

 

COVERED
UNDER SECTIONS I AND III OF PTCE 95-60; OR (B) AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUST ADMINISTRATOR, AND UPON WHICH THE TRUSTEE, THE MASTER
SERVICER, THE DEPOSITOR, THE TRUST ADMINISTRATOR AND THE NIMS INSURER SHALL BE
ENTITLED TO RELY, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF SUCH
CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT RESULT IN ANY NON-EXEMPT
PROHIBITED TRANSACTIONS UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR, THE TRUST
ADMINISTRATOR OR THE NIMS INSURER TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF COUNSEL
SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE TRUSTEE, THE MASTER SERVICER,
THE DEPOSITOR, THE TRUST ADMINISTRATOR OR THE NIMS INSURER.  A TRANSFEREE OF A BOOK- ENTRY CERTIFICATE
SHALL BE DEEMED TO HAVE MADE A REPRESENTATION AS REQUIRED HEREIN.

 

 

FIELDSTONE
MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS M4

 

Evidencing a beneficial
interest in two pools consisting primarily of certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans and other assets in a trust fund established by:

 

FIELDSTONE
MORTGAGE INVESTMENT CORPORATION

 

	
  Initial Class Principal

  	
   

  	
  Initial Certificate

  
	
  Amount of the Class M4

  	
   

  	
  Principal Amount of this

  
	
  Certificates:

  	
   

  	
  Certificate:

  
	
   

  	
   

  	
   

  
	
  Certificate

  	
   

  	
  Cut-off Date: [       ], 2005

  
	
  Interest Rate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
  CUSIP:

  

 

 

THIS CERTIFIES THAT CEDE &
CO. is the registered owner of the Percentage Interest evidenced by this
Certificate (obtained by dividing the Initial Certificate Principal Amount of
this Certificate by the Initial Class Principal Amount of all Class M4
Certificates, both as specified above) evidencing beneficial ownership in a
Trust Fund consisting primarily of (i) certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans acquired by the Trust Fund (the “Mortgage Loans”),
together with all collections therefrom and proceeds thereof (excluding all
scheduled payments of principal and interest due on the Mortgage Loans on or
before the Cut-off Date), (ii) any REO Property, together with all
collections thereon and proceeds thereof, (iii) the Depositor’s rights
under the Mortgage Loan Purchase Agreement (including any security interest
created thereby), (iv) the Depositor’s rights under any Insurance Policies
related to the Mortgage Loans, (v) amounts on deposit from time to time in
the Collection Account and the Basis Risk Reserve Fund and (vi) amounts,
if any, payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this
Certificate 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 [                  ],
2005 (each, a “Distribution Date”), to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount, if any, required to be distributed to all the Certificates of
the Class represented by this Certificate. 
All sums distributable on this Certificate are payable in the coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts.

 

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

 

Unless the certificate of
authentication hereon has been executed by or on behalf of the Trust
Administrator, whose name appears below by manual signature, this Certificate
shall not be entitled to any benefit under the Trust Agreement or be valid for
any purpose.

 

 

IN WITNESS WHEREOF, the
Trust Administrator has caused this Certificate to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

TRUST
ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Certificates referred to in the within-mentioned Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

 

SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS OWNERSHIP OF
A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND A RIGHT TO RECEIVE PAYMENTS
FROM THE BASIS RISK RESERVE FUND.

 

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

 

DISTRIBUTIONS
IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE
MADE IN INSTALLMENTS AS SET FORTH HEREIN. 
ACCORDINGLY, THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY
TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AS SET FORTH HEREIN.

 

THIS
CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE TRUST
AGREEMENT REFERRED TO HEREIN.

 

UNLESS
THIS CERTIFICATE 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 CERTIFICATE 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.

 

NO
TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED IF ITS RATING IS BELOW
INVESTMENT GRADE UPON ACQUISITION UNLESS THE PROSPECTIVE TRANSFEREE PROVIDES
THE TRUST ADMINISTRATOR WITH (A) A CERTIFICATION TO THE EFFECT THAT SUCH
TRANSFEREE (1) IS NEITHER 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (COLLECTIVELY, A “PLAN”),
NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF
ANY SUCH PLAN OR (2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH
TRANSFEREE IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN “INSURANCE
COMPANY GENERAL ACCOUNT” (AS SUCH TERM IS DEFINED IN SECTION V(e) OF
THE PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 (“PTCE 95-60”)) AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTIONS I AND
III OF PTCE 95-60; OR (B) AN OPINION OF

 

 

COUNSEL
SATISFACTORY TO THE TRUST ADMINISTRATOR, AND UPON WHICH THE TRUSTEE, THE MASTER
SERVICER, THE DEPOSITOR, THE TRUST ADMINISTRATOR AND THE NIMS INSURER SHALL BE
ENTITLED TO RELY, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF SUCH
CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT RESULT IN ANY NON-EXEMPT
PROHIBITED TRANSACTIONS UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR, THE TRUST
ADMINISTRATOR OR THE NIMS INSURER TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF COUNSEL
SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE TRUSTEE, THE MASTER SERVICER,
THE DEPOSITOR, THE TRUST ADMINISTRATOR OR THE NIMS INSURER.  A TRANSFEREE OF A BOOK- ENTRY CERTIFICATE
SHALL BE DEEMED TO HAVE MADE A REPRESENTATION AS REQUIRED HEREIN.

 

 

FIELDSTONE
MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS M5

 

Evidencing a beneficial
interest in two pools consisting primarily of certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans and other assets in a trust fund established by:

 

FIELDSTONE
MORTGAGE INVESTMENT CORPORATION

 

	
  Initial Class Principal

  	
   

  	
  Initial Certificate

  
	
  Amount of the Class M5

  	
   

  	
  Principal Amount of this

  
	
  Certificates:

  	
   

  	
  Certificate:

  
	
   

  	
   

  	
   

  
	
  Certificate

  	
   

  	
  Cut-off Date: [       ], 2005

  
	
  Interest Rate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
  CUSIP:

  

 

 

THIS CERTIFIES THAT CEDE &
CO. is the registered owner of the Percentage Interest evidenced by this
Certificate (obtained by dividing the Initial Certificate Principal Amount of
this Certificate by the Initial Class Principal Amount of all Class M5
Certificates, both as specified above) evidencing beneficial ownership in a
Trust Fund consisting primarily of (i) certain conventional, first and
second lien, adjustable and fixed rate, fully amortizing and balloon,
residential mortgage loans acquired by the Trust Fund (the “Mortgage Loans”),
together with all collections therefrom and proceeds thereof (excluding all
scheduled payments of principal and interest due on the Mortgage Loans on or
before the Cut-off Date), (ii) any REO Property, together with all
collections thereon and proceeds thereof, (iii) the Depositor’s rights
under the Mortgage Loan Purchase Agreement (including any security interest
created thereby), (iv) the Depositor’s rights under any Insurance Policies
related to the Mortgage Loans, (v) amounts on deposit from time to time in
the Collection Account and the Basis Risk Reserve Fund and (vi) amounts,
if any, payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this
Certificate 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 [                ],
2005 (each, a “Distribution Date”), to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount, if any, required to be distributed to all the Certificates of
the Class represented by this Certificate. 
All sums distributable on this Certificate are payable in the coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts.

 

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

 

Unless the certificate of
authentication hereon has been executed by or on behalf of the Trust
Administrator, whose name appears below by manual signature, this Certificate
shall not be entitled to any benefit under the Trust Agreement or be valid for
any purpose.

 

 

IN WITNESS WHEREOF, the
Trust Administrator has caused this Certificate to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

TRUST
ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Certificates referred to in the within-mentioned Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

 

SOLELY
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS OWNERSHIP OF
A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND A RIGHT TO RECEIVE PAYMENTS
FROM THE BASIS RISK RESERVE FUND.

 

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

 

DISTRIBUTIONS
IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE MAY BE
MADE IN INSTALLMENTS AS SET FORTH HEREIN. 
ACCORDINGLY, THE CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY
TIME MAY BE LESS THAN THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE AS SET FORTH HEREIN.

 

THIS
CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE TRUST
AGREEMENT REFERRED TO HEREIN.

 

UNLESS
THIS CERTIFICATE 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 CERTIFICATE 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.

 

NO
TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED IF ITS RATING IS BELOW
INVESTMENT GRADE UPON ACQUISITION UNLESS THE PROSPECTIVE TRANSFEREE PROVIDES
THE TRUST ADMINISTRATOR WITH (A) A CERTIFICATION TO THE EFFECT THAT SUCH
TRANSFEREE (1) IS NEITHER 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
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (COLLECTIVELY, A “PLAN”),
NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF
ANY SUCH PLAN OR (2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH
TRANSFEREE IS PURCHASING SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN “INSURANCE
COMPANY GENERAL ACCOUNT” (AS SUCH TERM IS DEFINED IN SECTION V(e) OF
THE PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 (“PTCE 95-60”)) AND THAT
THE PURCHASE AND HOLDING OF SUCH CERTIFICATES ARE COVERED UNDER SECTIONS I AND
III OF PTCE 95-60; OR (B) AN OPINION OF

 

 

COUNSEL SATISFACTORY TO THE TRUST
ADMINISTRATOR, AND UPON WHICH THE TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR,
THE TRUST ADMINISTRATOR AND THE NIMS INSURER SHALL BE ENTITLED TO RELY, TO THE
EFFECT THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE
TRANSFEREE WILL NOT RESULT IN ANY NON-EXEMPT PROHIBITED TRANSACTIONS UNDER
TITLE I OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE MASTER SERVICER, THE DEPOSITOR, THE TRUST ADMINISTRATOR OR THE NIMS INSURER
TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE TRUST
AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST FUND,
THE TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR, THE TRUST ADMINISTRATOR OR THE
NIMS INSURER.  A TRANSFEREE OF A BOOK-
ENTRY CERTIFICATE SHALL BE DEEMED TO HAVE MADE A REPRESENTATION AS REQUIRED
HEREIN.

 

 

FIELDSTONE MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS B

 

Evidencing a beneficial interest in two pools consisting primarily of certain
conventional, first and second lien, adjustable and fixed rate, fully
amortizing and balloon, residential mortgage loans and other assets in a trust
fund established by:

 

FIELDSTONE MORTGAGE INVESTMENT CORPORATION

 

	
  Initial Class Principal

  	
   

  	
  Initial Certificate

  
	
  Amount of the Class B

  	
   

  	
  Principal Amount of this

  
	
  Certificates:

  	
   

  	
  Certificate:

  
	
   

  	
   

  	
   

  
	
  Certificate

  	
   

  	
  Cut-off Date: [       ],
  2005

  
	
  Interest Rate:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
  CUSIP:

  

 

 

THIS CERTIFIES THAT CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Amount of this Certificate by the Initial Class
Principal Amount of all Class B Certificates, both as specified above)
evidencing beneficial ownership in a Trust Fund consisting primarily of (i)
certain conventional, first and second lien, adjustable and fixed rate, fully
amortizing and balloon, residential mortgage loans acquired by the Trust Fund
(the “Mortgage Loans”), together with all collections therefrom and proceeds
thereof (excluding all scheduled payments of principal and interest due on the
Mortgage Loans on or before the Cut-off Date), (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Depositor’s rights
under the Mortgage Loan Purchase Agreement (including any security interest
created thereby), (iv) the Depositor’s rights under any Insurance Policies
related to the Mortgage Loans, (v) amounts on deposit from time to time in the
Collection Account and the Basis Risk Reserve Fund and (vi) amounts, if any,
payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this Certificate 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 [               ],
2005 (each, a “Distribution Date”), to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding such Distribution Date (the “Record Date”), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount, if any, required to be distributed to all the Certificates of
the Class represented by this Certificate. 
All sums distributable on this Certificate are payable in the coin or
currency of the United States of America which at the time of payment is legal
tender for the payment of public and private debts.

 

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

 

Unless the certificate of authentication hereon has been executed by or
on behalf of the Trust Administrator, whose name appears below by manual
signature, this Certificate shall not be entitled to any benefit under the
Trust Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate
to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

TRUST ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Certificates referred to in the within-mentioned
Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

 

THIS CERTIFICATE IS A REMIC REGULAR INTEREST
CERTIFICATE.  THIS CERTIFICATE DOES NOT
EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY, THE
DEPOSITOR, THE TRUSTEE, THE TRUST ADMINISTRATOR OR ANY AFFILIATE OF ANY OF THEM
AND IS NOT INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.

 

THIS CERTIFICATE IS NOT ENTITLED TO SCHEDULED
DISTRIBUTIONS OF PRINCIPAL AND WILL NOT ACCRUE INTEREST.  THE HOLDER OF THIS CERTIFICATE WILL BE
ENTITLED TO CERTAIN DISTRIBUTIONS AS PROVIDED IN THE TRUST AGREEMENT.

 

THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF
PAYMENT AS DESCRIBED IN THE TRUST AGREEMENT REFERRED TO HEREIN.

 

THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE “1933 ACT”) OR ANY STATE
SECURITIES LAWS.  NEITHER THIS
CERTIFICATE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

 

THE HOLDER OF THIS CERTIFICATE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE
ONLY (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE 1933 ACT, (B) TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE 1933 ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
OR (C) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE 1933 ACT THAT IS
ACQUIRING THE 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 1933 ACT, SUBJECT TO THE TRUST ADMINISTRATOR’S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING IN THE TRUST AGREEMENT.

 

NO TRANSFER OF THIS CERTIFICATE SHALL BE
REGISTERED UNLESS THE PROSPECTIVE TRANSFEREE PROVIDES THE TRUST ADMINISTRATOR
WITH A CERTIFICATION TO THE EFFECT THAT SUCH TRANSFEREE IS 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
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
(COLLECTIVELY, A “PLAN”) NOR A PERSON ACTING ON

 

 

BEHALF OF ANY SUCH PLAN NOR A PERSON USING
THE ASSETS OF ANY SUCH PLAN.

 

 

FIELDSTONE MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS X

 

Evidencing a beneficial interest in two pools consisting primarily of
certain conventional, first and second lien, adjustable and fixed rate, fully
amortizing and balloon, residential mortgage loans and other assets in a trust
fund established by:

 

FIELDSTONE MORTGAGE INVESTMENT CORPORATION

 

	
  Principal Interest: 100%

  	
   

  	
  Cut-off Date: [       ],
  2005

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
   

  

 

 

THIS CERTIFIES THAT FIELDSTONE MORTGAGE COMPANY is the registered owner
of the Percentage Interest evidenced by this Certificate in evidencing
beneficial ownership in a Trust Fund consisting primarily of (i) certain
conventional, first and second lien, adjustable and fixed rate, fully
amortizing and balloon, residential mortgage loans acquired by the Trust Fund
(the “Mortgage Loans”), together with all collections therefrom and proceeds
thereof (excluding all scheduled payments of principal and interest due on the
Mortgage Loans on or before the Cut-off Date), (ii) any REO Property, together
with all collections thereon and proceeds thereof, (iii) the Depositor’s rights
under the Mortgage Loan Purchase Agreement (including any security interest
created thereby), (iv) the Depositor’s rights under any Insurance Policies
related to the Mortgage Loans, (v) amounts on deposit from time to time in the
Collection Account and the Basis Risk Reserve Fund and (vi) amounts, if any,
payable to the Trust Fund under any Interest Rate Cap Agreement.

 

Distributions on this Certificate 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 [                 ],
2005 (each, a “Distribution Date”), to the Person in whose name this
Certificate is registered at the close of business on the Business Day of the
calendar month immediately preceding the month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, the Closing Date) (the “Record
Date”), in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount, if any, required to be distributed to all
the Certificates of the Class represented by this Certificate.  All sums distributable on this Certificate
are payable in the coin or currency of the United States of America which at
the time of payment is legal tender for the payment of public and private
debts.

 

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

 

Unless the certificate of authentication hereon has been executed by or
on behalf of the Trust Administrator, whose name appears below by manual
signature, this Certificate shall not be entitled to any benefit under the Trust
Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate
to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

TRUST ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Certificates referred to in the within-mentioned
Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

 

THIS CERTIFICATE IS A REMIC RESIDUAL INTEREST
CERTIFICATE.  THIS CERTIFICATE DOES NOT
EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY, THE
DEPOSITOR, THE TRUSTEE, THE TRUST ADMINISTRATOR OR ANY AFFILIATE OF ANY OF THEM
AND IS NOT INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY.

 

THIS CERTIFICATE IS NOT ENTITLED TO SCHEDULED
DISTRIBUTIONS OF PRINCIPAL AND WILL NOT ACCRUE INTEREST.  THE HOLDER OF THIS CERTIFICATE WILL BE
ENTITLED ONLY TO CERTAIN LIMITED DISTRIBUTIONS AS PROVIDED IN THE TRUST
AGREEMENT.

 

THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF
PAYMENT AS DESCRIBED IN THE TRUST AGREEMENT REFERRED TO HEREIN.

 

THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE “1933 ACT”) OR ANY STATE
SECURITIES LAWS.  NEITHER THIS
CERTIFICATE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

 

THE HOLDER OF THIS CERTIFICATE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH CERTIFICATE
ONLY (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE 1933 ACT, (B) TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE 1933 ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT, SUBJECT TO THE TRUST ADMINISTRATOR’S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING IN THE TRUST AGREEMENT.

 

NEITHER THIS CERTIFICATE, NOR ANY BENEFICIAL
INTEREST IN THIS CERTIFICATE, MAY BE TRANSFERRED, SOLD, PLEDGED, OR OTHERWISE
DISPOSED OF UNLESS PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS
TO THE TRUST ADMINISTRATOR (I) AN AFFIDAVIT STATING (A) THAT THE PROPOSED
TRANSFEREE IS NOT A “DISQUALIFIED ORGANIZATION” WITHIN THE MEANING OF SECTION
860E(E)(5) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) AND IS
NOT PURCHASING THE CERTIFICATE ON BEHALF OF A DISQUALIFIED ORGANIZATION, (B)
THAT NO PURPOSE OF SUCH TRANSFER IS TO AVOID OR IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX, (C) IN THE CASE OF A NON-U.S. PERSON, THAT THE PROPOSED
TRANSFEREE IS A NON-U.S. PERSON THAT HOLDS A RESIDUAL CERTIFICATE IN CONNECTION
WITH THE CONDUCT OF A TRADE OR BUSINESS WITHIN THE UNITED STATES AND HAS

 

 

FURNISHED THE TRANSFEROR AND THE TRUST
ADMINISTRATOR WITH AN EFFECTIVE INTERNAL REVENUE SERVICE FORM 4224 OR SUCCESSOR
FORM AT THE TIME AND IN THE MANNER REQUIRED BY THE CODE.

 

NO TRANSFER OF THIS CERTIFICATE SHALL BE
REGISTERED UNLESS THE PROSPECTIVE TRANSFEREE PROVIDES THE TRUST ADMINISTRATOR
WITH (A) A CERTIFICATION TO THE EFFECT THAT SUCH TRANSFEREE (1) IS NEITHER 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 INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),
(COLLECTIVELY, A “PLAN”) NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN NOR A
PERSON USING THE ASSETS OF ANY SUCH PLAN OR (2) IF THE
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING AND THE
TRANSFEREE IS AN INSURANCE COMPANY, SUCH TRANSFEREE IS PURCHASING SUCH
CERTIFICATE WITH FUNDS CONTAINED IN AN “INSURANCE COMPANY GENERAL ACCOUNT” (AS
SUCH TERM IS DEFINED IN SECTION V(e) OF THE PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60 (“PTCE 95-60”)) AND THE PURCHASE AND HOLDING OF SUCH
CERTIFICATE ARE COVERED UNDER SECTIONS I AND III OF PTCE 95-60; OR (B) AN
OPINION OF COUNSEL SATISFACTORY TO THE TRUST ADMINISTRATOR, AND UPON WHICH THE
TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR, THE TRUST ADMINISTRATOR AND THE
NIM INSURER SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE PURCHASE OR HOLDING
OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT RESULT IN ANY
NON-EXEMPT PROHIBITED TRANSACTIONS UNDER TITLE I OF ERISA OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR,
THE TRUST ADMINISTRATOR OR THE NIM INSURER TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF
COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUST FUND, THE TRUSTEE, THE MASTER
SERVICER, THE DEPOSITOR, THE TRUST ADMINISTRATOR OR THE NIM INSURER.

 

 

FIELDSTONE MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, CLASS R

 

Evidencing a beneficial interest in two pools consisting primarily of
certain conventional, first and second lien, adjustable and fixed rate, fully amortizing
and balloon, residential mortgage loans and other assets in a trust fund
established by:

 

FIELDSTONE MORTGAGE INVESTMENT CORPORATION

 

	
  Principal Interest: 100%

  	
   

  	
  Cut-off Date: [       ],
  2005

  
	
   

  	
   

  	
   

  
	
  NUMBER 1

  	
   

  	
   

  

 

 

THIS CERTIFIES THAT [                 ]
is the registered owner of the Percentage Interest evidenced by this
Certificate evidencing beneficial ownership in a Trust Fund consisting
primarily of (i) certain conventional, first and second lien, adjustable and
fixed rate, fully amortizing and balloon, residential mortgage loans acquired
by the Trust Fund (the “Mortgage Loans”), together with all collections
therefrom and proceeds thereof (excluding all scheduled payments of principal
and interest due on the Mortgage Loans on or before the Cut-off Date), (ii) any
REO Property, together with all collections thereon and proceeds thereof, (iii)
the Depositor’s rights under the Mortgage Loan Purchase Agreement (including
any security interest created thereby), (iv) the Depositor’s rights under any
Insurance Policies related to the Mortgage Loans, (v) amounts on deposit from
time to time in the Collection Account and the Basis Risk Reserve Fund and (vi)
amounts, if any, payable to the Trust Fund under any Interest Rate Cap
Agreement.

 

Distributions on this Certificate 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 [                 ],
2005 (each, a “Distribution Date”), to the Person in whose name this Certificate
is registered at the close of business on the last Business Day of the calendar
immediately preceding the month in which such Distribution Date occurs (or, in
the case of the first Distribution Date, the Closing Date) (the “Record Date”),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount, if any, required to be distributed to all the
Certificates of the Class represented by this Certificate.  All sums distributable on this Certificate
are payable in the coin or currency of the United States of America which at
the time of payment is legal tender for the payment of public and private
debts.

 

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

 

Unless the certificate of authentication hereon has been executed by or
on behalf of the Trust Administrator, whose name appears below by manual
signature, this Certificate shall not be entitled to any benefit under the
Trust Agreement or be valid for any purpose.

 

 

IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate
to be duly executed.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

TRUST ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Certificates referred to in the within-mentioned
Trust Agreement.

 

	
   

  	
  [                            ]

  
	
   

  	
   as Trust Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNATORY

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: [         ], 2005

  

 

 

FIELDSTONE MORTGAGE INVESTMENT TRUST 2005-[  ]

MORTGAGE-BACKED CERTIFICATE, SERIES 2005-[  ]

 

This Certificate is one of a duly authorized issue of certificates
designated as Fieldstone Mortgage Investment Trust 2005-[  ], Mortgage-Backed Certificates, Series
2005-[   ] (the “Certificates”), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Trust
Agreement dated as of [              ],
2005 (the “Trust Agreement”), among Fieldstone Mortgage Investment Corporation,
as Depositor, HSBC Bank USA, as Trustee, Wells Fargo Bank Minnesota, National
Association, as Trust Administrator and as Master Servicer and Fieldstone
Mortgage Company, as Seller, to which terms, provisions and conditions thereof
the Holder of this Certificate by virtue of the acceptance hereof assents, and
by which such Holder is bound.  The
Certificates consist of the following Classes: the Class 1-A, Class 2-Al, Class
2-A2, Class A-IO, Class M1, Class M2, Class M3, Class M4, Class M5, Class B,
Class X and Class R Certificates.

 

On each Distribution Date, the Total Distribution Amount for such date
will be distributed from the Collection Account to Holders of the Certificates
according to the terms of the Trust Agreement. 
All distributions or allocations made with respect to each Class of
Certificates on each Distribution Date shall be allocated among the outstanding
Certificates of such Class based on the Certificate Principal Amount or
Notional Amount (or Percentage Interest) of each such Certificate.

 

Distributions on this Certificate will be made by wire transfer in
immediately available funds to the Holder of record of this Certificate on the
immediately preceding Record Date to an account specified in writing by such
Holder to the Trustee at least five (5) Business Date prior to the first
Distribution Date to such Holder.  Wire
transfers will be made at the expense, of the Holder requesting the same by
deducting a wire transfer fee from the related distribution.  The final distribution on this Certificate
will be made, after due notice to the Holder of the pendency of such
distribution, only upon presentation and surrender of this Certificate at the
Corporate Trust Office (as defined below).

 

The Corporate Trust Office with respect to the presentment and
surrender of Certificates for the final distribution thereon and the
presentment and surrender of the Certificates for any other purpose is the
corporate trust office of the Trust Administrator at [             ].  The Trustee may designate another address
from time to time by notice to the Holders of the Certificates and the
Depositor.

 

The Trust Agreement permits the amendment thereof from time to time by
the Depositor, the Master Servicer, the Trust Administrator and the Trustee
with the consent of the Holders of not less than 66 2/3% of the Class Principal
Amount (or Percentage Interest) of each Class of Certificates affected thereby
and with the consent of the NIMS Insurer, for the purpose of adding, changing
or eliminating any provisions of any Trust Agreement or modifying the rights of
the Holders of the Certificates thereunder, as provided in the Trust
Agreement.  Any consent by the Holder of
this Certificate will be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate.  The Trust Agreement also permits the
amendment thereof, in certain limited

 

 

circumstances, with the prior written consent
of any NIMS Insurer but without the consent of the Holders of any of the
Certificates.

 

As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office of the Trust Administrator, duly endorsed
by, or 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 one or more new Certificates
of the same Class of authorized denominations evidencing the same initial
Certificate Principal Amount (or Percentage Interest) will be issued to the
designated transferee or transferees.  As
provided in the Trust Agreement and subject to certain limitations therein set
forth, this Certificate is exchangeable for new Certificates of the same Class
evidencing the same aggregate initial Certificate Principal Amount (or Notional
Amount) (or Percentage Interest) as requested by the Holder surrendering the
same.  No service charge will be made for
any such registration of transfer or exchange, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

 

The Class 1-A, Class 2-Al, Class 2-A2 and Class B Certificates are
issuable only in registered form, in minimum denominations of $25,000 in
initial Certificate Principal Amount and in integral multiples of $1 in excess
thereof registered in the name of the nominee of the Clearing Agency, which
shall maintain such Certificates through its book-entry facilities.  The Class A-IO Certificates are issuable only
in registered form, in minimum denominations of $100,000 in initial Notional
Amount and in integral multiples of $1 in excess thereof registered in the name
of the nominee of the Clearing Agency, which shall maintain such Certificates
through its book-entry facilities.  The
Class M1, Class M2, Class M3, Class M4 and Class M5 Certificates are issuable
only in registered form, in denominations of $100,000 and in integral multiples
of $1 in excess thereof registered in the name of the nominee of the Clearing
Agency, which shall maintain such Certificates through its book-entry
facilities.  Each of the Class X and
Class R Certificates will be issued as a single Certificate and maintained in
physical form.  The Class R Certificate
shall remain outstanding until the latest final Distribution Date for the
Certificates.

 

The Certificates are subject to optional prepayment in full in
accordance with the Trust Agreement on any Distribution Date after the date on
which the Aggregate Loan Balance is less than 10% of the Cut-off Date Balance,
for an amount as specified in the Trust Agreement.  In no event will the trust created by the
Trust Agreement continue beyond the expiration of 21 years from the death of
the last survivor of the descendants living at the date of the Trust Agreement
of a certain person named in the Trust Agreement.

 

The Depositor, the Trustee, the Trust Administrator and the Certificate
Registrar and any agent of any of them may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Trustee, the Trust Administrator nor the Certificate Registrar
nor any such agent shall be affected by any notice to the contrary.

 

As provided in the Trust Agreement, this Certificate and the Trust
Agreement shall be construed in accordance with and governed by the laws of the
State of New York, without regard

 

 

to the conflict of laws principles applied in
the State of New York.  In the event of
any conflict between the provisions of this Certificate and the Trust
Agreement, the Trust Agreement shall be controlling.  Any term used herein and not otherwise
defined shall be as defined in the Trust Agreement.

 

 

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 Certificate Register and does hereby irrevocably
constitute and appoint

 

	
   

  

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

 

I [we] further direct the Certificate 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 Exchanges Medallion Program. Notarized or witnessed
  signatures are not acceptable as guaranteed signatures.

  
							

 

 

DISTRIBUTION INSTRUCTIONS

 

The assignee should include the following for the information of the
Certificate 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.

 

 

EXHIBIT B-1

 

FORM OF INITIAL CERTIFICATION

 

[          ],
2005

 

[Name and Address of Trustee]

 

Fieldstone Mortgage Investment Corporation

11000 Broken Land Parkway, Suite 600

Columbia, Maryland 21044

 

[Name and Address of Subservicer]

 

Re:                               Trust Agreement dated as of [         ],
2005 (the “Trust Agreement”), by and among Fieldstone Mortgage Investment
Corporation, as Depositor, [         ],
as Trustee, Fieldstone Mortgage Company as Seller and [         ],
as Master Servicer and as Trust Administrator (in such capacities, the “Master
Servicer” or the “Trust Administrator”) with respect to Fieldstone Mortgage
Investment Trust 2005-[  ]

 

Ladies and Gentlemen:

 

In accordance with Section 2.02(a) of the Trust Agreement, subject to
review of the contents thereof, the undersigned, as Custodian, hereby certifies
that it has received the documents listed in Section 2 of the Custodial
Agreement (other than any document described in clause (h) of the second
paragraph of such Section) for each Mortgage File pertaining to each Mortgage
Loan listed on Schedule A, to the Trust Agreement, subject to any exceptions
noted on Schedule I hereto.

 

B-1-1

 

Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Trust
Agreement.  This Certificate is subject
in all respects to the terms of Section 2.02 of the Trust Agreement and the
Trust Agreement sections cross-referenced therein.

 

	
   

  	
  [                             ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

B-1-2

 

EXHIBIT B-2

 

FORM OF
INTERIM CERTIFICATION

 

[        ],
2005

 

[Name and Address of Trustee]

 

Fieldstone Mortgage Investment Corporation

11000 Broken Land Parkway, Suite 600

Columbia, Maryland 21044

 

[Name and Address of Subservicer]

 

Re:                               Trust Agreement dated as of [          ],
2005 (the “Trust Agreement”), by and among Fieldstone Mortgage Investment
Corporation, as Depositor, [          ],
as Trustee, Fieldstone Mortgage Company, as Seller, and [          ],
as Master Servicer and as Trust Administrator (in such capacities, the “Master
Servicer” or the “Trust Administrator”) with respect to Fieldstone Mortgage
Investment Trust 2005-[  ]

 

Ladies and Gentlemen:

 

In accordance with Section 2.02(b) of the Trust Agreement, the
undersigned, as Custodian, hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or listed on Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2 of the Custodial Agreement (other than
any document described in clause (h) of the second paragraph of such Section).

 

The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the documents identified above and has
determined that each such document appears regular on its face and appears to
relate to the Mortgage Loan identified in such document.

 

B-2-1

 

Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.  This Certificate is qualified in all respects
by the terms of said Trust Agreement including, but not limited to, Section
2.02(b).

 

	
   

  	
  [                             ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

B-2-2

 

EXHIBIT B-3

 

FORM OF FINAL CERTIFICATION

 

[        ],
2005

 

[Name and Address of Trustee]

 

Fieldstone Mortgage Investment Corporation

11000 Broken Land Parkway, Suite 600

Columbia, Maryland 21044

 

[Name and Address of Subservicer]

 

Re:                               Trust Agreement dated as of [        ],
2005 (the “Trust Agreement”), by and among Fieldstone Mortgage Investment
Corporation, as Depositor, [        ],
as Trustee and [        ], as Master
Servicer and as Trust Administrator (in such capacities, the “Master Servicer”
or the “Trust Administrator”) with respect to Fieldstone Mortgage Investment
Trust 20050-[  ]

 

Ladies and Gentlemen:

 

In accordance with Section 2.02(d) of the Trust Agreement, the
undersigned, as Custodian on behalf of the Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on Schedule I hereto) it (or its
custodian) has received the applicable documents listed in Section 2 of the
Custodial Agreement.

 

The undersigned hereby certifies that as to each Mortgage Loan
identified in the Mortgage Loan Schedule, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the documents listed above and has
determined that each such document appears to be complete and, based on an
examination of such documents, the information set forth in items (i) through
(v) of the definition of Mortgage Loan Schedule (as defined in the Custodial
Agreement) is correct.

 

B-3-1

 

Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement.  This Certificate is qualified in all respects
by the terms of said Trust Agreement.

 

	
   

  	
  [                             ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

B-3-2

 

EXHIBIT B-4

 

FORM OF ENDORSEMENT

 

Pay to the order of
[        ], as trustee (the “Trustee”)
under the Trust Agreement dated as of
[              ],
2005 by and among [        ]
Corporation, as Depositor, the Trustee, Fieldstone Mortgage Company, as Seller
and [        ], as Master Servicer and
as Trust Administrator (in such capacities, the “Master Servicer” or the “Trust
Administrator”) relating to Fieldstone Mortgage Investment Trust 2005-[  ],
without recourse.

 

	
   

  	
   

  	
   

  
	
   

  	
  [current
  signatory on note]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

B-4-1

 

EXHIBIT C

 

REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT

 

             
[     ], 200

 

[Name
and address of Custodian]

 

In connection with the
administration of the mortgages held by you as Trustee under a certain Trust
Agreement dated as of [         ],
2005 by and among Fieldstone Mortgage Investment Corporation, as Depositor,
you, as Trustee, Fieldstone Mortgage Company, as Seller,
[         ], as Master Servicer
and as Trust Administrator (in such capacities, the “Master Servicer” or the “Trust
Administrator”), (the “Trust Agreement”), the undersigned Servicer hereby
requests a release of the Mortgage File held by you as Trustee with respect to
the following described Mortgage Loan for the reason indicated below.

 

Mortgagor’s
Name:

 

Address:

 

Loan
No.:

 

Reason
for requesting file:

 

1. 
Mortgage Loan paid in full.  (The
Servicer hereby certifies that all amounts received in connection with the loan
have been or will be credited to the Collection Account pursuant to the Trust
Agreement.)

 

2.  The
Mortgage Loan is being foreclosed.

 

3. 
Mortgage Loan substituted.  (The
Servicer hereby certifies that a Qualifying Substitute Mortgage Loan has been
assigned and delivered to you along with the related Mortgage File pursuant to
the Trust Agreement.)

 

4. 
Mortgage Loan repurchased.  (The
Servicer hereby certifies that the Purchase Price has been credited to the
Collection Account pursuant to the Trust Agreement.)

 

5. 
Other.  (Describe)

 

The undersigned acknowledges
that the above Mortgage File will be held by the undersigned in accordance with
the provisions of the Trust Agreement and will be returned to you within ten (10) days
of our receipt of the Mortgage File, except if the Mortgage Loan has been paid
in full, or repurchased or substituted for a Qualifying Substitute Mortgage
Loan (in which case the Mortgage File will be retained by us permanently) and
except if the Mortgage Loan is being foreclosed (in which case the Mortgage File
will be returned when no longer required by us for such purpose).

 

C-1

 

Capitalized terms used
herein shall have the meanings ascribed to them in the Trust Agreement.

 

	
   

  	
   

  	
   

  
	
   

  	
  [Name of Servicer]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:
  Servicing Officer

  
					

 

C-2

 

EXHIBIT D-l

 

FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT
(TRANSFEREE)

 

 

	
  STATE
  OF

  	
  )

  	
   

  
	
   

  	
  )
  ss.:

  	
   

  
	
  COUNTY
  OF

  	
  )

  	
   

  

 

 

[NAME OF OFFICER],
                                    
being first duly sworn, deposes and says:

 

1.                                       That he [she] is [title of officer]
                                                 
of [name of Purchaser]
                                                                                                  
(the “Purchaser”), a
                                                 
[description of type of entity] duly organized and existing under the laws of
the [State
of                 ]
[United States], on behalf of which he [she] makes this affidavit.

 

2.                                       That the Purchaser’s Taxpayer Identification
Number is [          ].

 

3.                                       That the Purchaser is not a “disqualified
organization” within the meaning of Section 860E(e)(5) of the
Internal Revenue Code of 1986, as amended (the “Code”) and will not be a “disqualified
organization” as of [date of transfer], and that the Purchaser is not acquiring
a Residual Certificate (as defined in the Agreement) for the account of, or as
agent (including a broker, nominee, or other middleman) for, any person or
entity from which it has not received an affidavit substantially in the form of
this affidavit.  For these purposes, a “disqualified
organization” means the United States, any state or political subdivision
thereof, any foreign government, any international organization, any agency or
instrumentality of any of the foregoing (other than an instrumentality if all
of its activities are subject to tax and a majority of its board of directors
is not selected by such governmental entity), any cooperative organization furnishing
electric energy or providing telephone service to persons in rural areas as
described in Code Section 1381(a)(2)(C), any “electing large partnership”
within the meaning of Section 775 of the Code, or any organization (other
than a farmers’ cooperative described in Code Section 521) that is exempt
from federal income tax unless such organization is subject to the tax on
unrelated business income imposed by Code Section 511.

 

4.                                       That the Purchaser either (x) 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 (“Code”),
(collectively, a “Plan”) or a person acting on behalf of any such Plan or
investing the assets of any such Plan to acquire a Residual Certificate; (y) if
the Residual Certificate has been the subject of an ERISA-Qualifying
Underwriting, it is an insurance company that is purchasing the Certificate
with funds contained in an “insurance

 

D-1-1

 

company
general account” as defined in Section V(e) of Prohibited Transaction
Class Exemption (“PTCE”) 95-60 and the purchase and holding of the
Certificate are covered under Section I and III of PTCE 95-60; or (z)
herewith delivers to the Trust Administrator an opinion of counsel (a “Benefit
Plan Opinion”) satisfactory to the Trust Administrator, and upon which the
Trustee, the Master Servicer, the Trust Administrator, the Depositor and the
NIM Insurer shall be entitled to rely, to the effect that the purchase or
holding of such Residual Certificate by the Investor will not result in any
non-exempt prohibited transactions under Title I of ERISA or Section 4975
of the Code and will not subject the Trustee, the Depositor, the Master
Servicer, the Trust Administrator or the NIM Insurer to any obligation in
addition to those undertaken by such entities in the Trust Agreement, which
opinion of counsel shall not be an expense of the Trust Fund or any of the
above parties.

 

5.                                       That the Purchaser hereby acknowledges that
under the terms of the Trust Agreement (the “Agreement”) by and among
Fieldstone Mortgage Investment Corporation, as Depositor, [        ], as Trustee, Fieldstone Mortgage Company,
as Seller, [        ], as Master Servicer
and as Trust Administrator (in such capacities, the “Master Servicer” or the “Trust
Administrator”), no transfer of the Residual Certificate shall be permitted to
be made to any person unless the Depositor and Trustee have received a
certificate from such transferee containing the representations in paragraphs 3
and 4 hereof.

 

6.                                       That the Purchaser does not hold REMIC
residual securities as nominee to facilitate the clearance and settlement of
such securities through electronic book-entry changes in accounts of
participating organizations (such entity, a “Book-Entry Nominee”).

 

7.                                       That the Purchaser does not have the
intention to impede the assessment or collection of any federal, state or local
taxes legally required to be paid with respect to such Residual Certificate.

 

8.                                       That the Purchaser will not transfer a
Residual Certificate to any person or entity (i) as to which the Purchaser
has actual knowledge that the requirements set forth in paragraph 3, paragraph
6 or paragraph 10 hereof are not satisfied or that the Purchaser has reason to
believe does not satisfy the requirements set forth in paragraph 7 hereof, and (ii) without
obtaining from the prospective Purchaser an affidavit substantially in this
form and providing to the Trust Administrator a written statement substantially
in the form of Exhibit D-2 to the Agreement.

 

9.                                       That the Purchaser understands that, as the
holder of a Residual Certificate, the Purchaser may incur tax liabilities in
excess of any cash flows generated by the interest and that it intends to pay
taxes associated with holding such Residual Certificate as they become due.

 

10.                                 That the Purchaser (i) is not a Non-U.S.
Person or (ii) is a Non-U.S. Person that holds a Residual Certificate in
connection with the conduct of a trade or business

 

D-1-2

 

within
the United States and has furnished the transferor and the Trustee with an
effective Internal Revenue Service Form W-8ECI (Certificate of Foreign
Person’s Claim for Exemption From Withholding on Income Effectively Connected
With the Conduct of a Trade or Business in the United States) or successor form
at the time and in the manner required by the Code or (iii) is a Non-U.S.
Person that has delivered to both the transferor and the Trustee an opinion of
a nationally recognized tax counsel to the effect that the transfer of such
Residual Certificate to it is in accordance with the requirements of the Code
and the regulations promulgated thereunder and that such transfer of a Residual
Certificate will not be disregarded for federal income tax purposes.  “Non-U.S. Person” means an individual,
corporation, partnership or other person other than (i) a citizen or
resident of the United States; (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
state thereof, including for this purpose, the District of Columbia; (iii) an
estate that is subject to U.S. federal income tax regardless of the source of
its income; (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States trustees have authority to control all substantial decisions
of the trust; and, (v) to the extent provided in Treasury regulations,
certain trusts in existence on August 20, 1996 that are treated as United
States persons prior to such date and elect to continue to be treated as United
States persons.

 

11.                                 That the Purchaser agrees to such amendments
of the Trust Agreement as may be required to further effectuate the
restrictions on transfer of any Residual Certificate to such a “disqualified
organization,” an agent thereof, a Book-Entry Nominee, or a person that does
not satisfy the requirements of paragraph 7 and paragraph 10 hereof.

 

12.                                 That the Purchaser consents to the
designation of the Trust Administrator as its agent to act as “tax matters
person” of the Trust Fund pursuant to the Trust Agreement.

 

D-1-3

 

IN WITNESS WHEREOF, the
Purchaser has caused this instrument to be executed on its behalf, pursuant to
authority of its Board of Directors, by its [title of officer] this
          day of
                  
20  .

 

	
   

  	
   

  	
   

  
	
   

  	
  [name
  of Purchaser]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

 

Personally appeared before
me the above-named [name of officer]
                        ,
known or proved to me to be the same person who executed the foregoing instrument
and to be the [title of officer]
                               
of the Purchaser, and acknowledged to me that he [she] executed the same as his
[her] free act and deed and the free act and deed of the Purchaser.

 

Subscribed and sworn before
me this       day of
                           ,
20   .

 

	
  NOTARY
  PUBLIC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

COUNTY
OF

 

STATE
OF

 

My
commission expires the          day of
                        ,
20   .

 

 

D-1-4

 

EXHIBIT D-2

 

RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)

 

                  
[      ], 200

 

Re:                               Fieldstone Mortgage Investment Trust 2005-[  ]

 

                                         
(the “Transferor”) has reviewed the attached affidavit of
                                                     
(the “Transferee”), and has no actual knowledge that such affidavit is not true
and has no reason to believe that the information contained in paragraph 7
thereof is not true, and has no reason to believe that the Transferee has the intention
to impede the assessment or collection of any federal, state or local taxes
legally required to be paid with respect to a Residual Certificate.  In addition, the Transferor has conducted a
reasonable investigation at the time of the transfer and found that the
Transferee had historically paid its debts as they came due and found no
significant evidence to indicate that the Transferee will not continue to pay
its debts as they become due.

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

D-2-1

 

EXHIBIT E

 

ARTICLE XII LOST NOTE
AFFIDAVIT

 

I,
                                            ,
being duly sworn, do hereby state under oath that:

 

1.                                       I, as
                                            
of                                                           
(the “Company”), am authorized to make this Affidavit on behalf of the Company.

 

2.                                       The Company received the following described
mortgage note (the “Note”):

 

Loan No.:

Borrower(s):

Original Principal Amount:

 

from the Borrower(s) to
secure a Deed of Trust/Mortgage (the “Deed of Trust/Mortgage”) dated
                               
from the Borrower(s) to the Company.

 

3.                                       The Company represents and warrants that it
has not canceled, altered, assigned, or hypothecated the Note.

 

4.                                       The original Note, a true and correct copy of
which is attached hereto, was not located after a thorough and diligent search,
and based thereon, the Company declares the Note lost.

 

5.                                       This Affidavit is intended to be relied on by
[        ] and its successors and
assigns.

 

6.                                       The Company has assigned all of its right,
title and interest in the Note and the Deed of Trust/Mortgage to
[        ] and agrees immediately and
without further consideration to surrender the original Note to
[        ] or its successor and assigns
if such original Note ever comes into the Company’s possession, custody, or
power.

 

7.                                       The Company further agrees to indemnify and
hold harmless [        ] and its
successors and assigns from any and all loss, liability, costs, damages,
reasonable attorneys’ fees and expenses without limitation in connection with
or arising out of the representations, warranties, and agreements made in this
Affidavit and any claim of any nature made by any entity with respect to the
Note.

 

8.                                       The Company agrees and acknowledges that this
Affidavit may be presented as evidence of the Note, whether in any proceeding
or action with respect thereto or otherwise, and hereby authorizes such use of
this Affidavit.

 

9.                                       The representations, warranties, and
agreements herein shall bind the undersigned and its successors and assigns,
and shall inure to the benefit of
[        ] and its successors and
assigns.

 

E-1

 

EXECUTED
THIS          day of                         ,
2005 on behalf of

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  

 

 

	
  STATE
  OF

  	
  )

  	
   

  
	
   

  	
  )
  ss:

  	
   

  
	
  COUNTY
  OF

  	
  )

  	
   

  

 

 

On the
         day of
                        ,
2005, before me,                                 ,
a notary public in and for said State, personally appeared
                                ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized
capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.

 

WITNESS my hand and official
seal.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
   

  	
   

  
	
  My
  Commission Expires:

  	
   

  	
   

  	
   

  
					

 

E-2

 

EXHIBIT F

 

FORM OF RULE 144A TRANSFER CERTIFICATE

 

Re:                               Fieldstone Mortgage Investment Trust 2005-[  ]

 

Reference is hereby made to
the Trust Agreement dated as of
[          ], 2005 (the “Trust
Agreement”) by and among Fieldstone Mortgage Investment Corporation, as
Depositor, [      ], as Trustee, Fieldstone
Mortgage Company, as Seller, [      ], as Master
Servicer and as Trust Administrator (in such capacities, the “Master Servicer”
or the “Trust Administrator”). 
Capitalized terms used but not defined herein shall have the meanings
given to them in the Trust Agreement.

 

This letter relates to
$                 
initial Certificate Balance of Class      
Certificates which are held in the form of Definitive Certificates registered
in the name of
                              
(the “Transferor”).  The Transferor has
requested a transfer of such Definitive Certificates for Definitive
Certificates of such Class registered in the name of [insert name of
transferee].

 

In connection with such
request, and in respect of such Certificates, the Transferor hereby certifies
that such Certificates are being transferred in accordance with (i) the
transfer restrictions set forth in the Trust Agreement and the Certificates and
(ii) Rule 144A under the Securities Act to a purchaser that the
Transferor reasonably believes is a “qualified institutional buyer” within the
meaning of Rule 144A purchasing for its own account or for the account of
a “qualified institutional buyer,” which purchaser is aware that the sale to it
is being made in reliance upon Rule 144A, in a transaction meeting the
requirements of Rule 144A and in accordance with any applicable securities
laws of any state of the United States or any other applicable jurisdiction.

 

This certificate and the
statements contained herein are made for the benefit of the Trust
Administrator, the Placement Agent and the Depositor.

 

	
   

  	
   

  	
   

  
	
   

  	
  [Name
  of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
							

 

F-1

 

EXHIBIT G

 

FORM OF PURCHASER’S LETTER FOR

INSTITUTIONAL ACCREDITED INVESTORS

 

[         ], 2005

 

Dear
Sirs:

 

In connection with our
proposed purchase of
$                                  
principal amount of Fieldstone Mortgage Investment Trust 2005-[  ] (the “Privately Offered Certificates”) of
the Fieldstone Mortgage Investment Corporation (the “Depositor”), we confirm
that:

 

(1)                                  We understand that the Privately Offered
Certificates have not been, and will not be, registered under the Securities
Act of 1933, as amended (the “Securities Act”), and may not be sold except as
permitted in the following sentence.  We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell any Privately Offered
Certificates within two years of the later of the date of original issuance of
the Privately Offered Certificates or the last day on which such Privately
Offered Certificates are owned by the Depositor or any affiliate of the Depositor
(which includes the Placement Agent) we will do so only (A) to the
Depositor, (B) to “qualified institutional buyers” (within the meaning of Rule 144A
under the Securities Act) in accordance with Rule 144A under the
Securities Act (“QIBs”), (C) pursuant to the exemption from registration
provided by Rule 144 under the Securities Act, or (D) to an
institutional “accredited investor” within the meaning of Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act that is not
a QIB (an “Institutional Accredited Investor”) which, prior to such transfer,
delivers to the Trust Administrator under the Trust Agreement dated as of
[        ], 2005 by and among the
Depositor, [        ], as Master Servicer
and as Trust Administrator (in such capacities, the “Master Servicer” or the “Trust
Administrator”), Fieldstone Mortgage Company, as Seller (the “Seller”) and
[        ], as Trustee (the “Trustee), a
signed letter in the form of this letter; and we further agree, in the
capacities stated above, to provide to any person purchasing any of the
Privately Offered Certificates from us a notice advising such purchaser that
resales of the Privately Offered Certificates are restricted as stated herein.

 

(2)                                  We understand that, in connection with any
proposed resale of any Privately Offered Certificates to an Institutional
Accredited Investor, we will be required to furnish to the Trustee, the Trust
Administrator and the Depositor a certification from such transferee in the
form hereof to confirm that the proposed sale is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.  We
further understand that the Privately Offered Certificates purchased by us will
bear a legend to the foregoing effect.

 

(3)                                  We are acquiring the Privately Offered
Certificates for investment purposes and not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities
Act.  We have such knowledge and
experience in financial and business

 

G-1

 

matters
as to be capable of evaluating the merits and risks of our investment in the
Privately Offered Certificates, and we and any account for which we are acting
are each able to bear the economic risk of such investment.

 

(4)                                  We are an Institutional Accredited Investor
and we are acquiring the Privately Offered Certificates purchased by us for our
own account or for one or more accounts (each of which is an Institutional
Accredited Investor) as to each of which we exercise sole investment
discretion.

 

(5)                                  We have received such information as we deem
necessary in order to make our investment decision.

 

(6)                                  If we are acquiring ERISA-Restricted
Certificates, we understand that in accordance with ERISA, the Code and the
Exemption, no Plan and no person acting on behalf of such a Plan may acquire
such Certificate except in accordance with Section 3.03(d) of the
Trust Agreement.

 

Terms used in this letter
which are not otherwise defined herein have the respective meanings assigned
thereto in the Trust Agreement.

 

You, the Trust Administrator
and the Depositor are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Purchaser]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

G-2

 

EXHIBIT H

 

FORM OF ERISA TRANSFER AFFIDAVIT

 

 

	
  STATE
  OF NEW YORK

  	
  )

  	
   

  
	
   

  	
  )
  ss:

  	
   

  
	
  COUNTY
  OF NEW YORK

  	
  )

  	
   

  

 

 

The undersigned, being first
duly sworn, deposes and says as follows:

 

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 (x) 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
Internal Revenue Code of 1986, as amended (the “Code”), (collectively, a “Plan”)
or a person acting on behalf of any such Plan or investing the assets of any
such Plan; (y) if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, is an insurance company that is purchasing the Certificate with
funds contained in an “insurance company general account” as defined in Section V(e) of
Prohibited Transaction Class Exemption (“PTCE”) 95-60 and the purchase and
holding of the Certificate are covered under Section I and III of PTCE 95-60;
or (z) herewith delivers to the Trust Administrator an opinion of counsel (a “Benefit
Plan Opinion”) satisfactory to the Trust Administrator, and upon which the
Trustee, the Master Servicer, the Trust Administrator, the Depositor and any
NIMS Insurer shall be entitled to rely, to the effect that the purchase or
holding of such Certificate by the Investor will not constitute or result in
any non-exempt prohibited transactions under Title I of ERISA or Section 4975
of the Code and will not subject the Trustee, the Master Servicer, the Trust
Administrator, the Depositor or any NIMS Insurer to any obligation in addition
to those undertaken by such entities in the Trust Agreement, which opinion of
counsel shall not be an expense of the Trust Fund or the above parties.

 

3.                                       The Investor hereby acknowledges that under
the terms of the Trust Agreement (the “Agreement”) by and among Fieldstone
Mortgage Investment Corporation, as Depositor,
[         ], as Trustee,
Fieldstone Mortgage Company, as Seller,
[         ], as Master Servicer
and as Trust Administrator (in such capacities, the “Master Servicer” or the “Trust
Administrator”), dated as of
[         ], 2005, no transfer of
the ERISA-Restricted Certificates shall be permitted to be made to any person
unless the Depositor, the Trust Administrator and Trustee have received a
certificate from such transferee in the form hereof.

 

H-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   .

  

 

H-2

 

EXHIBIT I

 

MONTHLY REMITTANCE ADVICE

 

I-1

 

EXHIBIT J

 

MONTHLY ELECTRONIC DATA TRANSMISSION

 

J-1

 

EXHIBIT K

 

CUSTODIAL AGREEMENT

 

K-1Exhibit 4.6

 

 

 

[                                                  ],

 

as Subservicer

 

FIELDSTONE MORTGAGE COMPANY,

 

as Seller

 

FIELDSTONE SERVICING CORP.,

 

as Servicer

 

and

 

[                                                  ],

 

as Master Servicer

 

 

 

Fieldstone Mortgage Investment
Corporation

Fieldstone Mortgage Investment Trust 2005-[  ]

Mortgage-Backed Certificates, Series 2005-[  ]

 

SECURITIZATION SERVICING
AGREEMENT

 

Dated as of [              ],
2005

 

 

 

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE I.

  

  DEFINITIONS

  
	
   

  	
   

  
	
  ARTICLE II.

  

  OWNER’S ENGAGEMENT OF SERVICER TO PERFORM SERVICING RESPONSIBILITIES

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Contract for Servicing; Possession of
  Servicing Files

  	
   

  
	
  Section 2.02.

  	
  Books and Records

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III.

  

  SERVICING OF THE MORTGAGE LOANS

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Servicer and Subservicer to Service

  	
   

  
	
  Section 3.02.

  	
  Collection and Liquidation of Mortgage
  Loans

  	
   

  
	
  Section 3.03.

  	
  Establishment of and Deposits to Custodial
  Account

  	
   

  
	
  Section 3.04.

  	
  Permitted Withdrawals From Custodial
  Account

  	
   

  
	
  Section 3.05.

  	
  Establishment of and Deposits to Escrow
  Account

  	
   

  
	
  Section 3.06.

  	
  Permitted Withdrawals From Escrow Account

  	
   

  
	
  Section 3.07.

  	
  Notification of Adjustments

  	
   

  
	
  Section 3.08.

  	
  [Reserved.]

  	
   

  
	
  Section 3.09.

  	
  Payment of Taxes, Insurance and Other
  Charges

  	
   

  
	
  Section 3.10.

  	
  Protection of Accounts

  	
   

  
	
  Section 3.11.

  	
  Maintenance of Hazard Insurance

  	
   

  
	
  Section 3.12.

  	
  Maintenance of Mortgage Impairment Insurance

  	
   

  
	
  Section 3.13.

  	
  Maintenance of Fidelity Bond and Errors and Omissions Insurance

  	
   

  
	
  Section 3.14.

  	
  Inspections

  	
   

  
	
  Section 3.15.

  	
  Restoration of Mortgaged Property

  	
   

  
	
  Section 3.16.

  	
  [Reserved.]

  	
   

  
	
  Section 3.17.

  	
  Title, Management and Disposition of REO Property

  	
   

  
	
  Section 3.18.

  	
  Real Estate Owned Reports

  	
   

  
	
  Section 3.19.

  	
  Liquidation Reports

  	
   

  
	
  Section 3.20.

  	
  Reports of Foreclosures and Abandonments of Mortgaged Property

  	
   

  
	
  Section 3.21.

  	
  Prepayment Charges

  	
   

  
	
  Section 3.22.

  	
  Compliance with Safeguarding Customer Information Requirements

  	
   

  

 

i

 

	
  ARTICLE IV.

  

  PAYMENTS TO OWNER

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Remittances

  	
   

  
	
  Section 4.02.

  	
  Statements to Seller

  	
   

  
	
  Section 4.03.

  	
  Monthly Advances by Servicer

  	
   

  
	
  Section 4.04.

  	
  Due Dates Other Than the First of the Month

  	
   

  
	
  Section 4.05.

  	
  Credit Reporting

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V.

  

  GENERAL SERVICING PROCEDURES

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Transfers of Mortgaged Property

  	
   

  
	
  Section 5.02.

  	
  Satisfaction of Mortgages and Release of Mortgage Files

  	
   

  
	
  Section 5.03.

  	
  Servicing Compensation

  	
   

  
	
  Section 5.04.

  	
  Annual Audit Report

  	
   

  
	
  Section 5.05.

  	
  Annual Compliance Certifications

  	
   

  
	
  Section 5.06.

  	
  Inspection

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  

  REPRESENTATIONS, WARRANTIES AND AGREEMENTS

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Representations, Warranties and Agreements of the Servicer

  	
   

  
	
  Section 6.02.

  	
  Representations, Warranties and Agreements of the Subservicer

  	
   

  
	
  Section 6.03.

  	
  Remedies for Breach of Representations and Warranties of the Servicer
  and the Subservicer

  	
   

  
	
  Section 6.04.

  	
  Additional Indemnification by the Servicer

  	
   

  
	
  Section 6.05.

  	
  Additional Indemnification by the Subservicer

  	
   

  
	
  Section 6.06.

  	
  Indemnification with Respect to Certain Taxes and Loss of REMIC
  Status

  	
   

  
	
  Section 6.07.

  	
  [Reserved.]

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  

  THE SERVICER AND THE SUBSERVICER

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Merger or Consolidation of the Servicer

  	
   

  
	
  Section 7.02.

  	
  Limitation on Liability of the Servicer and Others

  	
   

  
	
  Section 7.03.

  	
  Limitation on Resignation and Assignment by the Servicer

  	
   

  
	
  Section 7.04.

  	
  Merger or Consolidation of the Subservicer

  	
   

  
	
  Section 7.05.

  	
  Limitation on Liability of the Subservicer and Others

  	
   

  
	
  Section 7.06.

  	
  Limitation on Resignation and Assignment by the Subservicer

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  

  TERMINATION

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Termination for Cause

  	
   

  

 

ii

 

	
  ARTICLE IX.

  

  MISCELLANEOUS PROVISIONS

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Successor to the Servicer

  	
   

  
	
  Section 9.02.

  	
  Successor to the Subservicer

  	
   

  
	
  Section 9.03.

  	
  Costs

  	
   

  
	
  Section 9.04.

  	
  Protection of Confidential Information

  	
   

  
	
  Section 9.05.

  	
  Notices

  	
   

  
	
  Section 9.06.

  	
  Severability Clause

  	
   

  
	
  Section 9.07.

  	
  No Personal Solicitation

  	
   

  
	
  Section 9.08.

  	
  Counterparts

  	
   

  
	
  Section 9.09.

  	
  Place of Delivery and Governing Law

  	
   

  
	
  Section 9.10.

  	
  Further Agreements

  	
   

  
	
  Section 9.11.

  	
  Intention of the Parties

  	
   

  
	
  Section 9.12.

  	
  Successors and Assigns; Assignment of Servicing Agreement

  	
   

  
	
  Section 9.13.

  	
  Assignment by the Seller

  	
   

  
	
  Section 9.14.

  	
  Amendment

  	
   

  
	
  Section 9.15.

  	
  Waivers

  	
   

  
	
  Section 9.16.

  	
  Exhibits

  	
   

  
	
  Section 9.17.

  	
  Intended Third Party Beneficiaries

  	
   

  
	
  Section 9.18.

  	
  General Interpretive Principles

  	
   

  
	
  Section 9.19.

  	
  Reproduction of Documents

  	
   

  

 

iii

 

	
  EXHIBITS

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  MORTGAGE LOAN SCHEDULE

  	
   

  
	
  EXHIBIT B

  	
  CUSTODIAL ACCOUNT LETTER AGREEMENT

  	
   

  
	
  EXHIBIT C

  	
  ESCROW ACCOUNT LETTER AGREEMENT

  	
   

  
	
  EXHIBIT D-1

  	
  FORM OF MONTHLY REMITTANCE ADVICE

  	
   

  
	
  EXHIBIT D-2

  	
  STANDARD MONTHLY DEFAULTED LOAN REPORT

  	
   

  
	
  EXHIBIT E

  	
  FORM OF TRUST AGREEMENT

  	
   

  
	
  EXHIBIT F

  	
  FORM OF CERTIFICATION TO BE PROVIDED
  TO THE DEPOSITOR, THE TRUSTEE AND THE MASTER SERVICER BY THE SUBSERVICER

  	
   

  
	
  EXHIBIT G

  	
  POWER OF ATTORNEY

  	
   

  

 

iv

 

This SECURITIZATION SERVICING AGREEMENT (this “Agreement”), entered
into as of the [    ] day of [             ], 2005, by and among FIELDSTONE
MORTGAGE COMPANY, a Maryland corporation (“FMC”), as seller (in such
capacities, the “Servicer” and the “Seller”, respectively), FIELDSTONE
SERVICING CORP., as servicer (the “Servicer”),
[                            ]
(“[                            ]”),
as subservicer (the “Subservicer”) and
[                            ],
a [                            ],
as master servicer (the “Master Servicer”), and acknowledged by
[                            ],
as trustee (the “Trustee”) under the Trust Agreement (as defined herein),
recites and provides as follows:

 

W
I T N E S S E T H:

 

WHEREAS, the Seller has conveyed and assigned all of its rights, title
and interest with respect to certain conventional, fixed and adjustable rate,
residential mortgage loans identified in Schedule A hereto (the “Mortgage
Loans”) on a servicing-retained basis to Fieldstone Mortgage Investment
Corporation (the “Depositor”) under a mortgage loan purchase agreement dated as
of
[                            ],
2005 (the “Mortgage Loan Purchase Agreement”), between the Seller and the
Depositor, and the Depositor in turn has conveyed the Mortgage Loans to
[                            ]
(the “Trustee”) under a trust agreement dated as of
[                            ],
2005 (the “Trust Agreement”), among the Trustee, the Depositor, the Seller, the
Master Servicer and [                            ],
as Trust Administrator (in such capacity, the “Trust Administrator”);

 

WHEREAS, the Seller desires that the Servicer service the Mortgage
Loans upon such transfer to the Depositor pursuant to this Agreement, and the
Servicer has agreed to do so;

 

WHEREAS, the Servicer and the Subservicer have agreed that the
Subservicer shall service the Mortgage Loans beginning on or about
[                            ],
2005 pursuant to this Agreement;

 

WHEREAS, the Master Servicer shall be obligated under the Trust
Agreement, among other things, to supervise the servicing of the Mortgage Loans
on behalf of the Trustee, and shall have the right, under certain
circumstances, to terminate the rights and obligations of the Servicer and the
Subservicer under this Servicing Agreement upon the occurrence and continuance
of an Event of Default as provided herein;

 

WHEREAS, multiple classes of certificates (the “Certificates”),
including the Class X Certificate, will be issued on the Closing Date
pursuant to the Trust Agreement and Fieldstone Mortgage Company or a nominee
thereof is expected to be the initial registered holder of Class X
Certificates;

 

WHEREAS, subsequent to the Closing Date, Fieldstone Mortgage Company
may convey all of its rights, title and interest in and to the Class X
Certificates and all payments and all other proceeds received thereunder to an
owner trust or special purpose corporation in which it will hold the sole
equity interest, which trust will issue net interest margin securities (“NIM
Securities”) through an indenture trust, with such NIM Securities secured, in
part, by the payments on such Certificates (the “NIMS Transaction”);

 

 

WHEREAS, one or more insurers (collectively, the “NIMS Insurer”) may
each issue one or more insurance policies guaranteeing certain payments under
the NIM Securities to the extent issued pursuant to the indenture in the NIMS
Transaction;

 

WHEREAS, in the event there may be two or more individual insurers it
is intended that the rights extended to the NIMS Insurer pursuant to this
Agreement be allocated among two or more individual insurers that issue
insurance policies in connection with the NIMS Transaction through a NIMS
Insurance Agreement by and among such insurers and the parties hereto; and

 

WHEREAS, the Seller, the Servicer and the Subservicer acknowledge and
agree that the Seller will assign all of its rights and delegate all of its
obligations hereunder to the Trustee, and that each reference herein to the
Seller is intended, unless otherwise specified, to mean the Seller or the
Trustee, as assignee, whichever is the owner of the Mortgage Loans from time to
time.

 

NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Seller, the Master Servicer, the
Servicer and the Subservicer hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

The following terms are defined as follows:

 

Agreement: 
This Securitization Servicing Agreement and all amendments hereof and
supplements hereto.

 

Ancillary Income:  All income derived from the Mortgage Loans,
excluding Servicing Fees and Prepayment Charges attributable to the Mortgage
Loans and other amounts treated as payment proceeds of the Mortgage Loans,
including but not limited to, late charges, fees received with respect to
checks or bank drafts returned by the related bank for non-sufficient funds,
assumption fees, optional insurance administrative fees and all other
incidental fees and charges.

 

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

 

Assignment of Mortgage:  An assignment of the Mortgage, notice of
transferor equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to
reflect the transfer of the Mortgage to the party indicated therein.

 

2

 

Business Day: 
Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions in the States of New York,
Arizona, California, Maryland or Minnesota are authorized or obligated by law
or executive order to be closed.

 

Certificateholder:  The meaning set forth in the Trust Agreement.

 

Certificates: 
Any or all of the Certificates issued pursuant to the Trust Agreement.

 

Closing Date: 
[                            ],
2005.

 

Code: 
The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.

 

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

 

Condemnation Proceeds:  All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan documents.

 

Custodial Account:  The separate account or accounts created and
maintained pursuant to Section 3.03.

 

Custodial Agreement:  The custodial agreement relating to the
custody of certain of the Mortgage Loans, between the Custodian and the
Trustee, as acknowledged by the Servicer and the Subservicer, dated as of
[                            ],
2005.

 

Custodian: 
[                            ]
and its respective successors and assigns.

 

Cut-off Date: 
[                            ],
2005.

 

Depositor: 
Fieldstone Mortgage Investment Corporation, or any successor in
interest.

 

Determination Date:  With respect to each Remittance Date, the
15th day of the month in which such Remittance Date occurs, or, if such 15th
day is not a Business Day, the next succeeding Business Day.

 

Distressed Mortgage Loan:  Not applicable.

 

Distribution Date:  Commencing in
[                            ],
2005, the 25th day of each month or, if such day is not a Business Day, the
next succeeding Business Day.

 

3

 

Due Date: 
The day of the calendar month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace. 
Pursuant to Section 4.04, with respect to any Mortgage Loans for
which payment from the Mortgagor is due on a day other than the first day of
the month, such Mortgage Loans will be treated as if the Monthly Payment is due
on the first day of the immediately succeeding month.

 

Eligible Investments:  Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than three days prior to the Remittance Date in each month:

 

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

 

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

 

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

 

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

 

4

 

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

 

(vi)          a
Qualified GIC (as defined in the Trust Agreement);

 

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

 

(viii)        any
other demand, money market, common trust fund or time deposit or obligation, or
interest-bearing or other security or investment, (A) rated in the highest
rating category by each Rating Agency or (B) that is acceptable to the
NIMS Insurer and would not adversely affect the then current rating by any
Rating Agency then rating the Certificates or the NIMS Securities.  Such investments in this subsection (viii) may
include money market mutual funds or common trust funds, including any fund for
which the Trustee, the Trust Administrator, the Master Servicer or an affiliate
thereof serves as an investment advisor, administrator, shareholder servicing
agent, and/or custodian or subcustodian, notwithstanding that (x) the Trustee,
the Master Servicer or an affiliate thereof charges and collects fees and
expenses from such funds for services rendered, (y) the Trustee, the Master
Servicer or an affiliate thereof charges and collects fees and expenses for
services rendered pursuant to this Agreement, and (z) services performed for
such funds and pursuant to this Agreement may converge at any time;

 

provided, however,
that no such instrument shall be an Eligible Investment if such instrument
evidences either (i) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.

 

Environmental Problem Property:  A Mortgaged Property or REO Property that is
in violation of any environmental law, rule or regulation.

 

Errors and Omissions Insurance:  Errors and Omissions Insurance to be
maintained by the Servicer in accordance with Section 3.13.

 

Escrow Account:  The separate account or accounts operated and
maintained pursuant to Section 3.05.

 

Escrow Payments:  With respect to any Mortgage Loan, the
amounts constituting ground rents, taxes, assessments, water rates, sewer
rents, municipal charges, mortgage insurance premiums, fire and hazard
insurance premiums, condominium charges, and any other payments required to be
escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any
other document.

 

5

 

Event of Default:  Any event set forth in Section 8.01.

 

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

 

Fidelity Bond: 
A fidelity bond to be maintained by the Servicer in accordance with Section 3.13.

 

Fitch: 
Fitch Ratings or any successor in interest.

 

FMC: 
Fieldstone Mortgage Company, a Maryland corporation, or any successor in
interest.

 

Holder: 
The meaning set forth in the Trust Agreement.

 

Insurance Proceeds:  With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property, if applicable, including the proceeds of any hazard or flood
insurance policy.

 

Liquidation Proceeds:  Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee’s sale, foreclosure sale or
otherwise, or the sale of the related REO Property, if the Mortgaged Property
is acquired in satisfaction of the Mortgage Loan.

 

Master Servicer: 
[                            ]
or any successor in interest, or if any successor master servicer shall be
appointed as provided in the Trust Agreement, then such successor master
servicer.

 

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

 

Master Servicing Fee Rate: 
[                            ]%
per annum.

 

Monthly Advance:  With respect to each Remittance Date and each
Mortgage Loan, an amount equal to the Monthly Payment (with the interest
portion of such Monthly Payment adjusted to the Mortgage Loan Remittance Rate)
that was due on the Mortgage Loan on the Due Date in the related Collection
Period, and that (i) was delinquent at the close of business on the
related Determination Date and (ii) was not the subject of a previous
Monthly Advance, but only to the extent that such amount is expected, in the
reasonable judgment of the Servicer or the Subservicer, to be recoverable from
collections or other recoveries in respect of such Mortgage Loan.

 

Monthly Payment:  The scheduled monthly payment of principal
and interest on a Mortgage Loan.

 

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

 

6

 

Mortgage: 
The mortgage, deed of trust or other instrument securing a Mortgage
Note, which creates a first lien on an unsubordinated estate in fee simple in
real property securing the Mortgage Note.

 

Mortgage Impairment Insurance Policy:  A mortgage impairment or blanket hazard
insurance policy to be maintained by the Servicer in accordance with Section 3.12.

 

Mortgage Interest Rate:  The annual rate of interest borne on a
Mortgage Note.

 

Mortgage Loan: 
An individual mortgage loan which is the subject of this Agreement, each
mortgage loan subject to this Agreement being identified on the related
Mortgage Loan Schedule, which Mortgage Loan includes, without limitation, the
Mortgage Loan documents, the Monthly Payments, Principal Prepayments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds,
and all other rights, benefits, proceeds and obligations arising from or in
connection with such Mortgage Loan.

 

Mortgage Loan Remittance Rate:  With respect to each Mortgage Loan, the
annual rate of interest remitted to the Master Servicer, which shall be equal
to the Mortgage Interest Rate minus the Master Servicing Fee Rate and the
Servicing Fee Rate.

 

Mortgage Loan Schedule:  A schedule of the Mortgage Loans
attached hereto as Exhibit A setting forth information with respect to
such Mortgage Loans as agreed to by the Seller, the Servicer, the Subservicer
and the Master Servicer, including but not limited to a Prepayment Charge
Schedule.

 

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

 

Mortgaged Property:  The real property securing repayment of the
debt evidenced by a Mortgage Note.

 

Mortgagor: 
The obligor on a Mortgage Note.

 

NIM Securities:  As defined in the eighth Recital to this
Agreement.

 

NIMS Insurer: 
As defined in the ninth Recital to this Agreement.

 

NIMS Transaction:  As defined in the eighth Recital to this
Agreement.

 

Nonrecoverable Advance:  Any Servicing Advance or Monthly Advance
previously made or proposed to be made in respect of a Mortgage Loan by the
Servicer or Subservicer which, in the reasonable discretion of the Servicer or
Subservicer, as applicable, will not or, in the case of a proposed Servicing
Advance or Monthly Advance, would not, ultimately be recoverable by the
Servicer or Subservicer from the related Mortgagor, related Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds or otherwise.  The determination by the Servicer or
Subservicer, as applicable, that all or a portion of a Servicing Advance or
Monthly Advance would be a Nonrecoverable Advance shall be evidenced by an
Officer’s Certificate

 

7

 

delivered to the Master Servicer and the NIMS
Insurer setting forth such determination and a reasonable explanation thereof.

 

Officer’s Certificate:  A certificate signed a Vice President or an
assistant Vice President and by an Assistant Treasurers or Assistant Secretary
of the Servicer or the Subservicer, and delivered to the Seller, the Master
Servicer, Trustee and/or the NIMS Insurer as required by this Agreement.

 

Opinion of Counsel:  A written opinion of counsel, who may be an
employee of the Servicer or the Subservicer, reasonably acceptable to the
Seller, the Trustee, the Master Servicer and/or the NIMS Insurer, but which
must be an independent outside counsel with respect to any such opinion of
counsel concerning all federal income tax matters.

 

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

 

Prepayment Charge:  With respect to any Mortgage Loan and
Remittance Date, the charges or premiums, if any, due in connection with a full
or partial prepayment of such Mortgage Loan during the immediately preceding
Principal Prepayment Period in accordance with the terms thereof.

 

Prepayment Interest Shortfall Amount:  With respect to any Remittance Date, for each
Mortgage Loan that was subject to a Principal Prepayment in full or in part
during the related Principal Prepayment Period (other than Principal
Prepayments relating to a repurchase of the Mortgage Loan by the Seller or any
other Person), which Principal Prepayment was applied to such Mortgage Loan
prior to such Mortgage Loan’s Due Date in the succeeding Principal Prepayment
Period, the amount of interest (net the related Servicing Fee for Principal
Prepayments in full only) that would have accrued on the amount of such
Principal Prepayment during the period commencing on the date as of which such
Principal Prepayment was applied to such Mortgage Loan and ending on the last
day of the related Principal Prepayment Period.

 

Prime Rate: 
The prime rate published from time to time, as published as the average
rate in The Wall Street Journal (Northeast Edition).

 

Principal Prepayment:  Any payment or other recovery of principal on
a Mortgage Loan, including any payment or other recovery of principal in
connection with repurchase of a Mortgage Loan by the Seller, the Servicer, the
Subservicer, the NIMS Insurer or any other Person, which is received in advance
of its scheduled Due Date, including any Prepayment Charge or premium thereon
and which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the
month of prepayment.

 

Principal Prepayment Period:  With respect to any Remittance Date and any
full or partial Principal Prepayment, the calendar month immediately preceding
the month of such Remittance Date.

 

Property Charges:  As defined in Section 3.09(a) herein.

 

8

 

Purchase Price:  With respect to any REO Property to be
purchased by the NIMS Insurer pursuant to Section 6.05, an amount equal to
the sum of (i) 100% of the principal balance thereof as of the date of
purchase, (ii) accrued interest on such principal balance at the
applicable Mortgage Interest Rate in effect from time to time to the due date
as to which interest was last covered by a payment by the Mortgagor or a
Monthly Advance by the Servicer, the Subservicer or Master Servicer and (iii) any
unreimbursed Servicing Advances, Monthly Advances and any unpaid Servicing Fees
and Master Servicing Fees allocable to such REO Property.

 

Qualified Depository:  Any of (i) a federal or state-chartered
depository institution the accounts of which are insured by the FDIC and whose
commercial paper, short-term debt obligations or other short-term deposits are
rated at least “A-1” by S&P if the deposits are to be held in the account
for less than 30 days, or whose long-term unsecured debt obligations are rated
at least “AA” by S&P if the deposits are to be held in the account for more
than 30 days, or (ii) the corporate trust department of a federal or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulations Section 9.10(b), which, in either case, has corporate trust
powers, acting in its fiduciary capacity, or (iii) the Seller.

 

Qualified Insurer:  A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by Fannie Mae and Freddie Mac.

 

Rating Agency: 
Each of Fitch, Moody’s and S&P or their successors.  If such agencies or their successors are no
longer in existence, “Rating Agencies” shall be such nationally recognized
statistical rating agencies, or other comparable person, agreed upon and
designated by the Seller, notice of which designation shall be given to the
Trustee, the NIMS Insurer, the Master Servicer, the Servicer and the
Subservicer.

 

REMIC: 
A “real estate mortgage investment conduit” within the meaning of Section 860D
of the Code.

 

Remittance Date:  With respect to each Distribution Date, the
18th day (or if such 18th day is not a Business Day, the first Business Day
immediately following) of the month in which such Distribution Date occurs,
commencing in
[                            ],
2005.

 

REO Disposition:  The final sale by the Servicer or the
Subservicer of any REO Property.

 

REO Disposition Proceeds:  All amounts received with respect to an REO
Disposition pursuant to Section 3.17.

 

REO Property: 
A Mortgaged Property acquired by the Servicer on behalf of the Trustee
through foreclosure or by deed in lieu of foreclosure, as described in Section 3.17.

 

Representing Party:  Each of the Servicer and the Subservicer
making the representations and warranties under Section 6.01 and 6.02,
respectively.

 

9

 

Sarbanes Certifying Party:  Any person who provides a certification
pursuant to the Sarbanes-Oxley Act of 2002 on behalf of the Trust Fund.

 

Trust Administrator: 
[                            ]
or its successor in interest.

 

Seller: 
FMC.

 

Servicer: 
FMC or its successor in interest or assigns or any successor to the
Servicer under this Agreement as herein provided.

 

Servicing Advances:  All customary, reasonable and necessary “out
of pocket” costs and expenses (including reasonable attorneys’ fees and
disbursements) incurred in the performance by each of the Servicer or the
Subservicer of its servicing obligations, including, but not limited to, the
cost of (a) the preservation, restoration and protection of the Mortgaged
Property, (b) any enforcement or administrative or judicial proceedings,
including foreclosures, (c) the management and liquidation of the
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage, (d) taxes, assessments, water rates, sewer rents and other
charges which are or may become a lien upon the Mortgaged Property, fire and
hazard insurance coverage and repayment of senior liens and (e) any losses
sustained by the Servicer or the Subservicer with respect to the liquidation of
the Mortgaged Property.  Neither the
Servicer nor the Subservicer shall have any obligation to make any Servicing
Advances if the Servicer or the Subservicer, as applicable, determines that
such Servicing Advances are or would constitute a Nonrecoverable Advance.

 

Servicing Fee: 
With respect to each Mortgage Loan, an amount equal to one-twelfth the
product of (a) the Servicing Fee Rate and (b) the outstanding
principal balance of such Mortgage Loan as of the first day of the related
Collection Period.  The Servicing Fee is
payable solely from the interest portion (including recoveries with respect to
interest from Liquidation Proceeds to the extent permitted by Section 3.02
of this Agreement) of such Monthly Payment collected by the Servicer or the
Subservicer, as applicable, or as otherwise provided under this Agreement.

 

Servicing Fee Rate: 
[         ]% per annum.

 

Servicing File:  The items pertaining to a particular Mortgage
Loan including, but not limited to, the computer files, data disks, books,
records, data tapes, notes, and all additional documents generated as a result
of or utilized in originating and/or servicing each Mortgage Loan, which are
held in trust for the Trustee by the Servicer initially, and beginning on or
about
[                            ],
2005, by the Subservicer.

 

Servicing Officer:  Any officer of the Servicer or the
Subservicer involved in or responsible for, the administration and servicing of
the Mortgage Loans whose name appears on a list of servicing officers furnished
by the Servicer and the Subservicer to the Master Servicer upon request, as
such list may from time to time be amended.

 

Servicing Standard:  The servicing and administration of the
Mortgage Loans for which the Servicer or the Subservicer is responsible
hereunder (a) in the same manner in which, and with the same care, skill,
prudence and diligence with which, the Servicer or the Subservicer,

 

10

 

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

 

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

 

Subservicer: 
[                            ]
or its successor in interest or assigns or any successor to the Subservicer
under this Agreement as herein provided.

 

Trust Agreement:  The Trust Agreement dated as of
[                            ],
2005, among the Trustee, the Master Servicer, the Trust Administrator, the
Depositor and the Seller.

 

Trust Fund: 
The trust fund established by the Trust Agreement, the assets of which
consist of the Mortgage Loans and any other assets as set forth therein.

 

Trustee: 
[                            ]
or any successor in interest, or if any successor trustee or co-trustee shall
be appointed, as provided in the Trust Agreement, then such successor trustee
or such co-trustee, as the case may be.

 

ARTICLE II.

 

OWNER’S
ENGAGEMENT OF SERVICER TO PERFORM SERVICING RESPONSIBILITIES

 

Section 2.01.          Contract
for Servicing; Possession of Servicing Files.

 

The Seller, as the owner of the servicing rights, by execution and
delivery of this Agreement, does hereby contract with the Servicer initially,
and beginning on or about
[                            ],
2005, the Subservicer, each subject to the terms of this Agreement, for the
servicing of the Mortgage Loans.  The
Servicer shall maintain a Servicing File with respect to each Mortgage Loan in
order to service such Mortgage Loans pursuant to this Agreement and each
Servicing File delivered to the Servicer shall be held in trust by the Servicer
for the benefit of the Trustee; provided,
however, that neither the Servicer nor the Subservicer shall have
any liability for any Servicing Files (or portions thereof) not delivered by
the Seller.  The Servicer’s possession of
any portion of the Mortgage Loan documents shall be at the will of the Trustee
for

 

11

 

the sole purpose of facilitating servicing of
the related Mortgage Loan pursuant to this Agreement, and such retention and
possession by the Servicer shall be in a custodial capacity only.  The ownership of each Mortgage Note,
Mortgage, and the contents of the Servicing File shall be vested in the Trustee
and the ownership of all records and documents with respect to the related
Mortgage Loan prepared by or which come into the possession of the Servicer shall
immediately vest in the Trustee and shall be retained and maintained, in trust,
by the Servicer at the will of the Trustee in such custodial capacity
only.  The Servicing File retained by the
Servicer pursuant to this Agreement shall be identified in accordance with the
Servicer’s file tracking system to reflect the ownership of the related
Mortgage Loan by the Trustee.  The
Servicer shall release from its custody the contents of any Servicing File
retained by it only in accordance with this Agreement.

 

Section 2.02.          Books
and Records.

 

All rights arising out of the Mortgage Loans shall be vested in the
Trustee, subject to the Servicer’s and the Subservicer’s rights to service and
administer the Mortgage Loans hereunder in accordance with the terms of this
Agreement.  All funds received on or in
connection with a Mortgage Loan, other than the Servicing Fee and other
compensation and reimbursement to which the Servicer or Subservicer is entitled
as set forth herein, including but not limited to Section 5.03 below,
shall be received and held by the Servicer in trust for the benefit of the
Trustee pursuant to the terms of this Agreement.

 

The Servicer or the Subservicer shall forward to the Custodian original
documents evidencing an assumption, modification, consolidation or extension of
any Mortgage Loan entered into in accordance with Section 3.01 within one
week of their execution; provided, however,
that the Servicer or Subservicer shall provide the Custodian with a certified
true copy of any such document submitted for recordation within one week of its
execution, and shall provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within 120 days
of its submission for recordation.

 

ARTICLE III.

 

SERVICING
OF THE MORTGAGE LOANS

 

Section 3.01.          Servicer
and Subservicer to Service.

 

The Servicer shall service and administer the Mortgage Loans from and
after the Closing Date and shall have full power and authority, acting alone,
to do any and all things in connection with such servicing and administration
which the Servicer may deem necessary or desirable, consistent with the terms
of this Agreement and with Servicing Standards. 
Beginning on
[                            ],
2005, the Subservicer shall perform all of the obligations of the Servicer
under this Agreement relating to the servicing of the Mortgage Loans, on behalf
of the Servicer.  All references to the
Servicer in Articles III, IV and V of this Agreement relating to servicing
duties in respect of the Mortgage Loans shall mean the Subservicer beginning on
[                            ],
2005, except as expressly provided herein. 
Notwithstanding any of the provisions of this Agreement referring to
actions taken through the Subservicer, the Servicer

 

12

 

shall not be relieved of its obligations
hereunder with respect to the servicing of the Mortgage Loans and the Servicer
shall remain responsible hereunder for all acts and omissions of the
Subservicer as fully as if such acts and omissions were those of the Servicer.

 

Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Servicer’s reasonable and prudent determination such
waiver, modification, postponement or indulgence is not materially adverse to
the Trust Fund; provided, however,
that unless the Servicer has obtained the prior written consent of the Master
Servicer and the NIMS Insurer, the Servicer shall not permit any modification
with respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer or forgive the payment of principal or interest, reduce or increase the
outstanding principal balance (except for actual payments of principal), change
the final maturity date on such Mortgage Loan or result in any other significant
modification under the REMIC Provisions. 
In the event of any such modification which permits the deferral of
interest or principal payments on any Mortgage Loan, the Servicer shall, on the
Business Day immediately preceding the Remittance Date in any month in which
any such principal or interest payment has been deferred, make a Monthly
Advance in accordance with Section 4.03, in an amount equal to the
difference between (a) such month’s principal and one month’s interest at
the Mortgage Loan Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor.  The Servicer shall be entitled to
reimbursement for such advances to the same extent as for all other advances
made pursuant to Section 3.04. 
Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered, to execute and deliver on
behalf of itself and the Trustee, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties.  The Trustee shall
execute and deliver to the Servicer powers of attorney and other documents in
the form of Exhibit G hereto, furnished to it by the Servicer and
reasonably satisfactory to the Trustee, necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties under this
Agreement; provided that the
Trustee shall not be liable for the actions of the Servicer under any such
powers of attorney.  Promptly after the
execution of any assumption, modification, consolidation or extension of any
Mortgage Loan, the Servicer shall forward to the Master Servicer copies of any
documents evidencing such assumption, modification, consolidation or
extension.  Notwithstanding anything to
the contrary contained in this Servicing Agreement, the Servicer shall not make
or permit any modification, waiver or amendment of any term of any Mortgage
Loan that would cause an Adverse REMIC Event.

 

In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures (including collection procedures) and exercise the, same care
that it would employ and exercise in servicing and administering similar mortgage
loans for other institutional investors, giving due consideration to Servicing
Standards where such practices do not conflict with the requirements of this
Agreement.

 

(i)                            Section 3.01A.      FMC Discretion.

 

In managing the liquidation of defaulted Mortgage Loans, FMC, in its
capacity as Servicer, will have sole discretion, subject to the terms of this
Agreement, to sell defaulted

 

13

 

Mortgage Loans; provided,
however, that FMC shall not take any action that is inconsistent
with or prejudices the interests of the Certificateholders in any Mortgage Loan
or the rights and interests of the Depositor, the Trustee and the
Certificateholders under this Agreement. 
However, if NIMS Securities are issued that are secured by all or a
portion of the Class X Certificates, the servicing activities of FMC will
conform to the provisions hereunder and FMC’s applicable standard policies and
procedures and FMC’s ability to sell defaulted Mortgage Loans will cease.

 

Section 3.02.          Collection
and Liquidation of Mortgage Loans.

 

Continuously from the Closing Date, until the date each Mortgage Loan
ceases to be subject to this Agreement, the Servicer shall proceed diligently
to collect all payments due under each of the Mortgage Loans when the same
shall become due and payable and shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loans and each related Mortgaged Property,
to the end that the installments payable by the Mortgagors will be sufficient
to pay such charges as and when they become due and payable.

 

The Servicer shall use its best efforts, consistent with the procedures
that the Servicer would use in servicing similar mortgage loans for other
institutional investors, to foreclose upon or otherwise comparably convert the
ownership of such Mortgaged Properties as come into and continue in default and
as to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.01. 
The Servicer shall use its best efforts to realize upon defaulted
Mortgage Loans in such a manner as will maximize the receipt of principal and
interest by the Trust Fund, taking into account, among other things, the timing
of foreclosure proceedings.  The
foregoing is subject to the provisions that, in any case in which Mortgaged
Property shall have suffered damage, the Servicer shall not be required to
expend its own funds toward the restoration of such property unless it shall
determine in its discretion (i) that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan to the Master Servicer
after reimbursement to itself for such expenses, and (ii) that such
expenses will be recoverable by the Servicer through Insurance Proceeds or
Liquidation Proceeds from the related Mortgaged Property.  In the event that any payment due under any
Mortgage Loan and not postponed pursuant to Section 3.01 is not paid when
the same becomes due and payable, or in the event the Mortgagor fails to
perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any applicable grace period, the Servicer shall take
such action as (1) the Servicer would take for other institutional
investors under similar circumstances with respect to a similar mortgage loan, (2) shall
be consistent with Servicing Standards and (3) the Servicer shall
determine prudently to be in the best interest of the Trust Fund.  In the event that any payment due under any
Mortgage Loan is not postponed pursuant to Section 3.01 and remains
delinquent for a period of 105 days or any other default continues for a period
of 105 days beyond the expiration of any grace or cure period, the Servicer
shall commence foreclosure proceedings. 
The Servicer shall notify the Master Servicer in writing of the
commencement of foreclosure proceedings on a monthly basis no later than the
fifth Business Day of each month (which notification may be included within the
monthly reports submitted to the Master Servicer under this Agreement).  In such connection, the Servicer shall be
responsible for all costs and expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the related Mortgaged Property, as contemplated in Section 3.04.

 

14

 

Notwithstanding the generality of the preceding paragraph, the Servicer
shall take such actions generally in accordance with the Servicer’s established
default timeline and in accordance with Servicing Standards with respect to
each Mortgagor for which there is a delinquency until such time as such
Mortgagor is current with all payments due under the Mortgage Loan.

 

Section 3.03.          Establishment
of and Deposits to Custodial Account.

 

(a)           The Servicer shall segregate and hold all funds collected
and received pursuant to the Mortgage Loans separate and apart from any of its
own funds and general assets and shall initially establish and maintain one or
more Custodial Accounts, in the form of time deposit or demand accounts, each
of which accounts shall be titled “Fieldstone Mortgage Company in trust for
[                         ],
as Trustee for the Fieldstone Mortgage Investment Trust 2005-[  ]” and referred to herein as a “Custodial
Account.”  The Subservicer shall
segregate and hold all funds collected and received pursuant to the Mortgage
Loans separate and apart from any of its own funds and general assets and shall
initially establish and maintain one or more Custodial Accounts, in the form of
time deposit or demand accounts, each of which accounts shall be titled “[                           ]
in trust for
[                         ],
as Trustee for the Fieldstone Mortgage Investment Trust 2005-[  ]” and referred to herein as a “Custodial
Account”.  Any Custodial Account shall be
established with a Qualified Depository. 
Any funds deposited in the Custodial Account may be invested in Eligible
Investments subject to the provisions of Section 3.10 hereof.  Funds deposited in the Custodial Account may
be drawn on by the Servicer in accordance with Section 3.04(a) hereof.  The creation of any Custodial Account shall
be evidenced by a letter agreement in the form of Exhibit B.  A copy of such certification or letter
agreement shall be furnished to the Trustee, the Master Servicer, the NIMS
Insurer and, upon request, to any subsequent owner of the Mortgage Loans.

 

(b)           The Servicer shall deposit in the Custodial Account on a
daily basis, but not more than two (2) Business Days after receipt by the
Servicer and retain therein, the following collections received by the Servicer
and payments made by the Servicer after the Cut-off Date (other than scheduled
payments of principal and interest due on or before the Cut-off Date) or the
Servicing Transfer Date, as applicable:

 

(i)            all payments on
account of principal on the Mortgage Loans, including all Principal Prepayments
and all Prepayment Charges;

 

(ii)           all payments on account
of interest on the Mortgage Loans adjusted to the Mortgage Loan Remittance
Rate;

 

(iii)          all Prepayment Charges;

 

(iv)          all Liquidation
Proceeds;

 

(v)           all Insurance Proceeds
including amounts required to be deposited pursuant to Section 3.11 (other
than proceeds to be held in the Escrow Account and applied to the restoration
and repair of the Mortgaged Property or released to the Mortgagor in accordance
with the related Mortgage Loan documents and Servicing Standards);

 

15

 

(vi)          all Condemnation
Proceeds that are not applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the related Mortgage
Loan documents and Servicing Standards;

 

(vii)         with respect to each
Principal Prepayment in full or in part, the Prepayment Interest Shortfall
Amount, if any, for the month of distribution. 
Such deposit shall be made from the Servicer’s and the Subservicer’s own
funds, without reimbursement therefor up to a maximum amount per month in the
aggregate of the Servicing Fee actually received for such month for the
Mortgage Loans;

 

(viii)        all Monthly Advances made
by the Servicer or Subservicer pursuant to Section 4.03;

 

(ix)           any amounts received
from the Seller, the originator or any other person giving representations and
warranties with respect to the Mortgage Loan, in connection with the repurchase
of any Mortgage Loan;

 

(x)            any amounts required
to be deposited by the Servicer pursuant to Section 3.11 in connection
with the deductible clause in any blanket hazard insurance policy;

 

(xi)           any amounts received
with respect to or related to any REO Property or REO Disposition Proceeds;

 

(xii)          any amounts required to
be deposited by the Servicer pursuant to Section 3.16 in connection with
any unpaid claims that are a result of a breach by the Servicer or any
subservicer of the obligations hereunder; and

 

(xiii)         any other amount required
to be deposited in the Custodial Account pursuant to this Agreement.

 

The foregoing requirements for deposit into the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of the Servicing Fee and
Ancillary Income need not be deposited by the Servicer into the Custodial
Account.  Any interest paid on funds
deposited in the Custodial Account by the depository institution shall accrue
to the benefit of the Servicer and the Servicer shall be entitled to retain and
withdraw such interest from the Custodial Account pursuant to Section 3.04.  Additionally, any other benefit derived from
the Custodial Account associated with the receipt, disbursement and
accumulation of principal, interest, taxes, hazard insurance, mortgage
insurance, etc. shall accrue to the Servicer.

 

Section 3.04.          Permitted
Withdrawals From Custodial Account.

 

(a)           The Servicer shall, from time to time, withdraw funds from
the Custodial Account for the following purposes:

 

(i)            to make payments to
the Master Servicer in the amounts and in the manner provided for in Section 4.01;

 

16

 

(ii)           in the event the
Servicer has elected not to retain the Servicing Fee out of any Mortgagor
payments on account of interest or other recovery of interest with respect to a
particular Mortgage Loan (including late collections of interest on such
Mortgage Loan, or interest portions of Insurance Proceeds, Liquidation Proceeds
or Condemnation Proceeds) prior to the deposit of such Mortgagor payment or
recovery in the Custodial Account, to pay to itself the related Servicing Fee
from all such Mortgagor payments on account of interest or other such recovery
for interest with respect to that Mortgage Loan;

 

(iii)          to reimburse itself for
unreimbursed Monthly Advances and Servicing Advances, the Servicer’s right to
reimburse itself pursuant to this subclause (iii) with respect to any
Mortgage Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds and other amounts
received in respect of the related REO Property, and such other amounts as may
be collected by the Servicer from the Mortgagor or otherwise relating to such
Mortgage Loan, it being understood that, in the case of any such reimbursement,
the Servicer’s right thereto shall be prior to the rights of the Trust Fund;

 

(iv)          to reimburse itself for
any previously unreimbursed Monthly Advances or Servicing Advances made by the
Servicer that it determines are Nonrecoverable Advances, it being understood,
in the case of each such reimbursement, that the Servicer’s right thereto shall
be prior to the rights of the Trust Fund;

 

(v)           to pay itself interest
on funds deposited in the Custodial Account;

 

(vi)          to transfer funds to
another Qualified Depository in accordance with Section 3.11 hereof;

 

(vii)         to invest funds in
certain Eligible Investments in accordance with Section 3.11 hereof;

 

(viii)        [Reserved.];

 

(ix)           to withdraw funds
deposited in error; and

 

(x)            to clear and terminate
the Custodial Account upon the termination of this Agreement.

 

Section 3.05.          Establishment
of and Deposits to Escrow Account.

 

The Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart
from any of its own funds and general assets and shall establish and maintain
one or more Escrow Accounts, in the form of time deposit or demand accounts,
titled, “[                               
] in trust for [                
], as Trustee for the Fieldstone Mortgage Investment Trust 2005-[  ]”. 
The Escrow Accounts shall be established with a Qualified Depository in
a manner that shall provide maximum available insurance thereunder.  Nothing herein shall require the Servicer to
compel a Mortgagor to establish an Escrow Account in violation of applicable
law.  Funds deposited in the Escrow
Account may be drawn on by the Servicer in accordance with Section 3.06.  The creation of any

 

17

 

Escrow Account shall be evidenced by a letter
agreement in the form of Exhibit C hereto. 
A copy of such certification or letter agreement shall be furnished to
the Master Servicer and the NIMS Insurer.

 

The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:

 

(i)            all Escrow Payments
collected on account of the Mortgage Loans, for the purpose of effecting timely
payment of any such items as required under the terms of this Agreement; and

 

(ii)           all amounts
representing Insurance Proceeds or Condemnation Proceeds which are to be applied
to the restoration or repair of any Mortgaged Property.

 

The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in Section 3.06.  The Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution, other than interest on escrowed funds required by law to be paid
to the Mortgagor.  To the extent required
by law, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.

 

Section 3.06.          Permitted
Withdrawals From Escrow Account.

 

Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:

 

(i)            to effect timely
payments of ground rents, taxes, assessments, water rates, mortgage insurance
premiums, condominium charges, fire and hazard insurance premiums or other
items constituting Escrow Payments for the related Mortgage;

 

(ii)           to reimburse the
Servicer for any Servicing Advance of an Escrow Payment made by the Servicer
with respect to a related Mortgage Loan, but only from amounts received on the
related Mortgage Loan which represent late collections of Escrow Payments
thereunder;

 

(iii)          to refund to any
Mortgagor any funds found to be in excess of the amounts required under the
terms of the related Mortgage Loan;

 

(iv)          to the extent permitted
by applicable law, for transfer to the Custodial Account and application to
reduce the principal balance of the Mortgage Loan in accordance with the terms
of the related Mortgage and Mortgage Note;

 

(v)           for application to
restoration or repair of the Mortgaged Property in accordance with Section 3.15;

 

(vi)          to pay to the Servicer,
or any Mortgagor to the extent required by law, any interest paid on the funds
deposited in the Escrow Account; and

 

18

 

(vii)         to clear and terminate
the Escrow Account on the termination of this Agreement.

 

The Servicer will be responsible for the administration of the Escrow
Accounts and will be obligated to make Servicing Advances to the Escrow Account
in respect of its obligations under this Section 3.06, reimbursable from
the Escrow Accounts or Custodial Account to the extent not collected from the
related Mortgagor, anything to the contrary notwithstanding, when and as
necessary to avoid the lapse of insurance coverage on the Mortgaged Property,
or which the Servicer knows, or in servicing the Mortgage Loans in accordance
with Servicing Standards should know, is necessary to avoid the loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien.  If any such payment has not been
made and the Servicer receives notice of a tax lien with respect to the
Mortgage being imposed, the Servicer will advance or cause to be advanced funds
necessary to discharge such lien on the Mortgaged Property in order to prevent
loss of title to the Mortgaged Property.

 

Section 3.07.          Notification
of Adjustments.

 

With respect to each adjustable rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related interest rate adjustment date
and shall adjust the Monthly Payment on the related mortgage payment adjustment
date, if applicable, in compliance with the requirements of applicable law and
the related Mortgage and Mortgage Note. 
The Servicer shall execute and deliver any and all necessary notices
required under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate and Monthly Payment
adjustments.  The Servicer shall
promptly, upon written request therefor, deliver to the Master Servicer such
notifications and any additional applicable data regarding such adjustments and
the methods used to calculate and implement such adjustments.  Upon the discovery by the Servicer or the
receipt of notice from the Master Servicer that the Servicer has failed to
adjust a Mortgage Interest Rate or Monthly Payment in accordance with the terms
of the related Mortgage Note, the Servicer shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss or
deferral caused the Seller thereby.

 

Section 3.08.          [Reserved.]

 

Section 3.09.          Payment
of Taxes, Insurance and Other Charges.

 

(a)           With respect to each
Mortgage Loan which provides for Escrow Payments, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates, sewer rents, and other charges which are or may become a lien upon
the Mortgaged Property and the status of fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) (“Property Charges”) and shall effect
payment thereof prior to the applicable penalty or termination date, employing
for such purpose deposits of the Mortgagor in the Escrow Account which shall
have been estimated and accumulated by the Servicer in amounts sufficient for
such purposes, as allowed under the terms of the Mortgage.  The Servicer shall effect timely payment of
all such charges irrespective of each Mortgagor’s faithful performance in the
payment of same or the making of the Escrow Payments.

 

19

 

(b)           To the extent that a
Mortgage does not provide for Escrow Payments, the Servicer shall make advances
from its own funds to effect payment of all Property Charges upon receipt of
notice of any failure to pay on the part of the Mortgagor, or at such other
time as the Servicer determines to be in the best interest of the Trust Fund, provided, that in any event the Servicer
shall pay such charges on or before any date by which payment is necessary to
preserve the lien status of the Mortgage. 
The Servicer shall pay any late fee or penalty which is payable due to
any delay in payment of any Property Charge and necessary to avoid a lien on or
loss on Mortgage Property.

 

Section 3.10.          Protection
of Accounts.

 

The Servicer may transfer the Custodial Account or the Escrow Account
to a different Qualified Depository from time to time.  Such transfer shall be made only upon
obtaining the consent of the NIMS Insurer, which consent shall not be withheld
unreasonably, and the Servicer shall give notice to the Master Servicer of any
change in the location of the Custodial Account.

 

The Servicer shall bear any expenses, losses or damages sustained by
the Master Servicer or the Trustee if the Custodial Account and/or the Escrow
Account are not demand deposit accounts.

 

Amounts on deposit in the Custodial Account may at the option of the
Servicer be invested in Eligible Investments. 
Any such Eligible Investment shall mature no later than two (2) Business
Days prior to the Remittance Date in each month; provided,
however, that if such Eligible Investment is an obligation of a
Qualified Depository (other than the Servicer) that maintains the Custodial
Account, then such Eligible Investment may mature on the related Remittance
Date.  Any such Eligible Investment shall
be made in the name of the Servicer in trust for the benefit of the
Trustee.  All income on or gain realized
from any such Eligible Investment shall be for the benefit of the Servicer and
may be withdrawn at any time by the Servicer. 
Any losses incurred in respect of any such investment shall be deposited
in the Custodial Account, by the Servicer out of its own funds immediately as
realized.  If, at any time, the amount on
deposit in the Custodial Account exceeds the amount of the applicable FDIC
insurance, such excess above the amount of the applicable FDIC insurance shall
be invested in Eligible Investments.

 

Section 3.11.          Maintenance
of Hazard Insurance.

 

The Servicer shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by a
generally acceptable insurer acceptable under Servicing Standards against loss
by fire, hazards of extended coverage and such other hazards as are customary
in the area where the Mortgaged Property is located, in an amount which is at
least equal to the lesser of (i) the replacement value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such
that the proceeds thereof shall be sufficient to prevent the Mortgagor or the
loss payee from becoming a co-insurer.

 

20

 

If upon origination of the Mortgage Loan, the related Mortgaged
Property was located in an area identified in the Federal Register by the Flood
Emergency Management Agency as having special flood hazards (and such flood
insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier acceptable under
Servicing Standards in an amount representing coverage equal to the lesser of (i) the
minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under
the Flood Disaster Protection Act of 1973, as amended.  If at any time during the term of the
Mortgage Loan, the Servicer determines in accordance with applicable law and
pursuant to Servicing Standards that a Mortgaged Property is located in a
special flood hazard area and is not covered by flood insurance or is covered
in an amount less than the amount required by the Flood Disaster Protection Act
of 1973, as amended, the Servicer shall notify the related Mortgagor that the
Mortgagor must obtain such flood insurance coverage, and if said Mortgagor
fails to obtain the required flood insurance coverage within thirty (30) days
after such notification, the Servicer shall immediately force place the
required flood insurance on the Mortgagor’s behalf.

 

The Servicer shall cause to be maintained on each Mortgaged Property
such other or additional insurance as may be required pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Servicing Standards.

 

In the event that the Master Servicer or the Servicer shall determine
that the Mortgaged Property should be insured against loss or damage by hazards
and risks not covered by the insurance required to be maintained by the
Mortgagor pursuant to the terms of the Mortgage, the Servicer shall communicate
and consult with the Mortgagor with respect to the need for such insurance and
bring to the Mortgagor’s attention the desirability of protection of the
Mortgaged Property.

 

All policies required hereunder shall name the Servicer as loss payee
and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.

 

The Servicer shall not interfere with the Mortgagor’s freedom of choice
in selecting either his insurance carrier or agent, provided,
however, that the Servicer shall not accept any such insurance
policies from insurance companies unless such companies are generally
acceptable under Servicing Standards. 
The Servicer shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address. 
The Servicer shall furnish to the Mortgagor a formal notice of
expiration of any such insurance in sufficient time for the Mortgagor to
arrange for renewal coverage by the expiration date.

 

21

 

Pursuant to Section 3.04, any amounts collected by the Servicer
under any such policies (other than amounts to be deposited in the Escrow
Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor, in accordance with the Servicer’s normal servicing
procedures as specified in Section 3.15) shall be deposited in the
Custodial Account subject to withdrawal pursuant to Section 3.06.

 

Notwithstanding anything set forth in the preceding paragraph, the
Servicer agrees to indemnify the Trustee, the NIMS Insurer, the
Certificateholders, the Master Servicer and the Trust Fund for any claims,
losses, damages, penalties, fines, forfeitures, legal fees and related costs,
judgments and any other costs, fees and expenses that any such indemnified
party may sustain in any way related to the failure of the Mortgagor (or the
Servicer) to maintain hazard or flood insurance with respect to the related
Mortgaged Property which complies with the requirements of this section.

 

Section 3.12.          Maintenance
of Mortgage Impairment Insurance.

 

In the event that the Servicer shall obtain and maintain a blanket
policy insuring against losses arising from fire and hazards covered under
extended coverage on all of the Mortgage Loans, then, to the extent such policy
provides coverage in an amount equal to the amount required pursuant to Section 3.11
and otherwise complies with all other requirements of Section 3.11, it
shall conclusively be deemed to have satisfied its obligations as set forth in Section 3.11.  Any amounts collected by the Servicer under
any such policy relating to a Mortgage Loan shall be deposited in the Custodial
Account subject to withdrawal pursuant to Section 3.05.  Such policy may contain a deductible clause,
in which case, in the event that there shall not have been maintained on the
related Mortgaged Property a policy complying with Section 3.11, and there
shall have been a loss which would have been covered by such policy, the
Servicer shall deposit in the Custodial Account at the time of such loss the
amount not otherwise payable under the blanket policy because of such
deductible clause, such amount to deposited from the Servicer’s funds, without
reimbursement therefor.  Upon request of
the Master Servicer, the Trustee or the NIMS Insurer, the Servicer shall cause
to be delivered to such person a certified true copy of such policy and a statement
from the insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days’ prior written notice to the Master
Servicer, the Trustee and the NIMS Insurer.

 

Section 3.13.          Maintenance
of Fidelity Bond and Errors and Omissions Insurance.

 

The Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans (“Servicer Employees”).  Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker’s
Blanket Bond and shall protect and insure the Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Servicer Employees. 
Such Fidelity Bond and Errors and Omissions Insurance Policy also shall
protect and insure the Servicer against losses in connection with the release
or satisfaction of a Mortgage Loan without having obtained payment in full of
the indebtedness secured thereby.

 

22

 

No provision of this Section 3.13
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Servicer from its duties and obligations as set forth
in this Agreement.  The minimum coverage
under any such bond and insurance policy shall be at least equal to the
coverage amounts which are acceptable for the Servicer as determined by Fannie
Mae and Freddie Mac.  Upon the request of
the Master Servicer, the Trustee or the NIMS Insurer, the Servicer shall cause
to be delivered to such party a certified true copy of such fidelity bond and
insurance policy and a statement from the surety and the insurer that such
fidelity bond and insurance policy shall in no event be terminated or
materially modified without 30 days’ prior written notice to the Master
Servicer, the Trustee and the NIMS Insurer.

 

Section 3.14.          Inspections.

 

The Servicer shall inspect the Mortgaged Property as often as deemed
necessary by the Servicer to assure itself that the value of the Mortgaged
Property is being preserved.  In
addition, the Servicer shall inspect the Mortgaged Property and/or take such
other actions as may be necessary or appropriate in accordance with Servicing
Standards or as may be required by the primary mortgage guaranty insurer.  The Servicer shall keep a written report of
each such inspection.

 

Section 3.15.          Restoration
of Mortgaged Property.

 

The Servicer need not obtain the approval of the Master Servicer or the
Trustee prior to releasing any Insurance Proceeds or Condemnation Proceeds to
the Mortgagor to be applied to the restoration or repair of the Mortgaged
Property if such release is in accordance with Servicing Standards.  At a minimum, the Servicer shall comply with
the following conditions in connection with any such release of Insurance
Proceeds or Condemnation Proceeds:

 

(i)            the Servicer shall
receive satisfactory independent verification of completion of repairs and
issuance of any required approvals with respect thereto;

 

(ii)           the Servicer shall take
all steps necessary to preserve the priority of the lien of the Mortgage,
including, but not limited to requiring waivers with respect to mechanics’ and
materialmen’s liens; and

 

(iii)          pending repairs or
restoration, the Servicer shall place the Insurance Proceeds or Condemnation
Proceeds in the Escrow Account.

 

Section 3.16.          [Reserved.]

 

Section 3.17.          Title,
Management and Disposition of REO Property.

 

In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Trustee or its nominee in trust for the
benefit of the Certificateholders, or in the event the Trustee is not
authorized or permitted to hold title to real property in the state where the
REO Property is located, or would be adversely affected under the “doing
business” or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or

 

23

 

Persons as shall be consistent with an
Opinion of Counsel obtained by the Servicer from any attorney duly licensed to
practice law in the state where the REO Property is located.  The Person or Persons holding such title
other than the Trustee shall acknowledge in writing that such title is being
held as nominee for the Trustee.

 

The Servicer shall manage, conserve, protect and operate each REO
Property for the Trustee solely for the purpose of its prompt disposition and
sale.  The Servicer, either itself or
through an agent selected by the Servicer, shall manage, conserve, protect and
operate the REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is managed.  The Servicer shall attempt to sell the same
(and may temporarily rent the same for a period not greater than one year,
except as otherwise provided below) on such terms and conditions as the
Servicer deems to be in the best interest of the Trustee and the
Certificateholders.

 

If the Servicer hereafter becomes aware that a Mortgaged Property is an
Environmental Problem Property, the Servicer will notify the Master Servicer
and the NIMS Insurer of the existence of the Environmental Problem Property.  Additionally, the Servicer shall set forth in
such notice a description of such problem, a recommendation to the Master
Servicer and the NIMS Insurer relating to the proposed action regarding the
Environmental Problem Property, and the Servicer shall carry out the
recommendation set forth in such notice unless otherwise directed by the NIMS
Insurer in writing within five (5) days after its receipt (or deemed
receipt) of such notice in accordance with the terms and provisions of Section 9.04
below.  The Master Servicer shall be
provided a copy of the NIMS Insurer’s instructions to the Servicer.  Notwithstanding the foregoing, the Servicer
shall obtain the Master Servicer’s and the NIMS Insurer’s written consent to
any expenditures proposed to remediate Environmental Problem Properties or to
defend any claims associated with Environmental Problem Properties if such
expenses, in the aggregate, are expected to exceed $100,000.  Failure to provide written notice of disapproval
of the expenditure within five (5) Business Days of receipt of such
request for prepaid expenditures shall be deemed an approval of such
expenditure.  The Master Servicer shall
be provided with a copy of the NIMS Insurer’s instructions to the
Servicer.  If the Servicer has received
reliable instructions to the effect that a Property is an Environmental Problem
Property (e.g., Servicer obtains a broker’s price opinion which reveals the
potential for such problem), the Servicer will not accept a deed-in-lieu of
foreclosure upon any such Property without first obtaining a preliminary
environmental investigation for the Property satisfactory to the NIMS Insurer.

 

In the event that the Trust Fund acquires any REO Property in
connection with a default or imminent default on a Mortgage Loan, the Servicer
shall dispose of such REO Property not later than the end of the third taxable
year after the year of its acquisition by the Trust Fund unless the Servicer
has applied for and received a grant of extension from the Internal Revenue
Service (and provided a copy of the same to the NIMS Insurer, the Trustee and
the Master Servicer) to the effect that, under the REMIC Provisions and any
relevant proposed legislation and under applicable state law, the applicable
Trust REMIC may hold REO Property for a longer period without adversely
affecting the REMIC status of such REMIC or causing the imposition of a federal
or state tax upon such REMIC.  If the
Servicer has received such an extension (and provided a copy of the same to the
NIMS Insurer, the Trustee and the Master

 

24

 

Servicer), then the Servicer shall continue
to attempt to sell the REO Property for its fair market value for such period
longer than three years as such extension permits (the “Extended Period”).  If the Servicer has not received such an
extension and the Servicer is unable to sell the REO Property within the period
ending three months before the end of such third taxable year after its
acquisition by the Trust Fund or if the Servicer has received such an
extension, and the Servicer is unable to sell the REO Property within the
period ending three months before the close of the Extended Period, the
Servicer shall, before the end of the three-year period or the Extended Period,
as applicable, (i) purchase such REO Property at a price equal to the REO
Property’s fair market value, as acceptable to the NIMS Insurer or (ii) auction
the REO Property to the highest bidder (which may be the Servicer) in an
auction reasonably designed to produce a fair price prior to the expiration of
the three-year period or the Extended Period, as the case may be.  The Trustee shall sign any document or take
any other action reasonably requested by the Servicer which would enable the
Servicer, on behalf of the Trust Fund, to request such grant of extension.

 

Notwithstanding any other provisions of this Agreement, no REO Property
acquired by the Trust Fund shall be rented (or allowed to continue to be
rented) or otherwise used by or on behalf of the Trust Fund in such a manner or
pursuant to any terms that would:  (i) cause such REO Property
to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of
the Code; or (ii) subject any Trust REMIC to the imposition of any federal
income taxes on the income earned from such REO Property, including any taxes
imposed by reason of Sections 860F or 860G(c) of the Code, unless the
Servicer has agreed to indemnify and hold harmless the Trust Fund and the NIMS
Insurer with respect to the imposition of any such taxes.

 

The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required above.

 

The proceeds of sale of the REO Property shall be promptly deposited in
the Custodial Account.  As soon as
practical thereafter the expenses of such sale shall be paid and the Servicer
shall reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to this Section or Section 4.03.

 

The Servicer shall make advances of all funds necessary for the proper
operation, management and maintenance of the REO Property, including the cost
of maintaining any hazard insurance pursuant to Section 3.10, such
advances to be reimbursed from the disposition or liquidation proceeds of the
REO Property.  The Servicer shall make
monthly distributions on each Remittance Date to the Master Servicer of the net
cash flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in this Section 3.16 and of any
reserves reasonably required from time to time to be maintained to satisfy
anticipated liabilities for such expenses).

 

25

 

Section 3.18.          Real
Estate Owned Reports.

 

Together with the statement furnished pursuant to Section 4.02,
the Servicer shall furnish to the Master Servicer on or before the 10th
calendar day in each month a statement with respect to any REO Property
covering the operation of such REO Property for the previous month and the
Servicer’s efforts in connection with the sale of such REO Property and any
rental of such REO Property incidental to the sale thereof for the previous
month.  That statement shall be
accompanied by such other information as the Master Servicer shall reasonably
request.  Upon request by the NIMS
Insurer, the Master Servicer shall furnish such statement to the NIMS Insurer.

 

Section 3.19.          Liquidation
Reports.

 

Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Trustee pursuant to a deed in lieu of foreclosure, the Servicer
shall submit to the Trustee and the Master Servicer a monthly liquidation
report with respect to such Mortgaged Property.

 

Section 3.20.          Reports
of Foreclosures and Abandonments of Mortgaged Property.

 

Following the foreclosure sale or abandonment of any Mortgaged
Property, the Servicer shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code.

 

Section 3.21.          Prepayment
Charges.

 

The Servicer or any designee of the Servicer shall not waive any
Prepayment Charge with respect to any Mortgage Loan which contains a Prepayment
Charge which prepays during the term of the charge.  If the Servicer or its designee fails to
collect the Prepayment Charge upon any prepayment of any Mortgage Loan which
contains a Prepayment Charge, the Servicer shall pay the Trust Fund at such
time (by deposit to the Custodial Account) an amount equal to amount of the
Prepayment Charge which was not collected. 
Notwithstanding the above, the Servicer or its designee may waive a
Prepayment Charge without paying the Trust Fund the amount of the Prepayment
Charge if (i) the Mortgage Loan is in default (defined as 61 days or more
delinquent) and such waiver would maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan
or (ii) if the prepayment is not a result of a refinancing by the Servicer
or any of its affiliates and (a) the Mortgage Loan is foreseen to be in
default and such waiver would maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and the related Mortgage Loan or (b) the
collection of the Prepayment Charge would be in violation of applicable
federal, state or local laws or would be deemed “predatory” thereunder.

 

Section 3.22.          Compliance
with Safeguarding Customer Information Requirements.

 

The Servicer has implemented and will maintain security measures
designed to meet the objectives of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information published in final form on February 1,
2001, 66 Fed. Reg. 8616, and the rules promulgated thereunder, as amended
from time to time (the “Guidelines”).

 

26

 

ARTICLE IV.

 

PAYMENTS
TO OWNER

 

Section 4.01.          Remittances.

 

On each Remittance Date, no later than 1:00 p.m. New York City
time, the Servicer shall remit on a scheduled/scheduled basis by wire transfer
of immediately available funds to the Master Servicer (a) all amounts deposited
in the Custodial Account as of the close of business on the last day of the
related Collection Period (net of charges against or withdrawals from the
Custodial Account pursuant to Section 3.04), plus (b) all Monthly
Advances, if any, which the Servicer is obligated to make pursuant to Section 4.03,
minus (c) any amounts attributable to Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds, Condemnation Proceeds or REO Disposition Proceeds
received after the applicable Principal Prepayment Period, which amounts shall
be remitted on the following Remittance Date, together with any additional
interest required to be deposited in the Custodial Account in connection with
such Principal Prepayment in accordance with Section 3.03(b)(vii), and minus
(d) any amounts attributable to Monthly Payments collected but due on a
Due Date or Due Dates subsequent to the first day of the month in which such
Remittance Date occurs, which amounts shall be remitted on the Remittance Date
next succeeding the Due Date related to such Monthly Payment.

 

With respect to any remittance received by the Master Servicer after
the Remittance Date on which such remittance was due, the Servicer shall pay to
the Master Servicer interest on any such late remittance at an annual rate
equal to the Prime Rate, adjusted as of the date of each change, plus three
percentage points, but in no event greater than the maximum amount permitted by
applicable law.  Such interest shall be
deposited in the Custodial Account by the Servicer on the date such late
remittance is made and shall cover the period commencing with the day following
such Remittance Date and ending with the Business Day on which such remittance
is made, both inclusive.  Such interest
shall be remitted along with the distribution payable on the next succeeding
Remittance Date.  The payment by the
Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Servicer.

 

All remittances required to be made to the Master Servicer shall be
made to the following wire account or to such other account as may be specified
by the Master Servicer from time to time:

 

[                           ]

[                           ]

ABA#: 
[                           ]

Account Name: 
[                           ]

Account Number: 
[                           ]

For further credit to: 
[                           ]

 

27

 

Section 4.02.          Statements
to Seller.

 

Not later than the tenth (10th) calendar day of each month
(or if such tenth calendar day is not a Business Day, the immediately preceding
Business Day), the Servicer shall furnish to the Master Servicer (i) a
monthly remittance advice in the format set forth in Exhibit D-1 hereto
and a monthly defaulted loan report in the format set forth in Exhibit D-2
hereto (or in such other format mutually agreed to between the Servicer and the
Master Servicer) relating to the period ending on the last day of the preceding
calendar month and (ii) all such information required pursuant to clause (i) above
on a magnetic tape or other similar media reasonably acceptable to the Master
Servicer.

 

Such monthly remittance advice shall also be accompanied by a
supplemental report provided to the Master Servicer, the NIMS Insurer and the
Seller which includes on an aggregate basis for the previous calendar month (i) the
amount of claims filed, (ii) the amount of any claim payments made and (iii) the
amount of claims denied or curtailed. 
The Master Servicer will convert such data into a format acceptable to
the Trust Administrator and provide monthly reports to the Trust Administrator
pursuant to the Trust Agreement.

 

For each Mortgage Loan, the Servicer shall furnish, in accordance with
the Fair Credit Reporting Act and its implementing regulations, information
(e.g., favorable and unfavorable) on its borrower credit files to each of the
three national credit reporting agencies on a monthly basis.

 

In addition, not more than 75 days after the end of each calendar year,
commencing December 31, 2005, the Servicer shall provide (as such
information becomes reasonably available to the Servicer) to the Master
Servicer and, upon request by the NIMS Insurer, the Master Servicer shall
furnish to the NIMS Insurer, such information concerning the Mortgage Loans and
annual remittances to the Master Servicer therefrom as is necessary for the
Trust Administrator to prepare the Trust Fund’s federal income tax return and
for any investor in the Certificates to prepare any required tax return.  Such obligation of the Servicer shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Servicer to the Master Servicer, the Trust
Administrator and the NIMS Insurer pursuant to any requirements of the Code as
from time to time are in force.  The
Servicer shall also provide to the Trust Administrator such information as may
be requested by it and required for the completion of any tax reporting
responsibility of the Trust Administrator within such reasonable time frame as
shall enable the Trust Administrator to timely file each Schedule Q (or
other applicable tax report or return) required to be filed by it.

 

Section 4.03.          Monthly
Advances by Servicer.

 

On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution, or a combination of both, an amount equal
to all Monthly Payments (with interest adjusted to the Mortgage Loan Remittance
Rate) which were due on the Mortgage Loans during the applicable Collection
Period and which were delinquent at the close of business on the immediately
preceding Determination Date.  Any amounts
held for future distribution and so used shall be replaced by the Servicer by
deposit in the Custodial Account on or before any

 

28

 

future Remittance Date if funds in the
Custodial Account on such Remittance Date shall be less than remittances to the
Master Servicer required to be made on such Remittance Date.  The Servicer shall keep appropriate records
of such amounts and will provide such records to the Master Servicer and the
NIMS Insurer upon request.

 

The Servicer’s obligation to make such Monthly Advances as to any
Mortgage Loan will continue through the last Monthly Payment due prior to the
payment in full of the Mortgage Loan, or through the last Remittance Date prior
to the Remittance Date for the distribution of all Liquidation Proceeds and
other payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the related Mortgage Loan.

 

Notwithstanding the foregoing, if the Subservicer fails to make any
monthly Advance required to be made by this Section 4.03 with respect to
any Remittance Date, then the Servicer (acting in accordance with the first
paragraph of Section 3.01) shall be obligated to make such Monthly
Advance, subject to its determination of the recoverability of such Monthly
Advance.

 

Section 4.04.          Due
Dates Other Than the First of the Month.

 

Mortgage Loans having Due Dates other than the first day of a month
shall be accounted for as described in this Section 4.04.  Any payment due on a day other than the first
day of each month shall be considered due on the first day of the month
following the month in which that payment is due as if such payment were due on
the first day of that month.  For
example, a payment due on August 15 shall be considered to be due on September 1.  Any payment due and collected on a Mortgage
Loan after the Cut-off Date shall be deposited in the Custodial Account.  For Mortgage Loans with Due Dates on the
first day of a month, deposits to the Custodial Account begin with the payment
due on the first of the month following the Cut-off Date.

 

Section 4.05.          Credit
Reporting.

 

For each Mortgage Loan, in accordance with its current servicing
practices, the Servicer will accurately and fully report its underlying
borrower credit files to each of the following credit repositories or their
successors:  Equifax Credit Information
Services, Inc., Trans Union, LLC and Experian Information Solution, Inc.,
on a monthly basis in a timely manner. 
In addition, with respect to any Mortgage Loan serviced for a Fannie Mae
pool, the Servicer shall transmit full credit reporting data to each of such
credit repositories in accordance with Fannie Mae Guide Announcement 95-19 (November 11,
1995), a copy of which is attached hereto as Exhibit G, reporting each of
the following statuses, each month with respect to a Mortgage Loan in a Fannie
Mae pool: New origination, current, delinquent (30-60-90-days, etc), foreclosed
or charged off.

 

29

 

ARTICLE V.

 

GENERAL
SERVICING PROCEDURES

 

Section 5.01.          Transfers
of Mortgaged Property.

 

The Servicer shall use its best efforts to enforce any “due-on-sale”
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold whether
by absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note.  When the Mortgaged Property has been conveyed
by the Mortgagor, the Servicer shall, to the extent it has knowledge of such
conveyance, exercise its rights to accelerate the maturity of such Mortgage
Loan under the “due-on-sale” clause applicable thereto; provided,
however, that the Servicer shall not exercise such rights if
prohibited by law from doing so.

 

If the Servicer reasonably believes it is unable under applicable law
to enforce such “due-on-sale” clause, the Servicer shall enter into (i) an
assumption and modification agreement with the person to whom such property has
been conveyed, pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the
event the Servicer is unable under applicable law to require that the original
Mortgagor remain liable under the Mortgage Note and the Servicer has the prior
consent of the primary mortgage guaranty insurer, a substitution of liability
agreement with the seller of the Mortgaged Property pursuant to which the
original Mortgagor is released from liability and the buyer of the Mortgaged
Property is substituted as Mortgagor and becomes liable under the Mortgage
Note.  In connection with any such
assumption, neither the Mortgage Interest Rate borne by the related Mortgage
Note, the timing of principal or interest payments on the Mortgage Loan, the
term of the Mortgage Loan, the outstanding principal amount of the Mortgage
Loan nor any other term that would result in a significant modification under
the REMIC Provisions shall be changed. 
In addition, in connection with any assumption and modification, a
Mortgage or Mortgage Note shall not be changed in a manner that would result in
an Adverse REMIC Event.

 

To the extent that any Mortgage Loan is assumable, the Servicer shall
inquire diligently into the creditworthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used by the Servicer, its affiliates or Fannie Mae with
respect to underwriting mortgage loans of the same type as the Mortgage
Loans.  If the credit of the proposed transferee
does not meet such underwriting criteria, the Servicer diligently shall, to the
extent permitted by the Mortgage or the Mortgage Note and by applicable law,
accelerate the maturity of the Mortgage Loan.

 

Section 5.02.          Satisfaction
of Mortgages and Release of Mortgage Files.

 

Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer shall notify the Master Servicer in
the Monthly Remittance Advice as provided in Section 4.02, and may request
the release of any Mortgage Loan Documents from the Seller in accordance with
this Section 5.02 hereof.

 

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If the Servicer satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Servicer otherwise prejudice any rights the Seller, the Trustee or the
Trust Fund may have under the mortgage instruments, the Servicer shall deposit
into the Custodial Account the entire outstanding principal balance, plus all
accrued interest on such Mortgage Loan, on the day preceding the Remittance
Date in the month following the date of such release.  The Servicer shall maintain the Fidelity Bond
and Errors and Omissions Insurance Policy as provided for in Section 3.13
insuring the Servicer against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.

 

Section 5.03.          Servicing
Compensation.

 

As consideration for servicing the Mortgage Loans subject to this
Agreement, the Servicer and the Subservicer shall be paid in the aggregate the
relevant Servicing Fee for each Mortgage Loan remaining subject to this
Agreement during any month or part thereof. 
Such Servicing Fee shall be payable monthly and retained by the Servicer
or the Subservicer, as applicable. 
Additional servicing compensation in the form of Ancillary Income shall
be retained by the Subservicer only and is not required to be deposited in the
Custodial Account.  The obligation of the
Seller to pay the Servicing Fee is limited to, and the Servicing Fee is payable
from, the interest portion (including recoveries with respect to interest from
Liquidation Proceeds) of such Monthly Payment collected by the Servicer, or as
otherwise provided in Section 3.04.

 

Each of the Servicer and the Subservicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement thereof except as specifically
provided for herein.

 

The Servicing Fee payable to or retained by the Servicer or the
Subservicer, as applicable, with respect to any Collection Period shall be
reduced by the Prepayment Interest Shortfall Amount required to be deposited in
the Custodial Account and remitted to the Master Servicer on the related
Remittance Date.  The Servicer and the
Subservicer shall be obligated to remit to the Master Servicer on each
Remittance Date the Prepayment Interest Shortfall Amount, if any, only up to an
amount equal to in the aggregate the Servicing Fee the Servicer and the
Subservicer are entitled to receive for such Distribution Date.

 

Section 5.04.          Annual
Audit Report.

 

As soon as practicable in each year beginning with 2006, but in no
event later than March 15 of each calendar year, the Subservicer shall, at
its own expense, cause a firm of independent public accountants (who may also
render other services to the Subservicer), which is a member of the American
Institute of Certified Public Accountants, to furnish to the Seller, the NIMS
Insurer, the Master Servicer and the Sarbanes Certifying Party (i) year-end
audited (if available) financial statements of the Subservicer and (ii) a
statement to the effect that such firm has examined certain documents and
records for the preceding fiscal year (or during the period from the date of
commencement of such Subservicer’s duties hereunder until the end of such
preceding fiscal year in the case of the first such certificate) and that, on
the basis of such examination conducted substantially in compliance with the
Uniform Single Attestation Program

 

31

 

for Mortgage Bankers, such firm is of the
opinion that the Subservicer’s overall servicing operations have been conducted
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
except for such exceptions that, in the opinion of such firm, the Uniform
Single Attestation Program for Mortgage Bankers requires it to report, in which
case such exceptions shall be set forth in such statement.

 

Section 5.05.          Annual
Compliance Certifications.

 

(a)           No later than March 15 of each calendar year,
commencing with the year 2006, the Subservicer shall, at its own expense,
deliver to the Seller, the NIMS Insurer, the Master Servicer and the Sarbanes
Certifying Party a servicer’s certificate stating, as to each signer thereof,
that (i) a review of the activities of the Subservicer during such
preceding fiscal year and of performance under this Agreement has been made
under such officers’ supervision, and (ii) to the best of such officers’
knowledge, based on such review, the Subservicer has fulfilled all its
obligations under this Agreement for such year, or, if there has been a default
in the fulfillment of all such obligations, specifying each such default known
to such officers and the nature and status thereof including the steps being
taken by the Subservicer to remedy such default.

 

(b)           For so long as a certificate under the Sarbanes-Oxley Act of
2002, as amended (“Sarbanes-Oxley”), is required to be given on behalf of the
Trust Fund, no later than March 15 of each calendar year, commencing with
the year 2006, or at any other time that the Sarbanes Certifying Party provides
a certification pursuant to Sarbanes-Oxley and upon thirty (30) days written
request of such parties, an officer of the Subservicer shall execute and
deliver an Officer’s Certificate to the Sarbanes Certifying Party for the
benefit of the Trust Fund and the Sarbanes Certifying Party and its officers,
directors and affiliates, in the form of Exhibit F hereto.

 

(c)           The Subservicer shall indemnify and hold harmless the Master
Servicer and its officers, directors, agents and affiliates from and against
any losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Subservicer or any of its officers, directors, agents or
affiliates of its obligations under this Section 5.05 for the negligence,
bad faith or willful misconduct of the Subservicer in connection
therewith.  If the indemnification
provided for herein is unavailable or insufficient to hold harmless the Master
Servicer, then the Subservicer agrees that it shall contribute to the amount
paid or payable by the Master Servicer as a result of the losses, claims,
damages or liabilities of the Master Servicer in such proportion as is
appropriate to reflect the relative fault of the Master Servicer on the one
hand and the Subservicer on the other in connection with a breach of the
Subservicer’s obligations under this Section 5.05 or the Subservicer’s
negligence, bad faith or willful misconduct in connection therewith.

 

(d)           In addition, FMC shall provide the certifications and
reports specified in this Section 5.05 and Section 5.04 to the
Persons specified therein within the time period specified therein with respect
to the period from the Closing Date to and including the date on which the
servicing of the Mortgage Loans is transferred to the Subservicer.  FMC hereby agrees to indemnify the Master
Servicer and the other Persons specified in Section 5.05(c) to the
same extent as though such provisions referred to the Servicer rather than the
Subservicer.

 

32

 

Section 5.06.          Inspection.

 

The Servicer shall provide the Trustee, the Master Servicer and the
NIMS Insurer, upon five (5) Business Days’ advance notice, during normal
business hours, access to all records maintained by the Servicer in respect of
its rights and obligations hereunder and access to officers of the Servicer
responsible for such obligations.  Upon
request, the Servicer shall furnish to the Trustee, the Master Servicer and the
NIMS Insurer its most recent publicly available financial statements and such
other information relating to its capacity to perform its obligations under
this Agreement.

 

ARTICLE VI.

 

REPRESENTATIONS,
WARRANTIES AND AGREEMENTS 

 

Section 6.01.          Representations,
Warranties and Agreements of the Servicer.

 

The Servicer, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Servicer, the Master Servicer, the Subservicer, the Depositor and the
Trustee, as of the Closing Date:

 

(a)           Due Organization and Authority.  The Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state where a
Mortgaged Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Servicer, and in any event the Servicer is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the terms of
this Agreement; the Servicer has the full corporate power and authority to execute
and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Servicer and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Servicer (except to the extent bankruptcy,
insolvency, reorganization, fraudulent conveyance or similar laws affect the
enforcement of creditor’s rights generally) and all requisite corporate action
has been taken by the Servicer to make this Agreement valid and binding upon
the Servicer in accordance with its terms;

 

(b)           Ordinary Course of Business.  The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Servicer;

 

(c)           No Conflicts.  Neither the execution and delivery of this
Agreement, the acquisition of the servicing responsibilities by the Servicer or
the transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will (i) conflict with or
result in a breach of any of the terms, conditions or provisions of the
Servicer’s charter or by-laws or any legal restriction or any agreement or
instrument to which the Servicer is now a party or by which it is bound, (ii) constitute
a default under any of the foregoing, (iii) result in an acceleration
under any of the foregoing, (iv) result in the violation of

 

33

 

any law, rule, regulation, order, judgment or
decree to which the Servicer or its property is subject or (v) impair the
ability of the Servicer to service the Mortgage Loans, or impair the value of the
Mortgage Loans;

 

(d)           Ability to Perform.  The Servicer does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;

 

(e)           No Litigation Pending.  There is no action, suit, proceeding or
investigation pending or, to the Servicer’s knowledge, threatened against the
Servicer which, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of the
right or ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or which
would draw into question the validity of this Agreement or of any action taken
or to be taken in connection with the obligations of the Servicer contemplated
herein, or which would be likely to impair materially the ability of the
Servicer to perform under the terms of this Agreement;

 

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

 

(g)           No Default.  The Servicer is not in default, and no event
or condition exists that after the giving of notice or lapse of time or both,
would constitute an event of default under any material mortgage, indenture,
contract, agreement, judgment, or other undertaking, to which the Servicer is a
party or which purports to be binding upon it or upon any of its assets, which
default could impair materially the ability of the Servicer to perform under
the terms of this Agreement;

 

(h)           Ability to Service.  The Servicer is an approved seller/servicer
of conventional residential mortgage loans for Fannie Mae and Freddie Mac, with
the facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans.  The Servicer is in good standing to service
mortgage loans for either Fannie Mae or Freddie Mac, and no event has occurred,
including but not limited to a change in insurance coverage, which would make
the Servicer unable to comply with either Fannie Mae or Freddie Mac eligibility
requirements or which would require notification to either of Fannie Mae or
Freddie Mac;

 

(i)            No Untrue Information.  Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this
Agreement or in connection with the transactions contemplated hereby contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained therein not misleading; and

 

(j)            No Commissions to Third Parties.  The Servicer has not dealt with any broker or
agent or anyone else who might be entitled to a fee or commission in connection
with this transaction other than the Seller.

 

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Section 6.02.          Representations,
Warranties and Agreements of the Subservicer.

 

The Subservicer, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Servicer, the Master Servicer, the Depositor and the Trustee, as of the
Closing Date:

 

(a)           Due Organization and Authority.  The Subservicer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing
in each state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Subservicer, and in any event the Subservicer is in compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of the terms of this Agreement; the Subservicer has the full
corporate power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered pursuant to
this Agreement) by the Subservicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Subservicer
(except to the extent bankruptcy, insolvency, reorganization, fraudulent
conveyance or similar laws affect the enforcement of creditor’s rights
generally) and all requisite corporate action has been taken by the Subservicer
to make this Agreement valid and binding upon the Subservicer in accordance
with its terms;

 

(b)           Ordinary Course of Business.  The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Subservicer;

 

(c)           No Conflicts.  Neither the execution and delivery of this
Agreement, the acquisition of the servicing responsibilities by the Subservicer
or the transactions contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Agreement, will (i) conflict with or
result in a breach of any of the terms, conditions or provisions of the
Subservicer’s charter or by-laws or any legal restriction or any agreement or
instrument to which the Subservicer is now a party or by which it is bound, (ii) constitute
a default under any of the foregoing, (iii) result in an acceleration
under any of the foregoing, (iv) result in the violation of any law, rule,
regulation, order, judgment or decree to which the Subservicer or its property
is subject or (v) impair the ability of the Subservicer to service the
Mortgage Loans, or impair the value of the Mortgage Loans;

 

(d)           Ability to Perform.  The Subservicer does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;

 

(e)           No Litigation Pending.  There is no action, suit, proceeding or
investigation pending or, to the Subservicer’s knowledge, threatened against
the Subservicer which, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations, financial
condition, properties or assets of the Subservicer, or in any material
impairment of the right or ability of the Subservicer to carry on its business
substantially as now conducted, or in any material liability on the part of the
Subservicer, or which would

 

35

 

draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Subservicer contemplated herein, or which would be likely to
impair materially the ability of the Subservicer to perform under the terms of
this Agreement;

 

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

 

(g)           No Default.  The Subservicer is not in default, and no
event or condition exists that after the giving of notice or lapse of time or
both, would constitute an event of default under any material mortgage,
indenture, contract, agreement, judgment, or other undertaking, to which the
Subservicer is a party or which purports to be binding upon it or upon any of
its assets, which default could impair materially the ability of the
Subservicer to perform under the terms of this Agreement;

 

(h)           Ability to Service.  The Subservicer is an approved
seller/Subservicer of conventional residential mortgage loans for Fannie Mae
and Freddie Mac, with the facilities, procedures, and experienced personnel
necessary for the sound servicing of mortgage loans of the same type as the
Mortgage Loans.  The Subservicer is in
good standing to service mortgage loans for either Fannie Mae or Freddie Mac,
and no event has occurred, including but not limited to a change in insurance
coverage, which would make the Subservicer unable to comply with either Fannie
Mae or Freddie Mac eligibility requirements or which would require notification
to either of Fannie Mae or Freddie Mac; and

 

(i)            No Commissions to Third Parties.  The Subservicer has not dealt with any broker
or agent or anyone else who might be entitled to a fee or commission in
connection with this transaction other than the Seller.

 

Section 6.03.          Remedies
for Breach of Representations and Warranties of the Servicer and the
Subservicer.

 

It is understood and agreed that the representations and warranties set
forth in Sections 6.01 and 6.02 shall survive the engagement of each
Representing Party to perform the servicing responsibilities as of the Closing
Date hereunder and the delivery of the Servicing Files to the Servicer and the
Subservicer, as applicable, and shall inure to the benefit of the Master
Servicer, the NIMS Insurer and the Trustee. 
Upon discovery by either the Servicer, the Subservicer, the Master
Servicer, the NIMS Insurer or the Trustee of a breach of any of the foregoing
representations and warranties which materially and adversely affects the
ability of the such Representing Party to perform its duties and obligations
under this Agreement or otherwise materially and adversely affects the value of
the Mortgage Loans, the Mortgaged Property or the priority of the security
interest on such Mortgaged Property or the interests of the Master Servicer,
the NIMS Insurer or the Trustee, the party discovering such breach shall give
prompt written notice to the other parties.

 

Within 60 days of the earlier of either discovery by or notice to a
Representing Party of any breach of a representation or warranty set forth in Section 6.01
or Section 6.02, as

 

36

 

applicable, which materially and adversely
affects the ability of such Representing Party to perform its duties and
obligations under this Agreement or otherwise materially and adversely affects
the value of the Mortgage Loans, the Mortgaged Property or the priority of the
security interest on such Mortgaged Property, such Representing Party shall use
its best efforts promptly to cure such breach in all material respects and, if
such breach cannot be cured, such Representing Party shall, at the Trustee’s or
the Master Servicer’s option, assign its rights and obligations under this
Agreement (or respecting the affected Mortgage Loans) to a successor
servicer.  Such assignment shall be made
in accordance with Sections 8.01 and 8.02.

 

In addition, such Representing Party shall indemnify the Master
Servicer, the Servicer, the Subservicer, the Trustee and the NIMS Insurer and
hold each of them harmless against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of such Representing
Party’s representations and warranties contained in Section 6.01.

 

Any cause of action against a Representing Party relating to or arising
out of the breach of any representations and warranties made in Section 6.01
or Section 6.02, as applicable, shall accrue upon (i) discovery of
such breach by such Representing Party or notice thereof by the Master
Servicer, the Depositor or the Trustee to such Representing Party, (ii) failure
by the Representing Party to cure such breach within the applicable cure
period, and (iii) demand upon the Representing Party by the Master
Servicer, the NIMS Insurer or the Trustee for compliance with this Agreement.

 

Section 6.04.          Additional
Indemnification by the Servicer.

 

The Servicer shall indemnify the Master Servicer, the Depositor, the
Trustee, the Trust Fund and the NIMS Insurer and hold them harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
(collectively, the “Liabilities”) that the indemnified party may sustain in any
way related to the failure of the Servicer to perform its duties and service
the Mortgage Loans in accordance with the terms of this Agreement.  The Servicer shall immediately notify the
Master Servicer, the Depositor, the Trustee or the NIMS Insurer if a claim is
made by a third party with respect to this Agreement or the Mortgage Loans that
may result in such Liabilities, and the Servicer shall assume (with the prior
written consent of the indemnified party) the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
any indemnified party in respect of such claim and follow any written
instructions received from the such indemnified party in connection with such
claim.  The Servicer shall be reimbursed
promptly from the Trust Fund for all amounts advanced by it pursuant to the
preceding sentence except when the claim is in any way related to the Servicer’s
indemnification pursuant to Section 6.03, or the failure of the Servicer
to service and administer the Mortgage Loans in accordance with the terms of
this Agreement.

 

37

 

Section 6.05.          Additional
Indemnification by the Subservicer.

 

The Subservicer shall indemnify the Master Servicer, the Servicer, the
Depositor, the Trustee, the Trust Fund and the NIMS Insurer and hold them
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses (collectively, the “Liabilities”) that
the indemnified party may sustain in any way related to the failure of the
Subservicer to perform its duties and service the Mortgage Loans in accordance
with the terms of this Agreement.  The
Subservicer shall immediately notify the Master Servicer, the Servicer, the
Depositor, the Trustee or the NIMS Insurer if a claim is made by a third party
with respect to this Agreement or the Mortgage Loans that may result in such
Liabilities, and the Subservicer shall assume (with the prior written consent
of the indemnified party) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or any indemnified
party in respect of such claim and follow any written instructions received
from the such indemnified party in connection with such claim.  The Subservicer shall be reimbursed promptly
from the Trust Fund for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Subservicer’s
indemnification pursuant to Section 6.03, or the failure of the
Subservicer to service and administer the Mortgage Loans in accordance with the
terms of this Agreement.

 

Section 6.06.          Indemnification
with Respect to Certain Taxes and Loss of REMIC Status.

 

If an Adverse REMIC Event occurs due to the negligent performance by
the Servicer or the Subservicer of its duties and obligations set forth herein,
the Servicer or the Subservicer, as applicable, shall indemnify the Holder of
the related Residual Certificate, the Master Servicer, the Trustee, the Trust
Administrator, the Trust Fund, the NIMS Insurer and the Servicer (in the case
of indemnification by the Subservicer) against any and all losses, claims,
damages, liabilities or expenses (“Losses”) resulting from such negligence; provided, however, that the Servicer or Subservicer, as
applicable, shall not be liable for any such Losses attributable to the action
or inaction of the Trustee, the Master Servicer, the Depositor or the Holder of
such Residual Certificate, as applicable, nor for any such Losses resulting
from misinformation provided by the Holder of such Residual Certificate on
which the Servicer has relied.  The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Residual Certificate, the Trustee, the Trust Fund, the NIMS
Insurer and the Servicer (in the case of indemnification by the Subservicer)
now or hereafter existing at law or in equity or otherwise.  Notwithstanding the foregoing, however, in no
event shall the Servicer or the Subservicer, as applicable, have any liability (1) for
any action or omission that is taken in accordance with and in compliance with
the express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent
performance by the Servicer or the Subservicer, as applicable, of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).

 

38

 

Section 6.07.          [Reserved.]

 

ARTICLE VII.

 

THE
SERVICER AND THE SUBSERVICER 

 

Section 7.01.          Merger
or Consolidation of the Servicer.

 

The Servicer shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.

 

Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided,
however, that the successor or surviving Person shall be an
institution (i) having a net worth of not less than $25,000,000, and (ii) which
is a Fannie Mae- and Freddie Mac-approved servicer in good standing.

 

Section 7.02.          Limitation
on Liability of the Servicer and Others.

 

Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Master Servicer, the
NIMS Insurer, the Depositor or the Trustee for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Servicer or any such person against
any breach of warranties or representations made herein, or failure to perform
its obligations in strict compliance with any standard of care set forth in
this Agreement, or any liability which would otherwise be imposed by reason of
any breach of the terms and conditions of this Agreement.  The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder.  The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans in
accordance with this Agreement and which in its opinion may involve it in any
expense or liability, provided, however,
that the Servicer may undertake any such action which it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto.  In such event, the Servicer
shall be entitled to reimbursement from the Trust Fund for the reasonable legal
expenses and costs of such action.

 

Section 7.03.          Limitation
on Resignation and Assignment by the Servicer.

 

This Agreement has been entered into with the Servicer in reliance upon
the independent status of the Servicer, and the representations as to the
adequacy of its servicing facilities, plant, personnel, records and procedures,
its integrity, reputation and financial

 

39

 

standing, and the continuance thereof.  Therefore, except as expressly provided in
this Section 7.03 and Sections 3.01 and 7.01, the Servicer shall neither
assign its rights under this Agreement or the servicing hereunder nor delegate
its duties hereunder or any portion thereof, or sell or otherwise dispose of
all or substantially all of its property or assets without, in each case, the
prior written consent of the Seller, the Master Servicer, and the NIMS Insurer
which consent, in the case of an assignment of rights or delegation of duties,
shall be granted or withheld in the discretion of the Seller, the Master
Servicer, and the NIMS Insurer; provided,
that in each case, there must be delivered to the Seller, the Master Servicer,
the Trustee, the Trust Administrator and the NIMS Insurer a letter from each
Rating Agency to the effect that such transfer of servicing or sale or
disposition of assets will not result in a qualification, withdrawal or downgrade
of the then-current, rating of any of the Certificates or the NIMS Securities
to be issued in the NIMS Transaction.

 

The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer, the Master Servicer,
and the NIMS Insurer or upon the determination that its duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by
the Servicer.  Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Seller, the Master Servicer, the
Trustee and the NIMS Insurer which Opinion of Counsel shall be in form and
substance reasonably acceptable to each of them.  No such resignation shall become effective
until a successor shall have assumed the Servicer’s responsibilities and
obligations hereunder in the manner provided in Section 9.01.

 

Without in any way limiting the generality of this Section 7.03,
in the event that the Servicer either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof or sell or otherwise dispose of all or substantially all of its
property or assets, except to the extent permitted by and in accordance with
this Section 7.03 and Sections 3.01 and 7.01, without the prior written
consent of the Seller, the Master Servicer, the Trustee and the NIMS Insurer,
then such parties shall have the right to terminate this Agreement upon notice
given as set forth in Section 8.01, without any payment of any penalty or
damages and without any liability whatsoever to the Servicer or any third
party.

 

Section 7.04.          Merger
or Consolidation of the Subservicer.

 

The Subservicer shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.

 

Any Person into which the Subservicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Subservicer shall be a party, or any Person succeeding to the business of
the Subservicer, shall be the successor of the Subservicer hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding, provided, however, that the successor or surviving Person
shall be an institution

 

40

 

(i) having a net worth of not less than
$25,000,000, and (ii) which is a Fannie Mae- and Freddie Mac-approved
Subservicer in good standing.

 

Section 7.05.          Limitation
on Liability of the Subservicer and Others.

 

Neither the Subservicer nor any of the directors, officers, employees
or agents of the Subservicer shall be under any liability to the Master
Servicer, the NIMS Insurer, the Depositor or the Trustee for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Subservicer or any such person
against any breach of warranties or representations made herein, or failure to
perform its obligations in strict compliance with any standard of care set
forth in this Agreement, or any liability which would otherwise be imposed by
reason of any breach of the terms and conditions of this Agreement.  The Subservicer and any director, officer,
employee or agent of the Subservicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder.  The
Subservicer shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve it
in any expense or liability, provided, however,
that the Subservicer may undertake any such action which it may deem necessary
or desirable in respect of this Agreement and the rights and duties of the
parties hereto.  In such event, the
Subservicer shall be entitled to reimbursement from the Trust Fund for the
reasonable legal expenses and costs of such action.

 

Section 7.06.          Limitation
on Resignation and Assignment by the Subservicer.

 

This Agreement has been entered into with the Subservicer in reliance
upon the independent status of the Subservicer, and the representations as to
the adequacy of its servicing facilities, plant, personnel, records and
procedures, its integrity, reputation and financial standing, and the
continuance thereof.  Therefore, except
as expressly provided in this Section 7.06 and Sections 3.01 and 7.04, the
Subservicer shall neither assign its rights under this Agreement or the
servicing hereunder nor delegate its duties hereunder or any portion thereof,
without the prior written consent of the Seller, the Master Servicer, and the
NIMS Insurer which consent, in the case of an assignment of rights or
delegation of duties, shall be granted or withheld in the discretion of the
Seller, the Master Servicer, and the NIMS Insurer and which consent, in the
case of a sale or disposition of all or substantially all of the property or
assets of the Subservicer, shall not be unreasonably withheld by any of them; provided, that in each case, there must be
delivered to the Seller, the Master Servicer, the Trustee, the Trust
Administrator and the NIMS Insurer a letter from each Rating Agency to the
effect that such transfer of servicing or sale or disposition of assets will
not result in a qualification, withdrawal or downgrade of the then-current
rating of any of the Certificates or the NIMS Securities to be issued in the
NIMS Transaction.

 

The Subservicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Subservicer, the Master Servicer,
and the NIMS Insurer or upon the determination that its duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by
the Subservicer.  Any such determination
permitting the resignation of the Subservicer shall be evidenced by an Opinion
of Counsel to such effect

 

41

 

delivered to the Seller, the Master Servicer,
the Trustee and the NIMS Insurer which Opinion of Counsel shall be in form and
substance reasonably acceptable to each of them.  No such resignation shall become effective
until a successor shall have assumed the Subservicer’s responsibilities and
obligations hereunder in the manner provided in Section 8.01.

 

Without in any way limiting the generality of this Section 7.06,
in the event that the Subservicer either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof or sell or otherwise dispose of all or substantially all of its
property or assets, except to the extent permitted by and in accordance with
this Section 7.06 and Sections 3.01, 7.03, without the prior written
consent of the Seller, the Master Servicer, the Trustee and the NIMS Insurer,
then such parties shall have the right to terminate this Agreement upon notice
given as set forth in Section 8.01, without any payment of any penalty or
damages and without any liability whatsoever to the Subservicer or any third
party.

 

ARTICLE VIII.

 

TERMINATION

 

Section 8.01.          Termination
for Cause.

 

(a)           Any of the following occurrences shall constitute an event
of default (each, an “Event of Default”) on the part of the Servicer or the
Subservicer:

 

(i)            any failure by the
Servicer or the Subservicer, as applicable, to remit to the Master Servicer any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of two Business Days after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Servicer or the Subservicer, as applicable, by the Master
Servicer, the NIMS Insurer or the Servicer; or

 

(ii)           failure by the Servicer
or the Subservicer, as applicable, duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer or
the Subservicer, as applicable, set forth in this Agreement which continues
unremedied for a period of 30 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer or the Subservicer, as applicable, by the Master Servicer, the NIMS
Insurer or the Servicer; or

 

(iii)          failure by the Servicer
or the Subservicer, as applicable, to maintain its license to do business or
service residential mortgage loans in any jurisdiction where the Mortgaged
Properties are located except where the failure to so maintain such license
does not have a material adverse effect on the Servicer’s or the Subservicer’s,
as applicable, ability to service the Mortgage Loans; or

 

(iv)          a decree or order of a
court or agency or supervisory authority having jurisdiction for the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, including bankruptcy, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered

 

42

 

against the
Servicer or the Subservicer, as applicable, and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or

 

(v)           the Servicer or the
Subservicer, as applicable, shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the Servicer
or the Subservicer, as applicable, or of or relating to all or substantially
all of its property; or

 

(vi)          the Servicer or the
Subservicer, as applicable, shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations for three Business Days; or

 

(vii)         the Servicer or the
Subservicer, as applicable, ceases to meet the qualifications of a Fannie Mae
or Freddie Mac lender/servicer;

 

(viii)        the Servicer or the
Subservicer, as applicable, attempts to assign the servicing of the Mortgage
Loans or its right to servicing compensation hereunder or the Servicer or the
Subservicer, as applicable, or assets or to assign this Agreement or the
servicing responsibilities hereunder or to delegate its duties hereunder or any
portion thereof in a manner not permitted under this Agreement;

 

(ix)           if (x) any of the
Rating Agencies reduces or withdraws the rating of any of the Certificates due
to a reason attributable to the Servicer or the Subservicer, as applicable, or
(y) the Servicer’s or the Subservicer’s, as applicable, residential primary
servicer rating for servicing of subprime loans issued by any of the Rating
Agencies is reduced below its rating in effect on the Closing Date or
withdrawn; provided that if the
Servicer’s or the Subservicer’s, as applicable, rating by any Rating Agency is
reduced by not more than two levels, the Servicer or the Subservicer, as
applicable, shall have 180 days to cure such default by having the applicable
Rating Agency restore Servicer’s or Subservicer’s, as applicable, rating to its
level in effect on the Closing Date; or

 

(x)            the net worth of the
Servicer or the Subservicer, as applicable, shall be less than $25,000,000; or

 

(xi)           failure by the Servicer
or Subservicer, as applicable, to duly perform, within the required time
period, its obligations under Sections 5.04 or 5.05 which failure continues
unremedied for a period of 7 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Master Servicer or to the Subservicer by the Servicer, as
applicable.

 

In each and every such case, so long as an Event of Default shall not
have been remedied, in addition to whatsoever rights the Master Servicer, the
Trustee, the NIMS Insurer or the Servicer (in the case of a Subservicer Event
of Default) may have at law or equity to damages, including injunctive relief
and specific performance, the Master Servicer, the Trustee, the NIMS Insurer or
the Servicer (in the case of a Subservicer Event of Default), by notice in
writing to the Servicer or the Subservicer, as applicable, may terminate all
the rights and

 

43

 

obligations of the Servicer or the
Subservicer, as applicable, under this Agreement and in and to the servicing
contract established hereby and the proceeds thereof.

 

Upon receipt by the Subservicer of such written notice of termination,
all authority and power of the Subservicer under this Agreement, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Servicer or a successor subservicer appointed by the Servicer with the consent
of the Master Servicer, the Trustee and the NIMS Insurer, which consent shall
not be unreasonably withheld, and the Servicer (or the successor subservicer)
shall be subject to all of the responsibilities, duties and liabilities
relating thereto, including the obligation to make Monthly Advances.  Upon receipt by the Servicer, of such written
termination notice, all authority and power of the Servicer, under this
Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in a successor servicer appointed by the Trustee or the Master
Servicer, as the case may be, with the consent of the other party and the NIMS
Insurer.  Upon written request from the
Master Servicer, the Servicer or the Subservicer, as applicable, shall prepare,
execute and deliver to the successor servicer or subservicer any and all
documents and other instruments, place in such successor’s possession all
Servicing Files, and do or cause to be done all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, including
but not limited to the transfer and endorsement or assignment of the Mortgage
Loans and related documents, at the Servicer’s or the Subservicer’s, as
applicable, sole expense.  The Servicer
or the Subservicer, as applicable, shall cooperate with the Seller, the Master
Servicer, the NIMS Insurer, the Trustee and such successor in effecting the
termination of the Servicer’s or the Subservicer’s, as applicable,
responsibilities and rights hereunder, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Servicer or the Subservicer, as
applicable, to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.

 

By a written notice, the Trustee or the Master Servicer, with the
consent of the other parties and the NIMS Insurer, may waive any default by the
Servicer or the Subservicer, as applicable, in the performance of its
obligations, hereunder and its consequences. 
Upon any waiver of a past default, such default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. 
No such waiver shall extend to any subsequent or other default or impair
any right consequent thereon except to the extent expressly so waived.

 

The Master Servicer shall promptly notify the Servicer at any time that
the Master Servicer obtains actual knowledge of the occurrence of an Event of
Default with respect to the Subservicer.

 

ARTICLE IX.

 

MISCELLANEOUS
PROVISIONS 

 

Section 9.01.          Successor
to the Servicer.

 

Simultaneously with the termination of the Servicer’s responsibilities
and duties under this Agreement (a) pursuant to Sections 6.03, 6.04, 7.03,
or 8.01, the Master Servicer shall

 

44

 

(i) within 90 days of the Servicer’s
notice of such termination, succeed to and assume all of the Servicer’s
responsibilities, rights, duties and obligations under this Agreement, or (ii) appoint
a successor having the characteristics set forth in clauses (i) and (ii) of
Section 7.01 and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
simultaneously with the termination of the Servicer’s responsibilities, duties
and liabilities under this Agreement. 
Any successor to the Servicer shall be subject to the approval of the
Master Servicer and the NIMS Insurer. 
Any approval of a successor servicer by the Master Servicer and the NIMS
Insurer and, to the extent required by the Trust Agreement, the Trustee, shall,
if the successor servicer is not at that time a servicer of other Mortgage
Loans for the Trust Fund, be conditioned upon the receipt by the Master
Servicer, the NIMS Insurer, the Seller and the Trustee of a letter from each
Rating Agency to the effect that such transfer of servicing will not result in
a qualification, withdrawal or downgrade of the then-current rating of any of
the Certificates or the NIM Securities to be issued in the NIMS Transaction.  In connection with such appointment and
assumption, the Master Servicer or Seller, as applicable, may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree, provided, however,
that no such compensation shall be in excess of that permitted the Servicer
under this Agreement.  In the event that
the Servicer’s duties, responsibilities and liabilities under this Agreement
should be terminated pursuant to the aforementioned sections, the Servicer
shall discharge such duties and responsibilities during the period from the
date it acquires knowledge of such termination until the effective date thereof
with the same degree of diligence and prudence which it is obligated to
exercise under this Agreement, and shall take no action whatsoever that might
impair or prejudice the rights or financial condition of its successor.  The resignation or removal of the Servicer
pursuant to the aforementioned sections shall not become effective until a
successor shall be appointed pursuant to this Section 9.01 and shall in no
event relieve the Servicer of the representations and warranties made pursuant
to Sections 6.01 and the remedies available to the Master Servicer, the
Trustee, the NIMS Insurer and the Seller under Sections 6.02, 6.03 and 6.04, it
being understood and agreed that the provisions of such Sections 6.01, 6.02,
6.03 and 6.04 shall be applicable to the Servicer notwithstanding any such
resignation or termination of the Servicer, or the termination of this Agreement.  Neither the Master Servicer, in its capacity
as successor servicer, nor any other successor servicer shall be responsible
for the lack of information and/or documents that it cannot otherwise obtain
through reasonable efforts.

 

Within a reasonable period of time, but in no event longer than 30 days
of the appointment of a successor entity, the Servicer shall prepare, execute
and deliver to the successor entity any and all documents and other
instruments, place in such successor’s possession all Servicing Files, and do
or cause to be done all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, including but not limited to the
transfer of any Mortgage Notes and the related documents.  The Servicer shall cooperate with the
Trustee, the Master Servicer or the Seller, as applicable, and such successor
in effecting the termination of the Servicer’s responsibilities and rights
hereunder and the transfer of servicing responsibilities to the successor
Servicer, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.

 

Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Trustee, the Servicer, the Master Servicer, the NIMS Insurer
and the Seller an

 

45

 

instrument (i) accepting such
appointment, wherein the successor shall make the representations and
warranties set forth in Section 6.01 and provide for the same remedies set
forth in Sections 6.02, 6.03 and 6.04 herein and (ii) an assumption of the
due and punctual performance and observance of each covenant and condition to
be performed and observed by the Servicer under this Agreement, whereupon such
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer, with like effect
as if originally named as a party to this Agreement.  Any termination or resignation of the
Servicer or termination of this Agreement pursuant to Sections 6.02, 7.03 or
8.01 shall not affect any claims that the Seller, the Master Servicer, the NIMS
Insurer or the Trustee may have against the Servicer arising out of the
Servicer’s actions or failure to act prior to any such termination or
resignation. In addition, in the event any successor servicer is appointed
pursuant to Section 8.02(iii) of this Agreement, such successor
servicer must satisfy the conditions relating to the transfer of servicing set
forth in the Trust Agreement.

 

The Servicer shall deliver promptly to the successor servicer the funds
in the Custodial Account and Escrow Account and all Mortgage Loan documents and
related documents and statements held by it hereunder and the Servicer shall
account for all funds and shall execute and deliver such instruments and do
such other things as may reasonably be required to more fully and definitively
vest in the successor all such rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer.

 

Upon a successor’s acceptance of appointment as such, it shall notify
the Trustee, the Seller and Master Servicer, the NIMS Insurer and the Depositor
of such appointment in accordance with the procedures set forth in Section 9.04.

 

Section 9.02.          Successor
to the Subservicer.

 

Simultaneously with the termination of the Subservicer’s
responsibilities and duties under this Agreement (a) pursuant to Sections
6.02, 6.04, 7.03 or 8.01, the Servicer shall (i) within 90 days of the
Subservicer’s notice of such termination, succeed to and assume all of the
Subservicer’s responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set
forth in clauses (i) and (ii) of Section 7.01 and which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Subservicer under this Agreement simultaneously with the
termination of the Subservicer’s responsibilities, duties and liabilities under
this Agreement.  Any successor to the
Subservicer shall be subject to the approval of the Master Servicer and the
NIMS Insurer.  Any approval of a successor
Subservicer by the Master Servicer and the NIMS Insurer and, to the extent
required by the Trust Agreement, the Trustee, shall, if the successor
Subservicer is not at that time a Subservicer of other Mortgage Loans for the
Trust Fund, be conditioned upon the receipt by the Master Servicer, the NIMS
Insurer, the Seller and the Trustee of a letter from each Rating Agency to the
effect that such transfer of servicing will not result in a qualification,
withdrawal or downgrade of the then current rating of any of the Certificates
or the NIM Securities to be issued in the NIMS Transaction.  In connection with such appointment and
assumption, the Servicer, as applicable, may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree, provided, however,
that no such compensation shall be in excess of that permitted the Subservicer
under this Agreement.  In the event that
the Subservicer’s duties, responsibilities and liabilities under this Agreement

 

46

 

should be terminated pursuant to the
aforementioned sections, the Subservicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such termination
until the effective date thereof with the same degree of diligence and prudence
which it is obligated to exercise under this Agreement, and shall take no
action whatsoever that might impair or prejudice the rights or financial
condition of its successor.  The
resignation or removal of the Subservicer pursuant to the aforementioned
sections shall not become effective until a successor shall be appointed
pursuant to this Section 9.01 and shall in no event relieve the
Subservicer of the representations and warranties made pursuant to Sections
6.01 and the remedies available to the Servicer, the Master Servicer, the
Trustee, the NIMS Insurer and the Seller under Sections 6.02, 6.03 and 6.04, it
being understood and agreed that the provisions of such Sections 6.01, 6.02,
6.03 and 6.04 shall be applicable to the Subservicer notwithstanding any such
resignation or termination of the Subservicer, or the termination of this
Agreement.  Neither the Servicer, in its
capacity as successor Subservicer, nor any other successor Subservicer shall be
responsible for the lack of information and/or documents that it cannot
otherwise obtain through reasonable efforts.

 

Within a reasonable period of time, but in no event longer than 30 days
of the appointment of a successor entity, the Subservicer shall prepare,
execute and deliver to the successor entity any and all documents and other
instruments, place in such successor’s possession all Servicing Files, and do
or cause to be done all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, including but not limited to the
transfer of any Mortgage Notes and the related documents.  The Subservicer shall cooperate with the
Servicer, the Trustee, the Master Servicer or the Seller, as applicable, and
such successor in effecting the termination of the Subservicer’s
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor Subservicer, including without limitation,
the transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the Subservicer to the Custodial Account
or Escrow Account or thereafter received with respect to the Mortgage Loans.

 

Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer, the Trustee, the Subservicer, the Master Servicer,
the NIMS Insurer and the Seller an instrument (i) accepting such
appointment, wherein the successor shall make the representations and
warranties set forth in Section 6.01 and provide for the same remedies set
forth in Sections 6.02, 6.03 and 6.0,4 herein and (ii) an assumption of
the due and punctual performance and observance of each covenant and condition
to be performed and observed by the Subservicer under this Agreement, whereupon
such successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Subservicer, with like
effect as if originally named as a party to this Agreement.  Any termination or resignation of the
Subservicer or termination of this Agreement pursuant to Sections 6.02, 7.03 or
8.01 shall not affect any claims that the Seller, the Servicer, the Master
Servicer, the NIMS Insurer or the Trustee may have against the Subservicer
arising out of the Subservicer’s actions or failure to act prior to any such
termination or resignation.

 

The Subservicer shall deliver promptly to the successor Subservicer the
funds in the Custodial Account and Escrow Account and all Mortgage Loan documents
and related documents and statements held by it hereunder and the Subservicer
shall account for all funds and shall execute and deliver such instruments and
do such other things as may reasonably be

 

47

 

required to more fully and definitively vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Subservicer.

 

Upon a successor’s acceptance of appointment as such, it shall notify
the Trustee, the Seller and Master Servicer, the NIMS Insurer and the Depositor
of such appointment in accordance with the procedures set forth in Section 9.04.

 

Section 9.03.          Costs.

 

The Seller shall pay the legal fees and expenses of its attorneys.  Costs and expenses incurred in connection
with the transfer of the servicing responsibilities, including fees for
delivering Servicing Files, shall be paid by (i) the terminated or
resigning Servicer if such termination or resignation is a result of an
occurrence of a termination event under Section 8.01, and (ii) in all
other cases by the Trust Fund.  Subject
to Section 2.02, the Seller, on behalf of the Depositor, shall pay the
costs associated with the preparation, delivery and recording of Assignments of
Mortgages.

 

Section 9.04.          Protection
of Confidential Information.

 

The Servicer shall keep confidential and shall not divulge to any
party, without the Seller’s prior written consent, any nonpublic information
pertaining to the Mortgage Loans or any borrower thereunder, except to the
extent that it is appropriate for the Servicer to do so in working with legal
counsel, subservicers, special servicers, auditors, taxing authorities or other
governmental agencies.

 

Section 9.05.          Notices.

 

All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed by overnight courier,
addressed as follows or delivered by facsimile (or such other address as may
hereafter be furnished to the other party by like notice):

 

(i)            if to the Seller or
the Servicer:

 

Fieldstone Mortgage Company

11000 Broken Land Parkway, Suite 600

Columbia, Maryland 21044

Attention: 
Chief Financial Officer

Telephone: 
(410) 772-5179

Facsimile: 
(410) 772-7299

 

(ii)           if to the Subservicer:

 

[                           ]

 

 

Attention:

Telephone:

Facsimile:

 

48

 

with a copy to:

 

[                           ]

 

 

Attention:

Telephone:

Facsimile:

 

(iii)          if to the Master
Servicer:

 

[                           ]

 

 

Attention:

 

Telephone:

Facsimile:

 

(iv)          if to the Trust
Administrator:

[                           ]

 

 

Attention:

Telephone:

Facsimile:

 

(v)           if to the Trustee:

 

[                           ]

 

 

Telephone:

Facsimile:

 

(vi)          if to the NIMS Insurer:

 

as provided in the Trust Agreement.

 

(vi)          if
to the Depositor:

 

as provided in the Trust Agreement.

 

Any. such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee.

 

49

 

Section 9.06.          Severability
Clause.

 

Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.  Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan shall not invalidate or render unenforceable such provision in any other
jurisdiction.  To the extent permitted by
applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.  If the invalidity of any part, provision,
representation or warranty of this Agreement shall deprive any party of the
economic benefit intended to be conferred by this Agreement, the parties shall
negotiate, in good-faith, to develop a structure the economic effect of which
is as close as possible to the economic effect of this Agreement without regard
to such invalidity.

 

Section 9.07.          No
Personal Solicitation.

 

For as long as either the Servicer or the Subservicer services the
Mortgage Loans, each covenants that it will not, and that it will ensure that
its affiliates and agents, will not, directly solicit or provide information
for any other party to solicit for prepayment or refinancing of any of the
Mortgage Loans by the related mortgagors. 
It is understood that promotions undertaken by the Servicer which are
directed to the general public at large, or certain segments thereof, shall not
constitute solicitation as that term is used in this Section 9.07.

 

Section 9.08.          Counterparts.

 

This Agreement may be executed simultaneously in any number of
counterparts.  Each counterpart shall be
deemed to be an original, and all such counterparts shall constitute one and
the same instrument.

 

Section 9.09.          Place
of Delivery and Governing Law.

 

This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Seller in the State of New York and
shall be deemed to have been made in the State of New York.  THIS AGREEMENT 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 9.10.          Further
Agreements.

 

The Seller, the Servicer and the Subservicer each agree to execute and
deliver to the other such reasonable and appropriate additional documents,
instruments or agreements as may be necessary or appropriate to effectuate the
purposes of this Agreement.

 

50

 

Section 9.11.          Intention
of the Parties.

 

It is the intention of the parties that the Seller is conveying, and
the Servicer is receiving only a contract for servicing the Mortgage
Loans.  Accordingly, the parties hereby
acknowledge that the Trust Fund remains the sole and absolute owner of the
Mortgage Loans (other than the servicing rights) and all rights related
thereto.

 

Section 9.12.          Successors
and Assigns; Assignment of Servicing Agreement.

 

This Agreement shall bind and inure to the benefit of and be
enforceable by the Servicer, the Subservicer, the Seller, the NIMS Insurer and
the Master Servicer and their respective successors and assigns.  This Agreement shall not be assigned, pledged
or hypothecated by the Servicer or the Subservicer to a third party except in
accordance with Sections 7.02 and 7.05 and shall not be assigned, pledged or
hypothecated by the Seller without the prior written consent of the NIMS
Insurer except as to the extent provided in Section 9.13.

 

Section 9.13.          Assignment
by the Seller.

 

The Seller shall assign, its interest under this Agreement to the
Depositor, which in turn shall assign such rights to the Trustee, and the
Trustee then shall succeed to all rights of the Seller under this Agreement.

 

Section 9.14.          Amendment.

 

This Agreement may be amended from time to time by the Servicer, the
Subservicer, the Seller and the Master Servicer, with the prior written consent
of the Trustee and the NIMS Insurer; provided
that the party requesting such amendment shall, at its own expense, provide the
Trustee, the NIMS Insurer, the Master Servicer, the Servicer, the Depositor and
the Seller with an Opinion of Counsel that such amendment will not materially
adversely affect the interest of the Certificateholders in the Mortgage Loans
or the NIM Securities, if any, issued in the NIMS Transaction.  Any such amendment shall be deemed not to
adversely affect in any material respect any the interest of the Certificateholders
in the Mortgage Loans or the NIM Securities issued in any NIMS Transaction, if
the Trustee receives written confirmation from each Rating Agency that such
amendment will not cause such Rating Agency to reduce, qualify or withdraw the
then current rating assigned to the Certificates and the NIM Securities (and
any Opinion of Counsel requested by the Trustee, the NIMS Insurer, the Master
Servicer and the Seller in connection with any such amendment may rely
expressly on such confirmation as the basis therefore).

 

Section 9.15.          Waivers.

 

No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced and is consented to by the
NIMS Insurer.

 

51

 

Section 9.16.          Exhibits.

 

The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.

 

Section 9.17.          Intended
Third Party Beneficiaries.

 

Notwithstanding any provision herein to the contrary, the parties to
this Agreement agree that it is appropriate, in furtherance of the intent of
such parties as set forth herein, that the Trustee and the NIMS Insurer receive
the benefit of the provisions of this Agreement as intended third party
beneficiaries of this Agreement to the extent of such provisions.  The Servicer and the Subservicer shall have
the same obligations to the Trustee and the NIMS Insurer as if they were parties
to this Agreement, and the Trustee and the NIMS Insurer shall have the same
rights and remedies to enforce the provisions of this Agreement as if they were
parties to this Agreement.  The Servicer
and the Subservicer shall only take direction from the Master Servicer (if
direction by the Master Servicer is required under this Agreement) unless
otherwise directed by this Agreement. 
Notwithstanding the foregoing, all rights and obligations of the Trustee
and the Master Servicer hereunder (other than the right to indemnification)
shall terminate upon the termination of the Trust Fund pursuant to the Trust
Agreement and all rights of the NIMS Insurer set forth in this Agreement (other
than the right of indemnification) shall exist only so long as the NIM
Securities issued pursuant to the NIMS Transaction remain outstanding or the
NIMS Insurer is owed amounts in respect of its guarantee of payment on such
NIMS Securities.

 

Section 9.18.          General
Interpretive Principles.

 

For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

 

(a)           the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
gender;

 

(b)           accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;

 

(c)           references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”,
and other subdivisions without reference to a document are to designated
Articles, Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;

 

(d)           a reference to a Subsection without further reference
to a Section is a reference to such Subsection as contained in the
same Section in which the reference appears, and this rule shall also
apply to Paragraphs and other subdivisions;

 

(e)           the words “herein”, “hereof’, “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and

 

52

 

(f)            the term “include” or “including”
shall mean by reason of enumeration and shall be deemed to be followed by the
phrase “without limitation.”

 

Section 9.19.          Reproduction
of Documents.

 

This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process.  The parties agree that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence and
whether or not such reproduction was made by a party in the regular course of
business, and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.

 

53

 

IN WITNESS WHEREOF, the Servicer, the Subservicer, the Seller and the
Master Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the date first above written.

 

	
   

  	
  FIELDSTONE MORTGAGE COMPANY

  
	
   

  	
  (Seller)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [                           ]

  
	
   

  	
  (Subservicer)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   [                           ]

  
	
   

  	
  (Master Servicer)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged by:

  	
   

  
	
   

  	
   

  
	
  [                            ]

  	
   

  
	
    (Trustee)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
									

 

 

EXHIBIT A

 

MORTGAGE LOAN SCHEDULE

 

A-1

 

EXHIBIT B-1

 

CUSTODIAL ACCOUNT LETTER
AGREEMENT

 

                      
    ,           

 

	
  To:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (the “Depository”)

  

 

As Subservicer under the Securitization Servicing Agreement, dated as
of
[                           ],
2005 (the “Agreement”), we hereby authorize and request you to establish an
account as a Custodial Account pursuant to Section 3.03 of the Agreement,
designated as “Fieldstone Mortgage Company in trust for
[                           ],
as Trustee for the Fieldstone Mortgage Investment Trust 2005-[  ].” 
All deposits in the account shall be subject to withdrawal therefrom by
order signed by the Servicer.  This
letter is submitted to you in duplicate. 
Please execute and return one original to us.

 

	
   

  	
  FIELDSTONE MORTGAGE COMPANY

  
	
   

  	
  Servicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
						

 

B-1-1

 

The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number            ,
at the office of the Depository indicated above, and agrees to honor
withdrawals on such account as provided above.

 

 

	
   

  	
   

  
	
   

  	
  Depository

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
						

 

B-1-2

 

EXHIBIT B-2

 

CUSTODIAL ACCOUNT LETTER
AGREEMENT

 

                      
    ,           

 

	
  To:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (the “Depository”)

  

 

As Subservicer under the Securitization Servicing Agreement, dated as
of
[                           ],
2005 (the “Agreement”), we hereby authorize and request you to establish an
account as a Custodial Account pursuant to Section 3.03 of the Agreement,
designated as “[                           ]
in trust for
[                           ],
as Trustee for the Fieldstone Mortgage Investment Trust 2005-[  ].” 
All deposits in the account shall be subject to withdrawal therefrom by
order signed by the Subservicer.  This
letter is submitted to you in duplicate. 
Please execute and return one original to us.

 

 

	
   

  	
  [                           ]

  
	
   

  	
  Subservicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
						

 

B-2-1

 

The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number          ,
at the office of the Depository indicated above, and agrees to honor
withdrawals on such account as provided above.

 

 

	
   

  	
   

  
	
   

  	
  Depository

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Date:

  	
   

  
						

 

B-2-2

 

EXHIBIT C-1

 

ESCROW ACCOUNT LETTER AGREEMENT

 

                      
    ,           

 

	
  To:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (the “Depository”)

  

 

As Servicer under the Securitization Servicing Agreement, dated as of
[                           ],
2005 (the “Agreement”), we hereby authorize and request you to establish an
account, as an Escrow Account pursuant to Section 3.05 of the Agreement,
to be designated as “Fieldstone Mortgage Company in trust for
[                           ],
as Trustee for the Fieldstone Mortgage Investment Trust 2005-[  ].” 
All deposits in the account shall be subject to withdrawal therefrom by
order signed by the Servicer.  This
letter is submitted to you in duplicate. 
Please execute and return one original to us.

 

	
   

  	
  FIELDSTONE MORTGAGE COMPANY

  
	
   

  	
  Servicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
						

 

C-1-1

 

The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number  ,
at the office of the Depository indicated above, and agrees to honor
withdrawals on such account as provided above.

 

 

	
   

  	
   

  
	
   

  	
  Depository

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
						

 

C-1-2

 

EXHIBIT C-2

 

ESCROW ACCOUNT LETTER AGREEMENT

 

                      
    ,           

 

	
  To:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (the “Depository”)

  

 

As Subservicer under the Securitization Servicing Agreement, dated as
of
[                           ],
2005 (the “Agreement”), we hereby authorize and request you to establish an
account, as an Escrow Account pursuant to Section 3.05 of the Agreement,
to be designated as “[                           ]
in trust for
[                           ],
as Trustee for the Fieldstone Mortgage Investment Trust 2005-[  ].” 
All deposits in the account shall be subject to withdrawal therefrom by
order signed by the Subservicer.  This
letter is submitted to you in duplicate. 
Please execute and return one original to us.

 

 

	
   

  	
  [                           ]

  
	
   

  	
  Subservicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
						

 

C-2-1

 

The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number                    ,
at the office of the Depository indicated above, and agrees to honor
withdrawals on such account as provided above.

 

 

	
   

  	
   

  
	
   

  	
  Depository

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
						

 

C-2-2

 

EXHIBIT D-1

 

FORM OF MONTHLY REMITTANCE
ADVICE

 

 

	
  FIELD NAME

  	
   

  	
  DESCRIPTION

  	
   

  	
  FORMAT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INVNUM

  	
   

  	
  INVESTOR LOAN NUMBER

  	
   

  	
  Number no decimals

  	
   

  
	
  SERVNUM

  	
   

  	
  SERVICER LOAN NUMBER, REQUIRED

  	
   

  	
  Number no decimals

  	
   

  
	
  BEGSCHEDBAL

  	
   

  	
  BEGINNING SCHEDULED BALANCE FOR SCHED/SCHED
  BEGINNING TRAIL BALANCE FOR ACTUAL/ACTUAL, REQUIRED

  	
   

  	
  Number two decimals

  	
   

  
	
  SCHEDPRIN

  	
   

  	
  SCHEDULED PRINCIPAL AMOUNT FOR
  SCHEDULED/SCHEDULED ACTUAL PRINCIPAL COLLECTED FOR ACTUAL/ACTUAL, REQUIRED,
  .00 IF NO COLLECTIONS

  	
   

  	
  Number two decimals

  	
   

  
	
  CURT1

  	
   

  	
  CURTAILMENT 1 AMOUNT, .00 IF NOT APPLICABLE

  	
   

  	
  Number two decimals

  	
   

  
	
  CURT1DATE

  	
   

  	
  CURTAILMENT 1 DATE, BLANK IF NOT APPLICABLE

  	
   

  	
  DD-MMM-YY

  	
   

  
	
  CURT1ADJ

  	
   

  	
  CURTAILMENT 1 ADJUSTMENT, .00 IF NOT
  APPLICABLE

  	
   

  	
  Number two decimals

  	
   

  
	
  CURT2

  	
   

  	
  CURTAILMENT 2 AMOUNT, .00 IF NOT APPLICABLE

  	
   

  	
  Number two decimals

  	
   

  
	
  CURT2DATE

  	
   

  	
  CURTAILMENT 2 DATE, BLANK IF NOT APPLICABLE

  	
   

  	
  DD-MMM-YY

  	
   

  
	
  CURT2ADJ

  	
   

  	
  CURTAILMENT 2 ADJUSTMENT, .00 IF NOT
  APPLICABLE

  	
   

  	
  Number two decimals

  	
   

  
	
  LIQPRIN

  	
   

  	
  PAYOFF, LIQUIDATION PRINCIPAL, .00 IF NOT
  APPLICABLE

  	
   

  	
  Number two decimals

  	
   

  
	
  OTHPRIN

  	
   

  	
  OTHER PRINCIPAL, .00 IF NOT APPLICABLE

  	
   

  	
  Number two decimals

  	
   

  
	
  PRINREMIT

  	
   

  	
  TOTAL PRINCIPAL REMITTANCE AMOUNT, .00 IF
  NOT APPLICABLE

  	
   

  	
  Number two decimals

  	
   

  
	
  INTREMIT

  	
   

  	
  NET INTEREST REMIT, INCLUDE PAYOFF
  INTEREST, .00 IF NOT APPLICABLE

  	
   

  	
  Number two decimals

  	
   

  
	
  TOTREMIT

  	
   

  	
  TOTAL REMITTANCE AMOUNT, .00 IF NOT
  APPLICABLE

  	
   

  	
  Number two decimals

  	
   

  
	
  ENDSCHEDBAL

  	
   

  	
  ENDING SCHEDULED BALANCE FOR
  SCHEDULED/SCHEDULED ENDING TRIAL BALANCE FOR ACTUAL/ACTUAL, .00 IF PAIDOFF,
  LIQUIDATED OR FULL CHARGEOFF

  	
   

  	
  Number two decimals

  	
   

  
	
  ENDACTBAL

  	
   

  	
  ENDING TRIAL BALANCE .00 IF PAIDOFF,
  LIQUIDATED OR FULL CHARGEOFF

  	
   

  	
  Number two decimals

  	
   

  
	
  ENDDUEDATE

  	
   

  	
  ENDING ACTUAL DUE DATE, NOT LAST PAID
  INSTALLMENT

  	
   

  	
  DD-MMM-YY

  	
   

  
	
  ACTCODE

  	
   

  	
  60 IF PAIDOFF, BLANK IF NOT APPLICABLE

  	
   

  	
  Number no decimals

  	
   

  
	
  ACTDATE

  	
   

  	
  ACTUAL PAYOFF DATE, BLANK IF NOT APPLICABLE

  	
   

  	
  DD-MMM-YY

  	
   

  
	
  INTRATE

  	
   

  	
  INTEREST RATE, REQUIRED

  	
   

  	
  Number seven decimals Example .0700000 for
  7.00%

  	
   

  
	
  SFRATE

  	
   

  	
  SERVICE FEE RATE, REQUIRED

  	
   

  	
  Number seven decimals Example.0025000 for
  .25%

  	
   

  
	
  PTRATE

  	
   

  	
  PASS THRU RATE, REQUIRED

  	
   

  	
  Number seven decimals Example .0675000 for
  6.75%

  	
   

  
	
  PIPMT

  	
   

  	
  P&I CONSTANT, REQUIRED .00 IF PAIDOFF

  	
   

  	
  Number two decimals

  	
   

  

 

D-1-1

 

EXHIBIT D-2

 

STANDARD LAYOUT FOR MONTHLY
DEFAULTED LOAN REPORT

 

1. Deal Identifier by Loan

2. SBO Loan Number

3. Loan Number

4. Investor Loan Number

5. Street Address

6. City

7. State

8. Zip Code

9. Original Loan Amount

10. Origination Date

11. First Payment Date

12. Current Loan Amount

13. Current Interest Rate

14. Current P&I Payment Amount

15. [Reserved]

16. [Reserved]

17. Next Rate Adjustment Date

18. Next Payment Adjustment Date

19. Loan Term

20. Loan Type

21. [Reserved]

22. Product Type

23. Property Type

24. Ownership Code

25. Actual Due Date

26. Delinquency Status

27. [Reserved]

28. FC Flag

29. Date Loan Reinstated

30. FC Suspended Date

31. Reason Suspended

32. FC Start Date (referral date)

33. Actual Notice of Intent Date

34. Actual First Legal Date

35. [Reserved]

36. Date F/C Sale Scheduled

37. Foreclosure Actual Sale Date

38. Actual Redemption End Date

39. Occupancy Status

40. Occupancy Status Date

41. Actual Eviction Start Date

 

D-2-1

 

42. Actual Eviction Complete Date

43. Loss Mit Workstation Status

44. Loss Mit Flag

45. Loss Mit Type

46. Loss Mit Start Date

47. Loss Mit Approval Date

48. Loss Mit Removal Date

49. REO Flag

50. Actual REO Start Date

51. REO List Date

52. REO List Price

53. Date REO Offer Received

54. Date REO Offer Accepted

55. REO Scheduled Close Date

56. REO Actual Closing Date

57. REO Net Sales proceeds

58. REO Sales Price

59. Paid Off Code

60. Paid in Full Date

61. MI Certificate Number

62. [Reserved]

63. [Reserved]

64. [Reserved]

65. [Reserved]

66. [Reserved]

67. [Reserved]

68. [Reserved]

69. [Reserved]

70. [Reserved)

71. [Reserved]

72. Actual Claim Filed Date

73. Actual Claim Amount Filed

74. Claim Amount Paid

75. Claim Funds Received Date

76. Realized Gain or Loss

77. BK Flag

78. Bankruptcy Chapter

79. Actual Bankruptcy Start Date

80. Actual Payment Plan Start Date

81. Actual Payment Plan End Date

82. Date POC Filed

83. Date Filed Relief/Dismissal

84. Relief/Dismissal Hearing Date

85. Date Relief/Dismissal Granted

86. Post Petition Due Date

87. Prepayment Flag

 

D-2-2

 

88. Prepayment Waived

89. Prepayment Premium Collected

90. Partial Prepayment Amount Collected

91. Prepayment Expiration Date

92. Origination Value Date

93. Origination Value Source

94. original Value Amount

95. FC Valuation Amount

96. FC Valuation Source

97. FC Valuation Date

98. REO Value Source

99. REO Value(As-is)

100. REO Repaired Value

101. REO Value Date

102. Investor/Security Billing Date Sent

 

D-2-3

 

EXHIBIT E

 

FIELDSTONE MORTGAGE INVESTMENT TRUST 2005-[  ] TRUST AGREEMENT

 

E-1

 

EXHIBIT F

 

[                ]
Form of Back-up Certification

 

[Name and address of master servicer]

 

Re:  [name of securitization]

 

[                           ],
as Subservicer hereby certifies to the Master Servicer that:

 

1.  To our knowledge, the
information in the Annual Statement of Compliance, the Annual Independent
Public Accountant’s Servicing Report and all servicing reports, officer’s
certificates and other information relating to the servicing of the Mortgage
Loans submitted to the Master Servicer taken as a whole, does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period covered
by such reports;

 

2.  To our knowledge, the
servicing information required to be provided to the Master Servicer by the
Subservicer under the Servicing Agreement has been provided to the Master
Servicer;

 

3.  Based upon the review
required by the Servicing Agreement, and except as disclosed in the Annual
Statement of Compliance or the Annual Independent Public Accountant’s Servicing
Report, the Subservicer has, as of the last day of the period covered by such
reports fulfilled its obligation under the Servicing Agreement; and

 

4.  The Subservicer has disclosed
to the Master Servicer all significant deficiencies relating to the Subservicer’s
compliance with the minimum servicing standards in accordance with a review
conducted in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar standard as set forth in the Servicing Agreement.

 

Capitalized terms used but not defined herein have the meanings
ascribed to them in the Servicing Agreement, dated as of
[                           ],
2005 (the “Servicing Agreement”), among Fieldstone Mortgage Company, as
servicer and as seller (in such capacities, the “Servicer” and

 

F-1

 

the “Seller”),
[                           ],
as subservicer (the “Subservicer”) and
[                           ],
as master servicer (the “Master Servicer”).

 

	
   

  	
  [                           ],
  as Servicer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  Date:

  

 

F-2

 

EXHIBIT G

 

POWER OF ATTORNEY

 

G-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]